Show BONNEVILLE IRRIGATION PROJECT PROJECT SO i p SO THE PEOPLE MAY KNOW A brief comparison of the plan of compromise of the bond issue o of the Bonneville Bonne Irrigation district as 35 pro pro- proposed pro proposed posed by leaders of and the attorneys I Ifor for the district and the plan pro I pro pro pro- proposed posed b by Heber J Steiner as seen I Any effective plan of compromise must of necessity be based on s such ch cht t terms ms as are advantageous profitable and acceptable to all an parties concern concern- concerned concerned concerned ed The first plan meets the above re- re requirements re requirements as far as the attorneys for the district are arc concerned in that it would insure them thorn ample employ employ- employment employment employment ment for at least 12 years and in in that their fees feci would be a prior henon lien hen on on the funds as very definitely set forth in paragraph 8 o of their proposal pro pro- proposal posa l Incident Incidentally it might be in interesting tere ting to note that that man many legal ac- ac actions ac actions have been ben initiated b by the dif dif- different dif different ferent factions of the district not one of which was brought against ag the bond band holders but that the members were fi fighting amongst among themselves The first fiat plan is not to the district t members me for the following follow follow- following following ing ing- 1 reasons en a n It would involve additional obligations without an any definite assurance as- as assurance as assurance ofa of a n permanent settlement ib It is unjust in that no con con- consideration con consideration is given i en to those who paid their n assessments and no penalties imp ed edon on those who did not I ac It is arbitrary being based on the original l allotment I thereby requiring some sonic members to play pay more than their just proportion proportion- proportionate toI I ate share of the debts b by requiring I those who dp not need or want wa- wa water Wa Water a ter to subscribe for the am amount of w water tel that Was vas allotted to them inthe in inthe the original allotment d It would be expensive ive and cumbersome in that it would require abou about separate examinations examination ol of title executing and recording notes and mortgages and more attorney fe fees s c e It would impair the credit rating and business standing o of the district members to be mortgage debtors f f Having a large number of small owners of water rights stock outstanding outstanding- among users non-users who would be heavily involved would have a very depressing effect on the price of the water stock and would be n a serious cause of dissatisfaction and loss to the district m members especially es- es especially es especially so in view of the fact that the user non-user of Water Vater by such own own- owners own own- owners owners ers would indirectly increase the pumping charges of those who use I water due to the peak peak load price of any iJ public utility power company g The proposal as a Whole is ambiguous indefinite and impractical and is a crude and tra transparent rent scheme to release a small portion of valuable land in the district from liability on the bond issue at the low low- lowest lowest lowest est possible cost to the favored f few w who regardless own that class of land regard regard- less of the final outcome for the dis- dis district district dis district as a whole or the bondholders or the other creditors or whether the pumping project will succeed or fail h The magnitude of the legal work that would be involved b by first proposal is almost and would probably be overlooked if the attorneys had not been so explicit in protecting their own interests in priority payments of their fees fee to it would require about 1 1 1800 1 separate acts on the part of the attorneys to perform each one of 1 which would be entitled to compensation compensation in order to comply with only one of the many many many employments as set se forth in paragraph 8 of their pro pro- proposal proposal X sn 1 i The one redeeming factor is i s that Lincoln was was right when he Said You can fool some of the people all of the time all the people some of the time but you cannot fool all th the e people all the time The fact that tha t induced the district members could not be in- in in to further obligate under such a compromise is a very great compliment to th their h intelligent enle and shrewdness pee especially in view view n fact lh that t theW theme the W me k er s are extremely an anxious ious to compromise compromis e its difficulties 3 A few of the reasons that the au- au au bondholders thor author predicts will prevent the bond bond- holders from accepting accepting- the first pro pro- pro pr o- o proposal MS nr a that the present presen t priority of their claims would b be e te waved and would be placed on a par pa r with the other present obligations and would actually be subordinate to toa t ta toa a a large e number of debts tha that t it is i s proposed to contract in the future b That it practically confiscates ates of the bondholders money by transferring same skime to the so called Holding Company c c Because the amount that they might receive is so indefinite and Vague bondholders that the representative bond holders cannot estimate the returns to enable thorn them to intelligently in- in in inform form their the clients clients the individual bond owners how owners how much that they might expect and when d Because they cy would be to the jurisdiction of the state courts and even then could only act through the Holding Company c That no provision is is made n to any payment by any person member or subscriber for at least 11 years f f That the bond holde holders would lose Jose i all of the many legal advantages 15 1 that they attained by the several ad- ad I adI I ad indications that they hey have heretofore had in in their favor and in the event ent of default it would take them at least 12 years to re establish themselves them them- themselves themselves selves in the same position that they are arc in at the present time g That they would transfer a blanket lien covering all of the prop prop- property property property erty embraced in the district for the full amount of the bond issue the bonds have been ben adjudicated legal valid and enforceable and receive therefore stock for third one-third of their d ims in a corporation whose total assets are only a part of the pres pres- present pres- pres present present ent security of the bond holders and even that is modified to such an ex- ex extent ex extent tent that its value is reduced fully third 1 third one as an asseth asset asseth h Because the proposal as 15 a whole i i authors author's opinion is ambiguous am- am ambiguous am ambiguous indefinite misleading im- im impractical im impractical practical pla and would not attain the results contemplated would be ex- ex expensive expensive ex expensive pensive and cumbersome would not pay or otherwise retire the bond is- is issue issue is issue sue would not relieve the district of its difficulties nor solve its pumping and would only increase the legal leg difficulties and prolong the tha solution At t the end of 11 U years what th then m Who will re-finance re the notes and mortgages es How can the district be with So 35 per pel cent of the bonds still outstanding What assurance have the district that the 35 per cent of the bondholders will vill wait 11 years vears without with with- without without out even a promise How Ilow is it proposed to dispose of the 35 per cent of bonds which at time will amount to including including in ing interest for 11 years Do they propose to repeat the present condition on a larger scale repudiate the bonds trust to lock or orto orto orto to pa pay pay- them If they intend to pay the at that time who will twill be likely to loan them the money moner or how hots do the they propose to raise such a large sum Do they advise the district mem mem- members members bers to improve improve their lands with per per- permanent permanent permanent manent improvements thereby in- in increasing increasing in increasing creasing creasing- the security of the minor minor- minority minority minority ity We bondholders We will now consider the proposal by by Heber J Steiner as published in i n last weeks Clipper I This his plan is definite reasonable clear concise practical and easil easily y understood It is plain and simple and anyone can understand just what it means principles It is based on an sound business prin prin- prin- prin principles principles in that every angle is con con- considered con con- considered considered and provided for in a busi busi- businesslike businesslike ness like manner It meets the issue squarely and without evasion Nothing could be more simple than to actually get what you pay for and to actually pa pay just what you ou agree to pa pay This Elan plan lan would be acceptable because be- be be because cause it would be prof profitable table to the bondholders the irrigation district and each and every ery one of its mem mem- members members bers the water users both in and out of the district the irrigation wa- wa water wa water water ter company the culinary water company the power company and all others connected with or dependent on winter water in the south end of Davis county including the municipality of Bountiful It is the only proposal ever sub sub- submitted submitted to Bonneville without a single objection It is the only proposal wherein no noone noone noone one is placed at a disadvantage and everyone is benefited This is the only proposal submitted where there is a likelihood of the bondholders accepting This proposal would the dis districts internal friction We have disregarded the court ac- ac action action ac action tion phase because there would be nothing to adjudicate The whole plan was designed deigned from commercial engineering financial commercial and practical stand points related co-related co to each other as to form a composite whole The gist git gis t of it is reduced to its simplest form cheaper power en- en enlarged enlarged en enlarged area whereby reducing pro pro- proportionate pro proportionate cost a 1 reasonable com corn compromise compromise promise offer otter a satisfactory water allotment a more efficient system of distribution a feasible financial pro pro- pro program gram and most important of all a determination to work to together ether Respectfully Ily H HEBER BER J J J STEINER STINER Note This is the second of a ser ser- ser ser- series series series ies of articles on Bonneville The next will appear next week in the Clipper |