Omaha daily bee., 1920-02-19
draw PETITION
FOR GAS PLANT
REFERENDUM
Mayor Believes Rejection of
Appraisal Will Not Pass,
But Anticipates
Emergency.

hdlo olilltli Ids directed lily
Corporation Counsel Lambert to
prepare referendum petitions to
force vote OF the people on the
question of rejecting the proposal
to purchase the Omaha gas plant at
$4,500000.
This is the mayors answer to the
action of four city commissioners in
declaring for rejection.
81 am convinced that there will
not be four votes in the city council
in support of the ordinance to re-
ject the appraisal OF the court of
condemnation in connection with
the purchase Of the gas plant"
Mayor Smith stated yesterday.
Il have, however, directed Cor
poration Counsel Lambert TO pre-
pare referendum petitions which
will be circulated If a ma'osity of
the council should vote to reject,
and | am convinced that the ordi-
nance to reject will be overwhelm-
ingly rejected if it should be neces-
sary to submit it to referendum
vote"
The mayor insists that it is
clean-cut issue of whether the city
shall approve or reject the appraisal
price OF $4,500,000; that the city
council is without authority,to make
any bargain with the gas company,
as the opponents of the mayors
plan have hthted might be possible.
City Voted to Buy.
In his statement yesterday the
mayor said
The people, by vote OF 1894
to 1886. declared in favor of the
purchase of the gas plant. The city
employed thoroughly competent ex-
perts to appraise the plant and the
gas company had competent men on
their side, the court OF condemna-
ton. composed of Judges Day,
Good and Allen, men in whom all
Of us have full confidence, heard
the testimony and fixed the valua-
ton at $4,500,000 | accept their
finding as being the reasonable
value of the property.
IF we refuse to buy, the gas COM
pany, having no franchise, cannot
be required to pay any royalty, as
it did when franchise existed. The
gas company undoubtedly will try
TO increase the rate OF gas if the city
does not purchase If the city then
tries to regulate the price OF gas.
we will be granting them a new
franchise"
Cites Denver Case.
In that connection, the mayor
showed an opinion of the supreme
court of the United States in the
Denver water case, this finding be-
ing that when the Denver city coun-
Gil sought to regulate the water
rates at a time when the company
did not have a franchise, that regu-
lation was construed as granting a
franchise of indefinite duration.
IF we undertake TO regulate the
price of gas by ordinance" the
mayor continued, ''it will be equiva-
lent to granting the gas company
a franchise of indefinite duration. |
am opposed to granting this COM
pany a new franchise and believe
we should either purchase the gas
plant now, or forever cease talking
about municipal ownership OF this
plant"
The mayors opponents IN the
council have stated that they hope
to drive bargain" with the gas
to an amount approx
mately $500,000 less than the ap-
praisal. To that contention the
mayor replied:
Cannot Buy Outright.
There is no authority given to
the city council to buy any public
utility by negotiations; the only way
fixed by statute for ascertaining the
value of these public utilities is
through a court of condemnation.
Any bonds we might seek to issue
based on bargain and sale between
he council and tie gas company
would be illegal. The legislature
1as never vested the city council
With the power to agree with a pub
iC utility OF its value, but the law
las committed that function to some
outside agency"
The mayor explained that the leg
stature believed that to grant this
to any city council would
cave "too much room for jobbery."
lie also believed that it is probable
hat the court of condemnation may
)e required to reconvene to. deter
nine the valuation of the gas COM
,aay's extensions since May, 1918,
he time of the appraisal, and also
o fix the value of materials the
may have on hand at the
ime of actual purchase. -