Minutes 07/20/1954 - Laserfiche WebLink

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2E TUESDAY JULY 20, 1954 This can be done by simply providinG an exclusive franchise on the pain of the grantee providinG satisfactory service. Section 16 of the attached franchise provides one means :e'or enforcing the terms of the :,:'ranchise without day to day interference or regulation by the GoverrJnent. Alternate Section 16 provides a somewhat less direct means. A combination of the tvfO cOl).ld be considered. There are many other means. ,-. Turning to the proposed franchise of the grantee, you will note that I have made no chan~G in Section 11. I do not want this to be necessarily regarded as approval of the 2% gross receipts tax. Rather, I copied this section with no change feeling that the final decision on this "mulcl be dependent to a certain extent on other aspects 01 the franchisp. LikevrJ.se, I do not consider this section to be of the utmost importance because if the crantee is to be allm'fed a fair return on his investment, the ridinG public will most likely pay the tax whether it be large or small. Certainly i1 the size of the tax will in a~y way serve to tie the Courcil's hands now or in the future, then it would be better to have no tax at all. ;- i~ v> = Looking at Section 1 of the Grantee's Droposed franchise, we see that the sched-J.IGs, routes, fares and service must be jointly agreed upon by the City and the grantee. Looking at the Worst this coulel. provide for complete disagreement and cieadlock with no means of settlement. At best :Lt means a complete operating partnership between the eity and the grantee. As previously stated, I feel that the public interest (and likewise the grantee's interest) would best be served by the grantee being expedted to operate tl~ busses in a satisfactory and businesslike manner wi thout Government aid or inter:;.'orence. In Section h of grantee t s proposed franchise it is provided that grantee need not operate any runs at a loss even though the system as a whole may be earning a fair return. In this connection I quote Mosher and Crawford, Public Utility Regulation, page 101+ and 105: "The Suprene COill't has been consistent in ruling that a utility company may be comDelled to op'2r2te a part of its system at a loss, and even -where the s;ystem as a whole fails to earn a fair return on the value of the property. On the other hand, it cannot be compelled to continue operations at a loss if it sees fit to surrender its franchise ;'nd entirely abandon the enterprise. To enforce continuance under such circumstances was held to constitute a voilation 0 f the Fourteenth Amendment. II ......-..,. IIIn handling cases of abandonment, commissions have developed certain definite principles. First, public necessity and convenience must be safeguarded. Second, companier are usually not allowed to abandon their unprofitable lines or sections, so long as the system as a whole c an carry these sections....... II -- In conclusion, I can assure Council that whether it is decided that it would be best not to provide a ::.'ranchise, or one is granted w--lth minimum regulation but ultimate control, or one of some other t;ype is enacted, the bus operator can be assured of maximUlil cooperation from this office rJecause the imDortance of a public transportation :3ystem as it affects our total traffic Droblem is clear~ recognized and appreciated. I hope that Council and the bus cOD'.pany may join hand::; in seeking to provide an adequate bus syst.em for the public with a miYlimum of government red tape, aid and regulation--one that will be operated insofar as is possible on the American principal of freedom of enterprise. IIThose who are gove:~ned least are [(overned best.1I