Chapter Seventeen
Sebring Utilities
The current controversies centered around the Sebring utilities and the costs of services may focus some interest in the origin and development of the facilities. It will be noted that some of the experiences and problems parallel those of today.
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The original power and water Plant was built by George E. Sebring in 1912. It was a 50 KVA generator powered by a steam boiler and engine. The fuel consisted of slabs and other waste wood from the sawmill on Dinner Lake.
Even though the buildings in the new town were scattered, service was made available to most of them. That is, such as the service was. There was, at the time, little or no demand for power in the daytime so the plant was activated a six o’clock in the evening and shut down at eleven. At 15 minutes before the hour, the lights would blink as a signal to light the kerosene lamps. It was in 1915 when the time was extended to midnight for closing down.
Use of electric power consisted almost entirely in home lighting and a few street lights on the Circle. A room was considered well lighted by a single lamp suspended from the ceiling. Most of these lamps were 16 or 32 candle power with “carbon filaments.” Later improvements included lamps with “tungsten filaments” and were designated as 40 or 60 watts instead of so many candle power.
The first appliances for the home made their appearance in the form of electric irons and washing machines. (Water heaters and refrigerators did not emerge until the mid-twenties.) It was not until 1915 that a special arrangement was made to operate the plant one morning a week to accommodate the washing and ironing needs. The owners of the utilities resisted all efforts of the city administration to persuade them to furnish power all night.
While the Sebring interests owned the utilities, Aaron Withers managed the operations and Ed Harshman was the principal plant engineer.
In 1913, G. F. Bobb (an electrical contractor from New Cumberland Penna.) was coming to Florida on a train for a winter vacation in St. Petersburg. On the train, he met George E, Sebring who persuaded him to investigate an offer to buy the Sebring utilities. Mr. Bobb envisioned some problems in a one-man ownership but agreed to a half interest so he took over the plant in July 1914. (Many years later, He recalled that the Sebring’s never took any part in the operations or problems nor even looked at the books.)
G F. Bobb was a good businessman who paid his bills promptly and expected other people to pay their electric and water bills promptly. His firmness in enforcing this policy did not endear him in the public opinion nor did one of his first revisions of policy. Until he bought into the company, all electric service was billed at $ 1.50 per month, flat rate. Water service was furnished for $ 1.00 a month also flat rate. Mr. Bobb began to install meters on electric services - a most unpopular move.
The growth of Sebring was dynamic and, by the end of 1914, the estimated population was is the neighborhood of 400. This necessitated some expansion of the plant capacity so a used generator was purchased in Winter Garden and moved to Sebring. This was also steam-powered and had a capacity of 100 KVA. (This was about enough to light a present-day high school football field.)
No figures are available that will reflect the cost of the new installation but it is know that one third came from the capital funds of the company and the firm borrowed the remaining two thirds.
The water system was quite adequate for the small town. Two deep wells (one between 800 and 900 feet and the other something over 1,300 feet) were seated in the Ocala stratum limestone, hence the water had a very faint odor of sulphur as it came from the wells but which became imperceptible in the aeration process when discharged into the 90 foot high elevated storage tank. The pumps also aided in the aeration. They were set in pits about 15 feet below ground level and were activated by steam pressure. They pumped air into the wells and the air pressure raised the water.
The two wells must have been in the same underground stratum because although either well would deliver 90 gallons per minute, only 90 gallons were recovered when the two pumps were operated at the same time.
The principal main lines were 4 inch diameter cast iron pipe in three areas. One line ran along Lakeview Drive from Eucalyptus on the north to Kenilworth on the south. The second went east on Pine Street to Lemon Street. The third ran south on Commerce to the alley around the Circle (Wall Street) thence around this alley. Some two inch and some smaller lines branched off these mains. Pressure at the Circle was a maximum of 40 pounds.
Before Mr. Bobb acquired an interest in the utilities, Mr. Sebring offered to sell the facilities to the City of Sebring for $ 10,000 (August 1913). Even had the City wished to buy, it had no money and less incentive although during the first few years of operation as an incorporated city, almost half of the annual budget was earmarked for municipal water, fire hydrant standby and electricity for street lighting.
It was necessary to negotiate a franchise agreement and one of the clauses specified that the City had the option to buy the facilities at the end of any five year period, at a price equal to the physical inventory. By the end of the first five years, the City was still not in position to finance the purchase but the Council demanded that the company furnish service all night and expand daytime service with the hope that business activities (such as ice manufacturing and fruit packing) would be attracted. As this would not be financially profitable, the Company refused even though the City threatened court action.
A groundswell of public opinion took form in 1919, that the City should exercise its option at the end of the second five years (1923) so a referendum was held in March 1921 at which time the voters approved the purchase by a 51 to 30 ballot. Negotiations followed and in January 1923, the City paid the company $ 83,966.88 and took over the operation of the water and light plants.
To finance the purchase, a bond issue was necessary. Another issue was needed to put the plant in condition to meet immediate needs and, as the Florida boom developed in the next two years, one bond issue after another was floated to meet the dreams of real estate developers. Before the boom bubble busted, and the nation was plunged into the Big Depression, bonds had been sold to be charged against the plant as follows;
June 1921 $ 100,000 7% (to purchase)
October 1924 135,000 5 1/2%
July 1925 300,000 6%
In addition to the bond issues, certificates of indebtedness guaranteed payment for diesel powered generators and other equipment. The City had discarded the steam plants immediately after purchase. The funds from the sale of bonds were devoted to improving the system of water mains and power lines. Sales revenues paid for drilling wells and, in 1927, an inventory showed a value of the water and electric systems to be $ 750,000.
The business of the utilities was administered by a committee of the City Council. Employees included a manager who had charge of the plant and all outside operations. Bookkeeping and accounts were maintained and bills were collected by the office of the city clerk.
The 90 gallon per minute water supply proved to be totally inadequate in the early era of municipal ownership so new sources were essential After investigation, the Council decided to install “gravel wall wells.” These were relatively shallow and, instead of drawing from deep underground streams in limestone strata, water was drawn from sandy strata 200 to 300 feet down.
Screens in the intake pipe were surrounded by layers of gravel which were intended to prevent the sand from entering the screens but, in the late 1920’s and early 1930’s, one well after another failed and the City Council was plagued with the problem of obtaining a satisfactory water supply. At one time, the fire truck was set at the lake and it pumped directly into the distribution system for more than a month.
Repeated tests indicated that the lake water was fit for domestic use even though no chlorination or other purification steps were taken. That was in the 1920’s.
The City of Sebring, like many other Florida communities, had been the victim of “boom fever” and had anticipated a continuing growth. To meet the current and expected demands, it had contracted debts which, by 1930, it found impossible to meet. Many of the boom-time residents had gone back north and many who remained did so because they had no funds on which to travel. Neither did they have money to pay taxes or utility bills. THE CITY WAS IN A STATE OF BANKRUPTCY!
A copy of a report for three years ending June 30, 1932, to the City Council will best reflect the position as related to the water and power department: -
CASH LEDGER Receipts Disbursements Balance
July 1, 1929, Balance forward 1,267.12
1929-1930 Totals 67,600.99 68,619.36
1930-1931 83,555.81 76,428.87
1931-1932 81,789.77 46,078.04 23,037.42
RECEIVABLE LEDGER Charges CollectionsJuly 1, 1929, Balance forward 32,264.94
1929-1930 Totals 95,732.22 68,115.40
1930-1931 90,452.21 136,553.67
1931-1932 85,284.45 59,716.47 40,348.28
Explanations
Disbursements include expense and payables of all kinds.
Balance was consumed and is due from other departments.
Charges are consumers accounts shown in revenue ledger.
Collections include adjustments and over fifty thousand dollars charged off by auditors for bad accounts and light and water furnished the City and not paid for since 1928.
Balance - Light & Power accounts due 31,036.55
Water accounts due 9,236.73
Miscellaneous accounts due 75.00
and this balance includes charges to the City far street lights, fire hydrants and other services for past year.
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A quick reading of the above report and the explanations (together with other sections of the report which was too lengthy and detailed to reproduce here in full) give a clear picture of the business operations of the Light & Water Department and also the mood of the consumers. Some people just simply did not pay their bills and the City Administration took only feeble steps to enforce collections. These figures show that, over a three year period, consumers owed the city more than $ 40,000 even after more than $ 50,000 had been written off.
The report also sets forth the fact that, in spite of the great loss in accounts receivable, receipts exceeded operational expenses but these receipts (not only net profits) were used to pay expenses of other departments of the city. Unfortunately, there was not enough income to operate the utilities and all other municipal functions so, at the end of 1932, all employees were behind in their wages and most suppliers had put the City on a basis of “collect before delivery.” Even for shipments of fuel for energizing the generators, payment was demanded before the oil was off-loaded.
Conditions became so involved that something HAD to be done.
The City was faced with many court actions by vendors trying to recover payment for materials - and from bondholders who were victims of the City’s default in payment of interest. At one point, it appeared that bondholders might force the City to assess a 2,000 mill tax levy and another suit would force the City to sell the utilities to satisfy claims. By good fortune, the courts favored the City in these actions.
A courageous City Council attacked the problems in a forthright manner in 1933 with the complete cooperation of the employees of the city.
The Council set up some rigid policies and hired Allen Altvater as manager to enforce them. At the same time, employees cooperated by serving far beyond their normal job activities. (As an instance of this, firemen read meters when off-shift, without additional pay)
As a result of this combined effort, it was possible for the manager to submit the following report to the Council at the end of the first seven months of 1933:
As of Jan. 18th As of July 18th
1- Number of light & water accounts delinquent
for previous month but still receiving service 32 12
2- Amount due City on these delinquent
accounts (Previous month only) $ 2,201.00 $ 26.40
3- Current bills that were due, OK’d
but unpaid for lack of funds 1,628.35 All paid
4- Amount due city employees for back wages 1,457.38 All paid
5- Amount of money in bank credited to
meter deposit fund None 4,155.00
6- Amount in bank deposited to General
operating fund 487.98 1,767.04
With smoothly operating procedures and collections of revenues due the Light & Water Department, the City was able to reestablish its credit and operate in the black. Some beneficial changes were made in the rate structures that year.
In instituting and enforcing strict policies the Administration incurred the displeasure of many who had previously benefited by lax procedures of former regimes, so it was no surprise that there were changes in some Council seats at the next election and that the manager system was abolished. But good practices had been established and, in general, they have been followed since then.
(This article is reprinted from Bulletin Number Twenty One
Sebring Historical Society, January 1976. Pages 649-655.)
Reprint from the Highlands County News of August 3, 1939
REFUND OF CITY DEBT SAVED TAXPAYERS OF SEBRING$ 7,640,000.00
The refunding of the bond debt of the City of Sebring saved the taxpayers exactly $ 7,640,000. Yes, gentle reader those figures are correct, exactly seven million six hundred and forty thousand dollars, and this is not a reporter’s dream, but a statement of a certified public accountant, A. Gilbert Lester, city auditor, in a talk at the Lions Club luncheon Tuesday, stated that was the figure the audit shows.
Mr. Lester, who has been auditing the city books for several years was called on for an impromptu talk Tuesday at Lions Club and shocked the credulity of his listeners until he showed them how such a huge savings was made in the settlement of a $ 4,800,000.
He pointed out that the fifty percent cut in the principal saved the tax payers $ 1,404,00. The cut in interest coupons saved $ 700,000. The saving on certificates of indebtedness if paid up at 20 cents on the dollar is $ 560,000. The savings on difference of interest on the new bonds in comparison with the old bonds over a period of 30 years, $ 3,776,000. Lastly, the potential saving of 90 percent on taxes and assessments due the city as of 1936, $ 1,200,000.
It will be noted that in all the figures mentioned, Mr. Lester qualified only the last one by the word approximately or in any other way.
A local businessman after looking over the figures remarked that a BRONZE PLAQUE OF THE FIGURES SHOULD BE PUT ON A MONUMENT ON THE CIRCLE AND ANYONE WHO PROPOSED A BOND ISSUE IN THE FUTURE SHOULD BE MADE TO STUDY THE FIGURES EVERY DAY FOR A YEAR BEFORE THE ISSUE BE PUT TO A VOTE.
Mr. Lester, in continuing his talk, mentioned that building permits for the past month are more than at any time in the history of the town for the same period. He also mentioned that other towns had refunded at 100 cents on the dollar and some of them have already defaulted on interest payments on the refunding bonds.
Winter Haven is now staging a drive to collect taxes because of such a default in order to get in position to refund again at a lower interest rate, the speaker said. He concluded his talk with the statement that “Sebring has completed the best refund I have heard of.”
From the Highlands County News, September 9, 1949
UTILITIES PAY LARGE SUM TO RUN CITY
The Sebring Utilities Commission paid the City of Sebring $ 86,676.73 out of income derived from the operation of city-owned power, gas and water plants, for the fiscal year ended May 31, according to a report just issued. This money was used for operating expenses of the city including such items as garbage collection, fire and police protection, care of streets, parks and pier, and other expenses. Total income for the year was $ 290,843.45.
In addition to the money turned over to the city, the Commission put $ 43,140.17 in the sinking fund for replacements and expansion of city utilities. Of this amount, $ 25,110.25 was spent for capital improvement, the report shows. Largest item of expense for operating was $ 60,481.89 for diesel fuel and lubricating oil. Wages for operating the electric, water and gas plants, maintenance, meter reading and office were $ 55,148.38.
Other items of expense were shown to be power plant repair parts $ 7,993.64; other electric expense $ 6,976.29; state utility tax $ 3,396.79; butane $ 13,475.98; other gas expense $ 1,188.96; water expense $ 1,460.31; office and meter reading expense $ 3,941.12; and interest and insurance $ 6,696.89.
The income dollar was divided as follows: City of Sebring 29.8 cents; diesel and fuel oil 20.8 cents; power plant repairs 2.7 cents; electric expenses 2.4 cents; state utility tax 1.2 cents; butane 4.6 cents; gas expense .4 cent; water expense .6 cent; office and meter reading 1.4 cents; interest and insurance 2.3 cents; sinking fund 14.8 cents; wages 19.0 cents.
(This article is reprinted from Bulletin Number Thirty Six
Sebring Historical Society, April 1982. Pages 1030 & 1036.)