The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-04-30

Kern's Understanding Is
Probe viii Precede
Bond Sale.
HELD SOUND PRACTICE
$4,000 Bond Issue Bids
Due to Be Opened
Saturday.
BY VINCENT LYONS
Times Financial Editor

An engineering appraisal of the
property of the Citizens Gas Co. as
we'll as an audit of the company's
book undoubtedly will be made before
the 100000 bond issue is award
ed to any group, Mayor John w.
Kern told The indianapolis Times
this afternoon.
While the appraisal and audit
have not yet been authorized by the
board of directors of the City Util-
ity District, Mayor Kern declared
that it is his understanding that
both these important steps will pre-
cede the actual awarding of the
bonds. bids on which will be received
on Saturday.
Il feel that good business prac-
tice demands that we take such &C
ton before assuming the debt" the
Mayor said.
The right to make the engineer
ing appraisal and audit at any time
was extended to the city in 1905
when the original contract between
the Citizens Gas Co. and the city
was drafted.
Fails TO State Intentions
Two other moves which should be
preliminary to the city's definite
commitment, but on which nothing
has been done are:
1. Procuring of bid on natural
gas.
2. Undertaking Of thorough sur
vey of the possible markets in the
event that natural gas or mixed gas
is utilized after the impending deal
is consummated.
Failure of the city authorities to
take into consideration these steps is
another indication of the lack of
planning which has marked the en-
tire history of the citys interest in
the Citizens Gas Co. A series of
articles in The Indianapolis Times
called attention to many points
which could stand Qualification and
Interpretation.
The Utility District, which is en-
trusted with complete control of the
manner and method of acquiring the
Citizens Gas Co., has yet to offer an
announcement of what it intends to
do after the property is purchased.
Assertions that the contemplated
transaction will mean increased gas
rates to consumers have gone I'M
challenged.
On April S, when the board Of di-
rectors of the Utility District made
public its resolution authorizing the
sale of bonds with which to take
over the Citizens Gas Co, it was in
timated, but not stated officially,
that the city would utilize a mixed
gas.
No Definite Move Made
Last Friday Mayor Kern met with
trustees of the Utility District. At
the conclusion of the meeting it was
stated that the city may bring nat
ural gas here. 1t was not definitely
decided whether the natural gas
would be used alone or whether it
would be mixed with the present
artificial gas.
At this same meeting the conferees
discussed the possibility of asking
for compensation bids on the nat
ural gas to be piped to the city gates.
However. the meeting adjourned
without the group making any def
mite plans for the procurement of
such bids.
Without the appearance of COM
penSating bid on natural gas before
hand, there is no way whatsoever of
determining what benefits might &C
crue to city gas consumers in the
event that natural gas is brought in.
1t is not too late even now to re-
ceive a bid on natural gas. together
with an exploratory survey of the
prospective trend of consumption
over the next few years. The entire
Set-up was prepared about two years
ago and with minor revisions would
be apropos to the present situation.
Rate Raise Imminent
Deletions and reviSions we're made
in the original contract providing
for the sale of bonds by the Utility
District. These changes oStensibly
were made at the request of persons
who were prepared to submit bids on
the issue. In effect, persons who
take the proposed bonds are given a
guarantee that the earnings from
the gas property will be sufficient to
take care of principal and interest.
What this means is that in the
event that the present gas rate is in
sufficient to meet interest on the
contemplated issue. the city will Jack
up its gas rate in order TO make up
this deficiency.
Concessions have been made to
the potential owners of the bonds.
What is needed now is some frank
ness and public pronouncement on
the status Of the gas consumer under
the proposed 100000 transaction
with the Citizens Gas Co.