Colorado Consolation

Last week a Kentucky citizens' committee appointed by Mayor Joseph D. Scholtz finished its diagnosis of the aches and pains of Louisville's overexpanded, undernourished-city water system and wrote a prescription. Its remedy: turn the $22,000,000 system over to private operation for ten years. Responsible American Water Works & Electric Co., operator of some 80 other water plants, had offered to run the plant profitably for a portion or the savings it could make on operation. To Mayor Scholtz's committee, astounded by the low earnings under city management (2 1/2%), flabbergasted by a helter-skelter rate structure (51 1/2% of Louisville consumers pay too much, 30% too little), it sounded like a good idea.

If public ownership should always turn out Louisville-style, the sooner the U. S. public could forget about it the better off it would be. But this week, while doubtful Louisville citizens could look south into the TVA area and wonder how the greatest public ownership project in U. S. history would turn out, they could look west to plushy, conservative Colorado Springs, Colo., and see how one public ownership enterprise did turn out. For Colorado Springs (pop. 35,000) had just paid off the last $181,000 of the $2,200,000 debt it assumed when it began city operation of its gas and electric light plant 14 years ago.

What smart municipal management can do with a public utility Colorado Springs citizens heard when they gathered in the city auditorium one night this week to celebrate the mortgage burning. Its symbol was on the stage: shy, onetime sheriff, Mayor George G. Birdsall, who in 18 years on the City Council has drawn no salary, has gigged the city for not a single cent of expense money. Its mouthpiece was beside him: stocky, blue-eyed onetime Utility Engineer Earl Louis Mosley, who has been the city's light and gas plant manager since it was taken over from United Gas and Electric Corp. in 1925.

For the past ten years Earl Mosley has also been City Manager (salary for all his jobs: $7,500 a year) and he knew what he was talking about. Colorado Springs beamed as he read the record:

P:When the city took over the plant it was worth $2,478,000. Today it is worth $4,433,000.

P:Since 1925 it has had a total net profit of $4,277,000. From this it has paid $467,500 to the municipality to finance WPA projects and other city enterprises. In addition to $2,200,000 for bond retirement it has spent $1,398,200 on plant expansion, written off $100,000 in old equipment, laid away $111,800 for working capital.

P:Before figuring its net it has duly paid the city $1,181,000 in lieu of taxes.

P:To Colorado Springs' thriving water department (also city-operated) it has paid $610,000 for use of water gathered from the sides of Pikes Peak, which turns the wheels of the hydro plants on the way down to the settling basins.

P:Stepping up per capita kilowatt-hour sales some 148% in twelve years, it has given seven rate reductions. In 1926 the average rate was 8.74-c- per kwh: today it is 3.78-c-.

For the operation of his gas plant Earl Mosley has to take slim profit for the city, since natural gas is bought from a pipeline and prices are high. But since 1926, rates (originally for home use of manufactured gas) have come down from an average of $1.62 per thousand feet to 64 1/2-c- in a wider residential and industrial market. Meanwhile, efficient operation of the electric side's steam and water plants (which respectively supply 53% and 47% of the output) has put many a pretty penny in the pocket of Colorado Springs' taxpayers.

Compared with 1926 rates the city's electric users saved $440,000 on their electric bills. Meanwhile, payments in lieu of taxes and kickbacks to the public fund have whacked off a big chunk of the city's public debt. In 1925 Colorado Springs had a per capita debt of $145. Today it is only slightly above $61.

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