The Butler County press. [volume], October 31, 1924, Image 3

About The Butler County press. [volume] (Hamilton, Ohio) 1900-1946

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(By Referendum
Petition)
Ordinance No. 2257,
passed on the 18th day
of June, A. D. 1924,
by the City Council of
(he City of Hamilton,
Butler County, Ohio.
Authorizing the sale
of certain personal
property and fixtures
of the Hamilton Munic
ipal Electric Light
Plant, on condition that]
the purchaser continue
furnishing' of electric
current for the period,'
the conditions and
fit the rates ^herein
specified.
The above is ^facsimile of a bal
lot that will be handed to the voters
of the City of Hamilton on November
4, for the purpose of determining the
consensus of opinion of the stock
holders of the City Electric light
Plant as to whether or not the best
interests of the city will be served
in selling the electric light plant or
whether the city shall incur an addi
tional indebtedness of approximately
a million dollars in rebuilding and
modernizing its present plant.
The primary question that comes
naturally to the mind of every citi
zen is first: What benefit will it t»2
to the ctiizens of Hamilton to go in
debt to the extent of a million dol
lars in order to furnish electricity to
the inhabitants of the city'.'
Q.—If the citizens assume the ob
ligation will it enable the inhabitants
of Hamilton to purchase electricity
at a cheaper price than they can se
cure electric current from a private
ly-owned corporation?
A.—The answer to this is found in
a guarantee offer that the city now
has from The Union Gas and Electric
Company of Cincinnati,'wherein that
company agrees to sell electricity to
the citizens of Hamilton for the next
twenty-five years at exactly the same
prices that the City of Hamilton is
now charging its customers, with the
further guarantee that if at any
time during that period a cheaper
price is given to any other customers
in any other city that The Union Gas
and Electric Company serves the
same reduction shall be made to the
users of electricity in the City of
Hamilton.
Q.—What guarantee has the city
of Hamilton that this proposition will
be carried out?
A.—In the first place, the proposal
is in the form of a franchise con
tract. and if it is not carried cut, the
forfeiture would be a loss of the
franchise to do business in the city.
Furthermore, a good and sufficient
bond of $150,000 for the faithful per
formance of this contract is provided
which sum would be forfeited in
addition to the loss of franchise.
Q.—Can the Union Gas and Elec
tric Company at any time during the
period of the contract (25 years) ap
peal to the public utilities commis
sion of the State of Ohio or the
courts for an increase in rates on
the ground that the prices charged
are confiscatory?
A.—No, the Attorney General of
the State of Ohio and the Supreme
Court of the State of Ohio has held
that no such thing is possible be
cause it is a contract, and the laws
of the state hold the contract to be
inviolable, so that there is no reason
able doubt but that the City of Ham
ilton will be secure for the life of
this franchise contract in purchasing
electricity at the present rates, and
if any lower i*ates are granted any
where else where the Union Gas and
Electric Company are selling electric
current that same reduction is guar
anteed to the citizens of Hamilton,
but, in no case at no time can they be
any higher than the present rates.
Q.—Can the City of Hamilton if it
goes into debt a million dollars, make
any lower rates for electric current
than is now being charged?
A.—No, it is very questionable if
the City can continue to sell electric
current at the present rates. For the
year 1925, the sinking fund require
ments for the payment of electric
light bonds and interest is $113,
857.15. The utmost that it is possi
ble to take out of the electric light
receipts for that year is $88,000,
leaving a deficit of $25,857.15 to be
made up by the taxpayers in order to
pay electric light bonds and interest
fulling due. A ballot will be handed
you at the November election, asking
your approval of an additional tax
itvy of two mills in order to enable
the City to have sufficient funds to
pay the operating expenses for Po
$ce, Fire and Health Protection since
the sinking fund requirements take
nearly all of the money that comes
into the city for operating expenses.
This money has to be used to pay
these sinking fund charges because
the present rates charged consumers
do not yield a sufficient return to en
able the sinking fund charges to be
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paid out of the surplus arising out of
*he operation of tn? electric light
plant. An additional tax is asked at
this time instead of an increase
the electric light rates, but it is only
another way of paying higher rates
for your electric light. The only dfi
ference is that you pay it into the
vindow at the County Treasurer's
Office twice a year instead of month
ly at the City Hall, but it all comes
out of the same pocket.
Q.—Will the Sinking Fund require
ments increase or decrease?
A.—Ttyi sinking fund requirements
n bonds outstanding of the electric
light plant at the present time are
reported by the sinking fund trustees
to be as follows:
For the year 1925 $113,857.15
For the year 1826 160,672.50
For the year 1927 104,407.50
For the year 1928 105,712.50
For the year 1929 77,917.50
For the year 1930 110,622.50
Each additional issue of bonds will
increase the amount of the sinking
fund requirements, and the citizens
of Hamilton will have to pay addi
tional taxes to make up the dificiency
between the amount turned over
from the electric light receipts and
the sinking fund requirements, either
by an increase in electric light rates
charged to the inhabitants of the
city or by means of an additioral
tav levy. The money has to be pre.
vided by the inhabitants of the city.
Q.—Can the new electric light plant
be built for the $605,000 which the
city now has left out of its issue of
$650,000 of bonds for that purpose
A.—The City of Hamilton has had
Froelich and Emery, nationally
known experts in Electrical Engin
eering in its employ who have care
fully surveyed the city electric light
plant and they presented detailed es
timates showing that it will require
one million dollars to erect a plant
with 6000 K. W. capacity and that
size plant will not supply all the
electric energy that is being used
today in the City of Hamilton. We
have several manufacturing plants
buying from 1000 to 2000 K. W.
daily. It would require a plant of
12,000 to 15,000 K. W. to supply all
the electric energy purchased in
Hamilton today. The estimated cost
of a million dollars has been checked
and concurred in by another well
known electrical engineer, J. D.
Lyons. Inasmuch as Hamilton has al
most reached the limit of bonded in
debtedness it is allowed to incur un
der the laws, how is the city to pro
vide the huge capital necessary to
manufacture the electric energy, de
r*?nd0d tcdr.y, saying nothing of the
future demands that are bound to
come from a utility that is growing
every day in service.
Q.—What is the condition of the
present City Electric Light Plant?
A.—The present plant is worn out
and inadequate to meet the present
needs of the City due to the fact that
the present units were installed in
1C07 and are of the small engine
driven type. The boiler plant oper
ates at low pressure saturated steam.
These conditions make this equip
ment obsolete in comparison with
present day central station practice.
Present day central station practice
employs the use of high pressure
super-heated steam in turbines tjot
drive the generators.
Q.—Does the present plant furnish
all of the present requirements of the
distribution system?
A.—The present plant does not
furnish the requirements of the dis
tribution system. In the year 1923
it was necessary to purchase about
2,000,000 K. W. Hrs. in addition to
what was generated.
Q.—How can the electric light
problem be solved to meet the present
requirements
A.—This problem can be solved
in three ways: (1) By building a new,
modern, up-to-date plant (2) Pur
chasing electrical energy wholesale
for resale distribution, or (3) Selling
the,present electric distribution sys
tem.
Q.—Is the present distribution sys
tem in good condition and does it
have the capacity that is required?
A.—The distribution system is in
poor condition, due to the fact that
the system needs new main arteries.
The downtown district and certain
parts of the outlying districts are in
poor condition with very much under
size wires.
Q.—What is the estimate of the cost
of rebuilding the main arteries of the
distribution system?
A.—Engineers have estimated that
this would cost about $105,000 and
$50,000 a year for several years to
come, must be re-invested in the
property out of the revenues to take
care of deferred maintenance which
exists and to extend the lines into
nen territory.
Q.—Should the City of Hamilton
purchase current in wholesale quan
tities for resale and distribution?
A.—It shouud not, because the cost
of purchased current would make the
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operating expenses higher than any
othe rplan of solving this nroblem. If
the City of Hamilton purchased cur
rent, they undoubtedly would have to
purchase it from the Union Gas &
Electric Co., of Cincinnati.
Q.—Has the City of Hamilton re
ceived any bids for the Electric Dis
tribution System?
A.—The Union Gas and Electric
Company has made a bid of $500,000
plus improvements since December,
1923. The engineers have estimated
that the present sale price, including
additions and betterments and mater
ials and supplies on hand will be ap
proximately $565,00.
Q.—Is there any money on hand in
the Electric Light Fund which would
be turned over to the Sinking Fund
Trustees in case the distribution was
sold?
A.—There is approximately $600,
000 which would be turned over to
the Sinking Fund Trustees, add the
$565,000 received from the sale would
make a total of $1,165,000 available
for the retirement of the bonded in
debtedness.
Q.—What will the City of Hamil
ton be required to pay annually for
street lighting
A.—Street lighting will cost the
City of Hamilton about $57,000 per
year, based on the present number
of lamps in service.
Q.—-Would the people of Hamilton
get the Street Lighting Service free
in case the new plant was built or
current was purchased wholesale?
A.—No. If the new plant is built,
it would be necessary for the city to
pay to the electric light department
the cost of the street lighting. This
cost of street lighting must be
raised by taxation.
Q.—If the Union Gas & Electric
Company can operate an electric
business in Hamilton properly, why
can't the city?
A.—Because the electric generat
ing business today is a highly spe
cialized and technical business. Men
in this business usually devote a life
time to it and build up an organiza
tion thoroughly trained in all its
branches. The busines salso requires
huge investments, and operatio non a
large scale to make it profitable.
With changing political administra
tions it is practically impossible to
operate such a business properly and
the history of municipal plants gen
erally has been that they eventually
hit the stone wall we are now up
against in Hamilton.
Q.—Is a Public Utility Corporation
an asset to a community?
A.—A live, wide awake, public
utility corporation is unquestionably
an asset to a municipality. Good ser
vice and low rates for electric ser
vice are the largest assets to a com
munity outside of a good transporta
tion.
Q.—What is the outstanding bond
issue of the Electric Light Plant to
day?
A.—The total amount of Bonds
outstanding as of August 1, 1924, on
account of the electric light plant is
$991,500. These bonds will require
interest charges in the sum of $462.
430, to be paid until they mature,
making a grand total of $1,453,930.00
which the. city will have to pay in
retiring the present bonded indebted
ness of the City Electric Light Plant.
These bonds will all be wiped out
and this load will be lifted off of the
City of Hamilton if the Electric Light
Plant is sold under the proposed plan
of City Council.
Q.—How will the sale of the Elec
tric Light Plant help the city out of
its present financial difficulty?
A.—The City of Hamilton is suf
ferring from a too heavy burden of
debt, and the interest charges and
bond payments are taking all the rev
enue that comes to the City Treasury.
The taxes levied for Municipal Pur
poses yielded in 1923, $494,611.49. It
took $400,000 of this money to pay
bonds and interest, and the city had
not enough money left to maintain
the police or fire departments, no
funds to pay cost of garbage collec
tion, and hence the occupational tax
to raise more money and now the
demand of Council for an additional
tax levy of two mills. The Sinking
Fund Requh-ements on present out
standing bonds of the City for the
next seven years are as follows:
1924 $401) ,3 49.37
1925 401,102.72
1926 517,039.07
1927 399,191.92
1928 385,113.68
1929 274959.83
1930 370,422.27
This totals $2,757,178.76, or an
average of a few dollars less than
$400,000 per year. With the tax re
ceipts yielding' the sum of $462,430,
to be paid until they mature, making
a grand total of $1,453,930.00 which
the city will have to pay in retiring
the present bonded indebtedness of
the City Electric Light Plant. These
bonds will all be wiped out and this
load will be lifted off of the City of
Hamilton if the Electric Light Plant
is sold under the proposed plan of
City Council.
Q.—How does the City propose to
sell its Electric Light Plant?
A.—The City will have to adver
tise for bids for thirty days and re
ceive bids for its purchase from any
concern that wants to make an offer.
It has a guarantee before offering
for sale that the Union Gas and
Electric Company of Cincinnati, who
THE BUTLER COUNTY PRESS
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For By the Leading Citizens of Hamilton, Who
Members of the Committee Favoring the
SALE Of
own and operate a competing electric
energy service in the city, will bid
not less than $500,000, plus all out
lay since December for improvements,
estimated at $60,000 more.
Q.—Will this proposed sale cover
all -the City's Electric Light Proper
ty?
A.—No. It is proposed to sell the
Electric Transmission system only.
The City retains its present electric
machinery contained therein, which
are property retained on account of
the waterworks pumping station.
The Citizens Committee favoring
the sa?e of the Electric Light Plant
have hereunto affixed their signatures
to this questionnaire, and believe in
their best judgment that the City
should not build a new Electric Light
Plant, but that it should sell its
transmission lines at not less than
the present offer, which is considered
a fair price, reduce the indebtedness
of the City, and place the City in a
better financial condition, so that the
City Departments may function prop
erly to protect the life, property and
health of the inhabitants of the City.
LIGHT PLANT!
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As Hamilton stands today, it faces
a stone wall. We have no money to
meet the demands of a growing in
dustrial community. Our manufae
turers are growing and more people
are coming to the city every year to
become one of us. New residences
are going up to house these people.
Electric light, gas, and water ex
tensions must be made if the City is
to progress. The City is taking every
dollar out of its electric light re
ceipts that it possibly can take to
pay sinking fund charges in addition
to levying taxes for sinking fund
purposes. There is no money left in
the fund to make extensions and to
properly maintain the electric light
propex*ty and the bonds and interest
charges are eating up the plant.
If the Union Gas and Electric Com
pany acquire the property, Hamilton
will be assured of a reliable and de
pendable supply at all times ample to
meet the demands of today and of the
future.
The Citizens Committee favoring
the sale of the Electric Light Plant.
Per S. M. GOODMAN, Secretary.
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