The bystander. [volume] (Des Moines, Iowa) 1916-1922, 1917-09-28
The Des Moines Water Company

the case may require. 1t goes without saving 81
however, that it is not worth while to open the dis N
cussion of the terms of franchise while there is Nd
pending controversy rates. We deem MI
therefore exceedingly unfortunate that the Cor Nh
poration Counsel should have raised an issue with ~
reference to rates at this particular time because XII
to highly important to the city and the M
water consumers, we'll to the water COM KIN
pany, that the rights and obligations of the water xM
company should be fixed and defined by a prop {@
erly enacted franchise and that such franchise ~
should be enacted promptly that there NAV be 4M
no delay ir making the necessary improvements ?N
and extensions to the plant The question of rates w
is one over which your Honorable Body always ~
has jurisdiction, subject only to the constitutional I'D
provision that the same must be reasonable. -
Referring to the question of the adequacy "a
iof the existing rates An adequate rate neccSsar ~
lily depends largely upon the value of the property 81
In the wear 1912 the value of the water plant A
fixed in judicial proceeding between the city and jE
the water company by court consisting of three RI
of the ablcst district judges in Iowa, of whom III
is now chief justice of the Supreme Court of Iowa XE
After long and exhaustive hearing these judges H
fixed the value of the property of April l. 1912, II
at two million, three hundred two thousand, five =
hundred twenty-five dollars (S23O2,5220O). The "
value thus fixed by the court, while not entirely y
satisfactory either to the officials of the water u
company to the officials of the city after ~
ward agreed upon by both the city and the water
company as being the fair value of the property, II
interested judges after careful and exhaustive in =
vestgation we think it should be taken by every 4
body as representing the fair value of the prop (
ery at that time. Since that date and prior to JAN
uary of this year, the water company has (
actually expended in extensions and additions to (
its property the sum of four hundred forty-five :
thousand, one hundred ninety-seven and 24-10O !
dollars ($445 1920. not taking into consideration !
the cost of eng ineering and administration. In 7
view of these facts and of the vast increase in the 7
value of property generally, we think it cannot 7
be said that the present value of the water plant \
is less than the total of the two above men i
toned, the of two million, seven hundred /
forty-seven thousand. seven hundred ten and II i
! 100 dollars (S2,74771O.2D, and view of this /
valuation is strengthened and fortified by the fact /
! that your honorable body in April of this year. 3
valued this property for the purposes of taxation I
at three million dollars ($3,OO0,O 100000. I
i. The net revenue of the water company IN the (
year 1916 after paying operating expenses, de- {
probation and taxes, was the sum of one hundred
sixtv-four thousand. nine hundred forty-six and 3
80 100 dollars (S1649l653, which is six per cent :
upon valuation of two million. seven hundred :
forty-seven thousand, seven hundred ten and "a 4
100 dollars (S2,7477102D, or less than five and !
one-half per cent upon the value as fixed by you 1
for the purposes of taxation. i
II We anticipate that the net revenues of the cur 1
rent year will be considerably less than they were
for the year 1916, and also anticipate further
reduction for the year 1918. We anticipate these
reductions. first, because of the very great increase
in all items going to make up operating expenses,
and, second by reason of the very large increase
in the taxes will be required to pay, both by
reason of the increased value of the property made
by your honorable body for the purposes Of taxa
>, ton, and the increase in the tax rate.
i In conclusion desire to suggest to you that
), if the water company is to keep pace with the :
growth Of the city of Des Mones. two things are
, essential: First the water company must have !
reasonable franchise that it may the per-
SONS from whom it borrows money, of the pcrman- i
ence of the proposition; second it must have rate
that is adequate to pay not only its operating
} expenses, but reasonable return upon the in .
vestmen so that it may the persons from
r whom it borrows money that the investment is
safe one The water plant of this company IS
recognized by water works engineers as being one
of the best in the United States and the service it
performs is recognized of very high Standard
!, Des Moines is rapidly growing city If this
company is to continue its high standard Of serv-
ice, it cannot stand still-t must continually in
5 vest large amounts of fresh capital In order to
acquire this capital it must not only have fran
chlsc that will permit it to do business but it must
receive rate for its service which will permit it to
acquire this capital in competition with other .
+ public utilities similarly situated
> Respectfully submitted.
DIES MONIES WATER COMPANY, .
BY Charles S. Dcnm;n, General Manager. ,
a. = D. -