Milford chronicle., 1929-11-22
OFFERS PRACTICAL
ARGUMENTS AGAINST
LIGHT PLANT SALE
To Editor of The Milford Chronicle,
Milford, Delaware.

rial of last week in regard to the sale
of the Milford Electric Light and
Water Plant, with much interest. 1t
occurs to me, however, that there
are several points in regard to the
proposed sale which might we'll be
emphasized.
Q. That when the people of Mil
ford vote Eyes" or mo" at this cleo
tion they are having their last say
in the matter. 1t is their final word.
If they vote "Yes" they will have
nothing further to say in regard to
the price or terms of sale of this
Public Utility. They are authorizing
the sale of the plant at price that
may be 100000 or $450,000, so far
as they are concerned; they are au-
thorizing the sale of the plant on
terms of current or water rates that
may or may not meet with their la
ter approval; they are authorizing
the sale of franchise of whose val
ue they know nothing; and they are
doing this blindfolded as to the act
ual facts and values.
1 might recall that last year when
a representative of one of the Public
Utility Companies appeared before
Council with an offer to buy, he was
asked this question: "On what price
for current or water is this offer
based?" His answer was, that it was
based upon the rates that the people
of the town were then paying for
light and water. In other words it
was based upon last years rate for
current which included the obnox-
ious meter charge. And naturally,
if the offer was a fair one, at any
where near the real value of the
plant, if his company was compelled
to make less charge for current to
correspond with our present rates,
his offer would have to be revised
downward. 1t should be clear, there
fore, that these so-called bids are
merely tentative offers and represent
what the Utility Companies would be
willing to pay provided they were
allowed to charge certain rates and |
do certain things. In common par
lance, every such offer has string |
to it. And after this election these |
strings will be out of the reach of the |
people of this town.
(2). 1t is proposed to take the |
money received for the plant, what
ever this amount may be, and (a) |
pay all the outstanding indebtedness
Of the town and (b) place the bal
ance in a Trust Fund and use the
interest therefrom for the improve
ment of the streets. This sounds
very we'll but means simply this:
Last year, 1 am informed, the plant
earned 6 per cent on over 100000.
They propose to take this money, or
it's equivalent-the money received
from the sale of the plant, and pay
off outstanding bonds on which the
town is paying from 4 3-4 to 5 per
cent. That is, they are proposing to
use 6 per cent money to pay off 3-4
or 5 per cent money. Is this good
municipal business? Assuming that
a similar sum is offered for the
plant.
Further, they propose to place the
balance of this 6 per cent money in
a Trust Fund and invest it in un-
named securities that should pay at
the most a per cent interest re-
turn. am assuming that the Trust
Fund Commissioners would invest
the money only in sound securities
bearing a moderate rate of interest,
although so far as the bill authoriZ-
ing their appointment is concerned,
they could buy "Hot Air" stock with
it, if they wanted to, and assume no
responsibility therefor = provided
they bought it in good faith. 1 quote
the following from Vol. &c Chap. 174
page 533, Laws of Delaware:
"In selecting investments the
Commissioners shall make the safety
of the principal their first and pri-
mary object, but they shall not be re-
stricted to the kind of character OF
investments prescribed by Statute
for the investment of Trust Funds,
nor shall they be personally liable
except for fraud" Why should they
not be restricted? What sort of Sc
curities would they contemplate buy
ing? The heavy types are mine.
But whatever the interest return
of this investment may be, they pro-
pose to use it for the purpose of i'm
proving the streets of the Town of
Milford, when it is possible for the
Town to secure money for perma-
nent improvement purposes at not
more than ga per cent, and prob
ably less.
80. Finally, the people are asked
to sell something of whose value
they know nothing and to authorize
seven men who know as little about
it as they do, to attend to the details,
and fix the price. Personally, 1 have
no idea as to what the Plant may be
worth except what can gather from
It's earnings or from what is offered
for it. And as it is possible for
very valuable machine to be run
without showing much profit but
without detracting from its actual
and potential value, so is it possible
that our Light and Water Plant and
franchise are worth far more than
any one appears willing to pay for it. h
In conclusion, as a citizen of Mil h
ord and speaking for myself, 1 have X
his to say in regard to the sale of h
he plant: Before l am willing to II
yote "Yes" on this question, would II
want: First-The Plant and fran \
,hise to be appraised by some re-
iponsible Appraisal Company so that
may have some idea of the value
If what l am selling. Second-I
would want a definite contract drawn h
I'D containing a schedule Of rates for
light and water for the future az well
is the present Third would
want bids based upon such q con
ract so that | would know that /
vas not selling in the present some
hing for which | would have ~ Day h
learly in the future. Tx
1 am, Id
Yours truly, TX
II. B. THAW. Tx
- ID