The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-09-14
BAV|S BREAKS.
WITH ". BOND.
ON LIGHT FUND.
Board of Works President
and City Attorney Split
Over Sinking Fund of Sur
plus Earnings.

Despite the statement made Satur-
lay by City Attorney Bond that 1t
would be mistake to place all the
surplus earnings of the city light plant
in the light plant sinking fund for
the prompt accumulation of an
amount sufficient to retire the plants
bonded Indebtedness, $4,000, Presi-
dent Bavis of the board of public
works today came out in advocacy Of
such proceedings.
Mr.. Bavis says that by January l,
1916, there could be 100000 in the
plant sinking fund, and that it would
then be unnecessary to add any more
10 it, because at 3h per cent interest
this fund when the bonds fall due
in 1927. eleven years later, would to-
tai the necessary amount. There is
how $4,000 in the sinking fund. Be-
ginning January, 1915, Bavis would
place the plant surplus in the city's
general fund.
II am not surprised that Mr. Bond
has taken such view of this ques-
tion," said Mr. Bavis today. THE
board has great respect for Mr.. Bonds
views. and his keen sense of analysis
when it comes to defining law, but I'M
fortunately this idea in regard to pro-
viding the necessary sinking fund as
promptly as possible to take care of
the light plant bonds originated with
the board of public works, and Mr..
Bond has demonstrated heretofore his
unalterable belief that nothing good
can come out of Nazareth
"Mr. Bond believes whatever sur
plus might be obtained from the plant
operation should be in the form of re-
duced rates for it's patrons. He seems
to forget that only such reductions
are admissible as will permit the
Light, Heat and Power company to
make reasonable profit on it's in
vestment:. l take the position that the
company is entitled to a fair and rea-
sonable profit on a fair and reason
able valuation.
1--WE have at the present time $780,
1000 in the sinking fund of the light
plant, and by depositing $4,000 ad-
ditional from the surplus between this
and January l, 1916, this amount will
accumulate at 3h per cent compound
interest to $145,9S3.O5 in the eleven
years of the funds existence, or til
1927, when the bonds fall due BY their
arrangement the sinking fund will earn
toward the payment of its own debt,
$45,9S3.05; by depositing 1920 a
year as we are now doing, we will
deposit $87,120 or $17,120 more than
wauld be deposited if the $4,000 was
edded to the present sinking fund.
THE $4,000 would represent one
and one-half years surplus and can be
provided by January, 1916. additional
to the new unit required next year,
which would give IL full years of inter-
est earning period.
Section q. Of Public Service Com
mission law provides for any public
utility entering into a reasonable ar
fangement with it's customers or con-
eumers for the division or distribution
OF its surplus profits fail to see why
the accumulation Of profits for pur-
pose that will avoid a bond issue and
the consequent increased tax rate will
not be equally as beneficial to the con-
sumers as a reduced charge for it's
current for lighting and power, even if
such reduction was permissible. OF
one thing l am sure, its beneficent eff
feet would be extended to the entire
city. My recommendation would be to
begin making preparations, under
such an arrangement to enable the
city to carry out plan of sewage dis
pOSal which in years it would be in
a position to do without adding one
cent to taxes and without the issue of
q bond
when that time comes, as come it
must. $250.000 will have to be provid-
ed; What better plan can be suggested
to reward the people for their loyalty
to the light plant. than by having it
provide for this extraordinary emer-
gency?
I'VE stand number two in the list
Of lowest charges for electric current,
Anderson being the only city in the
state that gives lower rate.
anderson enjoys monopoly of
utilities, both electric and water, there
fore is not compelled to provide such
a schedule as will admit of competit-
or making a profit, as result, her
schedule is lower and she has the
phenomenal distinction of having a 65
cent on the 500 valuation tax rate"