The San Francisco call., 1910-06-08
WATER COMP ANY
in A BAD light
City Officials Scent Sly Trick to
Bolster Up Revenue in Item
for Depreciation

OAKLAND, June I. - City officials
have detected what they believe to be
a veiled threat on the part of tue
against the city as part of the GER
porations expenses for 1909 the s3m
of 100000 for depreciation of the ply
sical properties of the Oakland division
during five years. The company is op-
posing any reduction In rates for the
year beginning July /.
The reason is apparent. The city
and the private consumers are COM
PEELED by law to reimbuse the COM
pany for all its operating expenses and
to pay a fixed rate of interest on the
valuation of the division. The council
has the power of fixing the value of
the plant for rate making purposes,
and for years the company or its pre-
decessors has been in litigation with
the city over rates and valuations. The
actual valuation of the Oakland di-
vision has never been permanently
fixed, and cases in which the valuation
is the issue are now pending.
WOULD RAISE EXPENSES
The purpose of the company in put
ting before the city council an item for
depreciation of values is to raise the
expense account and thus indirectly
bring into the company's Golfers a large
return in rates, even though the valu
alton of Oakland division be reduced
by the council Considerably below the
company estimate. The annual report
filed with the council by the company
gives the expenses for last year as
$436,996.S4. Added to this the $780,
600 for depreciation, the expense ac-
count of the company to be paid by
rate payers this year would be $1,036,-
4 4 =
Gil reduce the Oakland division yalua-
tion by millions the water rate would
be about the same because of the larger
returns the company would be legally
entitled to and the rate payers would
be compelled to make.
The item for depreciation has never
before appeared in any estimate SUBJ
mitted to the council by the company.
1t is given merely as part of the report
on the valution of the Oakland division
which was filed last night in the form
of replies to questions which were put
several weeks go by President Pend
Teton of the council.
The report puts the valuation of Oak
land division at $13,907 507. Then aD-
pears the item, Deduct $4,000 per
year for depreciation from January L.,
$500, 0O0."
This figuring puts the valuation at
$13,307,570. This on it's face is con-
.cession to the city in the form of a
reduced valution on which interest
must be paid; but if the company sus-
tains its figure of 100000 for depre-
citation the saving to the rate payers
will be offset The public will pay
less interest on investment, but must
also make up the lump sum of s1,036,-
996S4 the coming year.
CLAIM COITRT RIGHT
That item of 100000 for deprecia-
ton was undoubtedly inserted by the
attorneys for the company" said City
Attorney John w. Stetson," and there
fore 1 would not attempt to say with
out full investigation what its merits
are. But, of course, it is for the coun-
ell to fix the valuation of the plant or
of Oakland division; whether the valu-
alton will be correct must be deter
mined. On the valuation by the coun-
ell the rates will be fixed"
The company contends that decision
of the supreme court of the United
States, rendered October, 190S makes
the depreciation of properties through
use part of the legitimate expens Sc of
the company, for which the consumes
must be charged for reimbursement of
the supplying concern.