The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1914-04-17

Ffom Mohuays D1hy.
The report Of the rate commission
was read before the council this
morning, accepted and placed on file
The members will make thorough
study OF u before proceeding fur
Their In the matter.
Following out prediction made
by The Free Press several days ago,
that they would do SO, two
members Of the rate commits
sion have advised the city council to
frame the ordinance that will call
upon the Consumers Power COM
pany to furnish gas to patrons In
Mankato at the rate OF s1.10 per
thousand cubic feet. These two gen.
tlemen are Jean A. Flittie and w. J.,
Morehart. George w. Scherer, the
third member OF the commission, has
advised that the prices be fixed at
81 per thousand.
The report OF the commission was
filed with the mayor and council
this morning and is as follows:
ITO the Honorable A. G. Meyer,
Mayor, and Commissioners of the
City OF Mankato, Minnesota. Gentle
men: The undersigned appointed by
your honorable body to investigate
and determine questions with ref
erence TO rates to be charged by
any corporation or person exercis-
la, eat atf for
sevices rendered by such corpora
ton or person to the city or 10 the
public and TO recommend what are
reasonable rates TO be charged by
such corporation or person for the
services so rendered 10 the city or the
public. beg to report that we have
made an extended investigation into
the operation of the gas plant of
the Consumers Power compay To-
Gated In said city with reference to
its present value, its yearly produc-
ton and sale Of gas, the cost Of its
operation and its earnings for the
years 1910, 1911, 1912 and 1918.
Valuation Of the Plant.
AT the outset of this investigation
the city employed Mr.. Earle ID.
Jackson, a consulting engineer, who
prepared a detailed inventory and
made an appraisal OF the gas plant
ar the Consumers Power company I'm
said city. This appraisal and inven-
tory is nm Evidence as exhibits A,
'B', c., and u. The appraisal
was made as OF date November /,
1913. Mr.. jackson fixes the present
value OF the gas plant at s179,
910.g4.
Mr.. E. c. Braun, appraisal engi.
neer, on behalf of the company also
made and submitted a detailed in.
ventory and made en- appraisal OF
said gas plant as shown by Con.
sumers' Power company exhibit a."
And he fixes the present value OF
the plant at $S20.417 40.
Experts Do Differ.
The two experts therefore differ
to the extent Of s14O,506 &c in their
respective valuations OF the gas
plant of the Consumers Power com.
pany in the City of Mankato.
This vast difference I'm the value
OF the plant as shown by the two
appraisals arises mainly from the
various percentages added by Mr..
Braun to his net cost of the plant
and not to be found in Mr.. Jackson's
appraisal Which percentages are
these:
Engineering and super
vision ~ per cent :. S13,SS1. sc
Insurance 1 per cent :. 1888. IS
Legal organization 5 per
cent NEUTRALITY-SUSPICIOUS.. 10,0f7 SO
Interest during construc-
ton 6 per cent 49,. 1850 80
Brokerage Is per cent =. 4O.761 .Si
The above percentages are In ad.
dition TO 10 per cent for omissions
and contingencies and Is per cent
for contractors profits. II will thus
be seen that Mr.. Braun has added
59k per cent TO his net cost of the
plant in order to arrive at its pres
ent value.
Mr.. Jackson, on the other hand
has added only 22h per cent 10 his
net cost to fix the present value oil
the plant.
There Is also bulging difference
between the two engineers in their
estimates as TO the cost OF laying
wrought and cast iron mains, and
this difference we resolve I'm Mr.
Jackson's favor.
Extra Percentages unwarrsnted.
We think that the extra percent
ages added by Mr.. Braun to his ne,
a.. cost OF the plant are unwarranted
and not proper items entering into
the present value of the plant, IN
view OF the other percentages added
by him. Such other percentage.
should suffice for all PURPOSES.
"Mr. Braun has working capital IL
the sum OF s12.Os1 AZ and supplies
in the sum OF s11.371 IS; Mr.. Jack
son has supplies in the sum of s11.
81. 6s and for working capital hs
allows $4,000. When we considel
that this company collects its pa,
from its customers every thirty days
II would seem that II should need I
very small working capital. O
course. In a business OF this kind