The Cordova daily times., 1921-05-04


 phone plant.
 The attached tabulated statement sets forth clearly the situation which confronts the Alaska Public Utilities in this matter This statement is based on a period of 3 years, that is the calendar years of 1918, 1919 and 1920. Page 1 of this statement shows the amount invested in the telephone plant for each of these years; shows the operating costs for each year and the total receipts for each year. The receipts deducted from the cost of operating shows a loss of $529.77 in operating. This however, allows nothing for depreciation or interest on the investment. The depreciation as carried on the company's books is extremely moderate and is a little over per cent. With this deprecia- tion added it shows a loss of $1634.41 but still the company has not re- ceived any interest whatever on it's investment Charging interest on it's investment at 8 per cent pursuant to Section 8 of the ordinance shows total loss under the terms of the ordinance for years amounting to $4417.49.
 The depreciation charged off on he company's books is entirely too low. There should be charged off at least 10 per cent instead of a little over 3 per cent as appears on the con- pany's books. Should 10 per cent be charged off there would be an addi- tional charge against the plant for $2149.62. In order for the company to have made 8 per cent on it's in- vestment and charged off 10 per cent for depreciation the receipts of the company for the 3 years mentioned should have been $30,229.9 90. Instead the receipts were $23,834.47 or $6,- 3S6,43 less than they should have been. This is shown in detail on page ? of the company's report.
 The company now has in opera tion about 250 phones and it asks your honorable council for permits sion to increase the rate per phone S1.00 per month, that is that Section 6 of said ordinance be so amended as to read that the rate to be charged for telephone service in the town of Cordova to be $500 per month for telephones in residences and $500 per month for telephones in business houses and offices" This raise in rates will increase the com pany's gross revenue for the next three years about $9,00000. The in- creased cost of labor and material over what it was in 1916 when the franchise was granted makes it ut terly impossible for the company to furnish telephone service at the old rate without sustaining an annual loss of over $2OO0.0O. The com pany fully realizes that the telephone 1 plant needs betterments and improve ments but it is utterly impossible to furnish these improvements with out a raise in the rates for the serv- ice. During the three years last past which there can be no question amounting to $441749, and it Is claimed by the company that this estimate of it's loss is entirely too low a figure as there should be charged off a 10 per cent deprecia- tion instead of per cent. The 10 per cent depreciation charged off would make the company's loss 2149.62 more making a loss of $6386.43. This loss plus the improve ment necessary or prompt and ef- ficient service as set out in detail on the last page of the attached state ment would amount to more than the revenue derived by 1t from the in- creased raise in rates, to say nothing of reimbursing the company for any of its loss for the past three years.
 The Alaska Public Utilities re- Spectlully requests tnat d Speclal Con- mittee of the council be appointed to take up with it the question of the readjustment of the rates as herein outlined with the object of reaching an agreement on this question there by avoiding the necessity of referring the matter to the board of arbitration as provided for in section of said ordinance.
 Respectfully submitted,