The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1915-09-07
No Action Of Utilizing City
Plant Earnings for City
General Fund Will Be Ia
ken.
COURT LARGER DEBT
Plan of Purchasing Profit
less L. FL. & p. Plant With
City Plant Funds is Still
Favored.

Although It is positively known that
the Indiana Public Utilities Commits.
sion when 1t rules upon the petition OF
the city Of Richmond for reduction
in electric light rates for Richmond
will require that a depreciation fund
be provided for the municipal plant,
that II be required to contribute a part
OF the salaries OF the mayor, city at.
torney. board members and controller
for the work they do in the interests
of the plant. and that charge for tax.
es against the plant be made annually
although the plant is not required to
pay any taxes, no action has yet been
taken by the administration to comply
with such anticipated rulings.
Before the city can take advantage
OF an act passed by the legislature last
winter authorizing, under certain con.
ditions. the transfer of earnings of mu.
nicipal plants to the general municipal
fund It Is required that a depreciation
fund be established
What Law Says.
It Is further provided in this law,
sponsored by Richmond city officials
and interested citizens, that the earn.
ings Of municipal plant cannot be
utilized for general city purposes until
there Is provided sinking fund con-
tanning enough monies which at three
percent compound interest, will pro-
vide for the retirement Of all bonds
outstanding against the plant at the
date "a their maturity.
Up to the present time officers Of
the administration have not even COM
puted what amount would have to be
paid ilto the sinking fund OF the plant
during the next year to insure sum
sufficient to provide for all bonded in.
debtedness when the city plant bonds
mature, twelve years hence.
5,9a4 In Fund.
At the present time there Is In the
plant sinking fund. in cash and nego-
table improvement bonds, $35,994. In
the general fund Of the plant at this
time there Is $60,O00. BY the end of
the year there will be at least $4,000
It Is said that II $4,000 Of the esti-
mated $4,000 plant earnings this year
was transferred to the plant sinking
fund this amount, in addition to the
sum now in the latter fund, would be
sufficient to provide for the retirement
of the $4,000 plant bonds when they
mature in 1927. And from the date of
making this large payment into the
sinking fund no other plant monies
during the ensuing twelve years would
have to be utilized to provide for the
payment OF bonded Indebtedness.
Estimating that there would be $780,
900 remaining In the general fund at
the close Of this year after $4,000 Of
the earnings had been paid into the
ct Id I hor ho raSS{h1c,
to establish depreciation fund out of
the balance left in the general fund
and have a small amount available to
be paid into the general fund Of the
city.
How to Reduce Taxes.
It is also pointed out that in the
event final action was taken this year
in providing for the bonded indebted
ness Of the city plant the bulk of the
plants earnings in 1916 could be paid
into the municipal general fund 1917.
opening a way for a reduction in city
taxes.
The city OF Richmond. all public Of
ficials admit is confronted with Sc
rious financial difficulty. It's normal
operating expenses have outgrown i+s
income An increase in the tax rate
would, OF course, provide a solution Of
this question but Mayor Robbins and
the councilmen flatly refuse to take
advantage of this alternative.
The law permitting the transfer Of
municipal plant earnings into the gen.
eral municipal fund Of city would. in
the case Of the city of Richmond. pro-
vide a most satisfactory method OF Sc
curing a revenue sufficient to make
it unnecessary to pare to the bone the
r,,;o So o$<
partment. practice which has had to
he followed our for several years there
by preventing many necessary public
improvements.
Pile Up Debt.
This logical plan to relieve the city
OF it's financial embarrassment is not
to be adopted by the Robbins admins
tration. however. The policy of piling
more debt upon the city is to be car
ried out by the administration if the
state public service commission au-
thorizes the city to purchase the elec-
trio light plant of the Light. Heat &
Power company. In such an event it is
Nae administrations plan to apply all
tn surplus earnings Of the city plant
to the purchase of the competing
plant
The administration believes it bet
ter plan to purchase. at an expense
probably in excess Of 100000, a com.
retitor that the city plant is steadily
driving out Of the local field and which
has been operated at heavy loss for
several years. in preference to utll1z-
ing municipal plant earnings to give
the city government an adequate in
come and to relieve the citizens Of a
part OF the tax burden imposed upon
them for the operation Of the city gov.
ernmept