Milford chronicle., 1952-01-11
THOSE WHO FAVOR PURCHASE
OF CURRENT

pearlng in this column, II IS be-
lieved that we should discuss the
Fairbanks Morse Proposal, in the +;
light of statements made in the
Milford Chronicle last week over I
the signature OF the Chairman of
the Power Plant Committee, and
also statements by him and other
proponents of the Proposal at the
Citizens Meeting on January 4,
1852.
First. lei it be clearly understood
that the Proposal plainly states that
no verbal understandings or prom
ises are binding. Therefore, let's eX- /
anime the statements mentioned J
above in contrast to the actual pro- /,
visions of the Proposal and its 4
preparation.
l. In last weeks article the 4
Chairman of the Power Plant Com I
mittee stated that Tunnel and
Tunnell had passed on the legality
of the Proposal. At the Citizens
Meeting, a member of the firm of
Tunnel and Tunnell stated that
their office had not even seen the
Proposal. and had in no way pass
ed an opinion on it.
The first obligation of council or
any committee Of council is to
safeguard the interests of the citi-
zens of Milford by having the city
solicitor pass on the legahty Of any
proposed legal paper. Obviously,
this was not done.
IL. In the article and at the
meeting it was stated that only
savings" would be used to pay for
the proposed plant. and that no
other city revenue would be involv-
ed.
The Proposal very definitely re-
quires that the gross revenues
i. e., the entire amount which each
and all of us pay for current, shall
Nbe deposited into a special ac-
count" from which the payments
> for this plant are 10 be made.
This means that the profit of over
800 900 per year. which has been
available for the betterment of the
D city. will now go into the special
= account, and there is no prOvis-
= ion in the Proposal for the city tC
use any of this fund for any other
d purpose than making the payments
o on the plant When the Fairbanks
g Morse Attorney was questioned al
I the meeting. as to why they insist
@ ed that all the gross receipts from
: the electric franchise must be de-
i posted in this special account
il when he had promised that Onl!
. savings would be used, he stated
4 in substance that this was the pro
# posal upon which Fairbanks-MOrs'
: is willing to bid, and this is th'
g only basis on which they are will
Is ing to bid.
a III. The most important factO
4 in this paying from savings, l
- the obvious Ommission from tn
- Proposal of any clause stating tina
:, Morse does not get pait
" if there are NO savings. In the alb
sence of any such clause. il is rea
sOnable TO believe that any cour
80 will hold that the Proposal is
+; simple time payment contract, an
u that Milford must pay whether o
not there are any savings. Espec
tally so, when it is stipulated tina
all the gross revenues" must g
is into the fund pSving for the plan
e and that electric rates are not [
It be reduced during the life Of th
al contract. II only savings" in Pre-
We ducing current are involved, WI
]. any concern about the rates W
ne charge? Their statement that sue
tn a clause is necessary because "
ng might charge rates below our pre-
* ent costs is just plain ridiculou
en- When we start reducing rates ii
a first thing affected is the prof
from our distribution system. On
lp- after our average rate has been r
nd. duced below IL cents per XIV
Ic- will savings" be affected.
Ter ". Quoting from the article
We. the Chairman of the Plant Coz
nd mfttee there are NO bonds to
,od issued by the city and NO liei
against city property other thi
-ho the actual equipment itself" II
or PROPOSAL states that the paymen
IS. for the plant equipment must
guaranteed by revenue certihcat
or notes of the municipality. lie
forget revenue certificates. II
term is misleading. but anyone u
derstands that notes of the Mul
cipality" are just as binding
. bOTdS of the Municipality. In ia
10 make sure that the real ests
of MilfOrd-Our property and Q
elp homes-must stand good for Il
Ad- debt. the Proposal definitely pl
few vides for a Judgment being tak'
inc What would the judgment be ts
en- against if not our properi
nat Certainly it cannot be enter
Ugh against the new equipment becaI
the Proposal provides that title
,ss it is in the name of the Compa
until fully paid for. They cam
Oh enter a judgment against their o
Tres property.
t is V. According to the Proposal
,ter we are able to pay the notes
scheduled the interest on $3.50!
DIS will be over S156.OO0 If the d
goes beyond the scheduled time,
course, the amount will be lars
fact In the method of figuring costs
- generated power this interest is
u0i nOred. nor is it mentioned as &C
ad- ing from savings" or met rev
lout ue'. If it is not included in I
ion place or the other it must be p
-. out of normal city revenue if
'le savings" are insufficient to
both interest and principal.
. to The way the Proposal is I
- written, we pay the interest e
u though there are no savings