The bystander. [volume] (Des Moines, Iowa) 1916-1922, 1917-09-28
TO the HONORABLE MAYOR And CITY coun-
Gil OF the CITY OF DEs MONIES:

Gil OF the CITY OF DES MONIES:
: GENTLEMEN:
Our attention has been called to communlca-
: ton of the Corporation Counsel with respect to-
: the conditions surrounding the furnishing OF wa
ter to the city of Des Moines, and filed with your
: Honorable Body on the 18th inst. The statements
conta ned in the communication are so inaccurate
: and misleading that it has seemed to us advisablc|
; to candidy and fully state the facts.
Before discussing the question OF rates and serv-
: ice it is perhaps we'll to refer to some specific
; statements contained in the communication. which
!. in our opinion tend to mislcad.
1t is unfortunately true that more or less lltl9a-
ton has been carried on between the city and the
water company during the existence of the latter,
but your attention is called to the fact that H. we
think every instance the controversy has been de-
termined by the courts in favor of the water COM
: panv which to our mind is demonstration that
the litigation not brought about by the action
of the water company and that much, if not ALL of
it was ill-advised on the part OF the city
+ Referring to the litigation resulting from the,
adoption by the city council of the rate ordinance
: of 1908 The statement of counsel that the result
of that litigation would have been different if the
: court had not, in fixing the value Of the water
4 property, allowed what is known as going con-
Germ valuc' and the cost of paving over mains,
is a assumption on his part and is not we
think. sustained by the record. The court in that
case fixed the value of the property at approXl-
) maelv one million, eight hundred fifty thousand
+ dollars, (S1.85OOOO00) If deduct from this
+ the amount claimed by counsel to represent the
+ two items above referred to (S2S200O0o), we have
b left valuation of one million, five hundred sixty
:. eight thousand dollars (S1,56SOOO!OO). If we
h found that the annual net revenue under the 1908
& ordinance would have been sixty-three thousand.
four hundred ninety-fve dollars (S63 l93.OO).
= which would have produced an income of four per
cent upon the valuation of one Million tive hun
dred sixty-eight thousand dollars (S1.568OOOOO).
f1,o ri that
per annum was reasonable rate upon the value
of the property it cannot be assumed that 1t would
have sustained an ordinance which would only re-
+ turn an income of four per cent-the usual rate
+ paid by savings bank upon deposits, and the rate
u which the government is proposing to pay upon
+ it's bonds and rate less than the city is paying its
+ present bonded Indebtedness
1t is not true that the water company is in any
3 manner responsible for the condition OF the paw
4 ing on West Grand avcnuc-first, because the wa
q ter company has not for years torn up the pave
$ ment for the purpose of extending its mains; and,
second an ordinance which has been in force for
years provides that wherever the pavement is torn
= up by a public utility Others the back-tilllng
and rcpaving shall be done by the city at the cx-
pensc of the public utility person tearing up the
+ pavement If this filling and repaving is not
4 properly done and the result is a bad condition
+ of paving the responsibility does not lie with this
+ company any other public service corporation.
( 1t is not true that this company has been re-
from the wafer consumers VI Tic Clty
< eight per cent per annum fictitious valuation
= If two hundred eghty-two thousand dollars (S2S2,-
: OOOOO) or upon any other valuation.
q 1t is not true that in addition to receiving re-
3 turn of six per cent or less per annum upon the
= value of the water property. we are receiving a
+ meter rental that amounts to further thousands
+ of dollars every year." charged by Corporation
y Counsel. The fact is that the meter rental re-
4 ccived by this company has gone in to make up
4 part of the return on the value of the property,
4 which has approached the rate to which the
4 court held us entitled Those of you who are
q familiar with the history of rate ordinances Will
g. remember that this item of meter rental was placed
6 in the ordinance your own motion, rather than
& to fix rate which would by itself be sufficient to
8 constitute adequate compensation for the service
8 performed
Z With reference to the attempt on the part of
y the city to purchase the water plant. AS result
y of the condemnation proceedings brought by the
f. city, this company and the city agreed upon the
f. price which the city should pay for the property
T. and as result Of that agreement decree was
+ entered in the federal court fixing the amount and
4 providing that the city should pay for the prop
& ertv at any time within year from the date OF
& the Decree 1t certainly is not the fault of this
x company that the city did not pay the price agreed
$ upon and as provided by the decree.
With reference to the high cost of living re-
q fcrred to by counsel. we think you will agree with
y us that this is due to the increase in cost of nearly
j. every commodity which enters into the expense OF