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<br />~ <br /> <br />THURSDAY <br /> <br />SEPTEMBER 17, 1959 <br /> <br />C. <br /> <br />,..- <br /> <br />Use of Sale Money. <br />This is the question of, if the utility would be sold to Appalachian, <br />how would the ~$I.j., 846,500 proposed purchase price be applied? No concrete <br />development of this point has been made for this report, for here again, <br />such a question would in itself need much detailed study and would largely <br />be influenced by City Council policy decision. The following possible <br />applications are, though, listed since the purchase offer has been made <br />public, and they, or combinations of them, have been mentioned by various <br />citizens. <br />1. Apply to offset revenue loss. If the entire sale return would be <br />applied over a period of years to offsetting revenue loss on the basis of <br />$354,320.78 per year and unused balances would be invested at currently <br />prevailing possible interest rates with the interest being added annual~ <br />to the principal and used with the principal, then the $4,846,500 would be <br />sufficient to offset for a period of 18~- years provided the sale money is <br />used in no other manner. <br />That statement and the result is made on the status simply of the two <br />or three elements mentioned. In actual and practical analysis, of course, <br />many other factors become involved. <br />2. Pa;yment of present outstanding bonded indebtedness. Wi th the <br />exception of school literary loans, the boms of the City are not callable. <br />That is to say, total interest over remaining years along 1J'Q th outstandir:g <br />principal would have to be comidered in settlip~ up bond accounts. <br />Schedules in the section on bonds list in detail, for stuqy, the present <br />city bond program along with related stat.istics concerning the proGram. <br />3. Capital Improve1rent Projects. In that section of this report some <br />of the pending projects are listed for analysis in connection with possible <br />financing by use of electric utility sale money. <br />In conclusion, the following summary deductions are respectfully <br />submitted: <br />1. The electric utility system is a justifiable property of the people <br />of the City of Martimville. <br />2. The utility system is in excellent condition insofar as its <br />capacity to meet the present and future electrical requirements <br />of the city. <br />3. The electric utility has not caused, is not causing, and, so far as <br />the future can be predicted, will not cause an undue burden <br />financial~ or othervrise upon -the citizens or the:i...rgovernment. <br />).j.. The city utility system is a major financial contributor to the city <br />government and in turn a beneficiary of the citizens, and as such <br />the replacement of its financial value by other means would impose <br />questionable difficulties. <br />5. The offered purchase price is very comiderably below the net worth, <br />viewed from ma~ aspects, of the electric utility system to the <br />people of martinsville. <br />It would therefore, in view <br />that the City retain its electric <br />City Council decline the proposal <br /> <br />of the foregoing, be considered desirable <br />system and the suggestion is made that <br />of Appalachian Power Comparw. <br /> <br />The City Council is assured of full and complete cooperation of all <br />personnel of the governmental organization in arw course the Council, by its <br />deciSion, may wish to follow with regard to the matter now before the <br />governing bo dy . <br />