South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-12-03
John ". Toyne Says City Has
Got TO Point Where II
Must Face Facts.

The establishment OF a sinking
fund 70 permit payment Of bonded
Indebtedness. something which here
tofore has not been done, Is the
chief argument OF water works Of
I 6cials for an increase in minimum
rates 20 water consumers.
Funds with which 10 pay of more
than a half million dollars borrow
ed. 100000 OF which Is due IN
1926, are required as a matter OF
good business. stated John w.
Toyne. superintendent OF the wafer
works. IN an interview Saturday.
An added reason for increased re-
ceipts IS 20 eliminate current def
cts which the balance sheets have
shown In recent years.
The cost of operation" says Mr.
Toyne, has increased from s21,-
91721 in 1914 TO about ST., 900 for
the present year. Maintenance. IN
tera5 on capital invested, deprec.a-
ton and sundry items OF expense.
total!ng s161.775.9O is comparative
20 $l28,0S2.07 for the first six
months Of 1922. Revenues do not
take care OF operating costs"
Petition Tor Increase.
Recently the administration petit
ton the Public Service Commission
| for an increase in minimum rates Of
from so cents monthly, plus a meter
rental OF 10 cents to a fiat minimum
rate Of S1.O0 Consumption rates
| are not affected. A hearing by the
| commission. which will probably be
heard in this city, has not yet been
set.
The water-works superintendent
declares that water users must face
the facts as they exist. Costs have
Increased by leaps and bounds,
/ chiefly due 10 the war. and there
| has not been a reduction IN costs
/ TO permit present revenues to take
/ care Of the situation. Bonds have
I been f1oated TO take care OF current
deficits. which have existed at the
! close OF business each year. but no
part OF the receipts have been set
aside TO meet the payment Of these
/ bonds. Mr.. Toyne adds:
In order that no misunderstand-
! ing develop, and that the consum-
/ ers supplied by the City Water de-
,partment may know the conditions
necessitating the request for an IN
| crease in the revenues of the de-
I partment, am submitting the fol-
/ lowing facts. which clearly show
/ that any other course is but temper
I ling and that delay in frankly meet
\ ing the situation simply augments
/ the growing deficit and adds to the
burdens that must eventually be
met.
Must Earn Costs.
AS with an individual or other
business, a utility must earn suf-
| ficient revenue to meet its costs or
It soon becomes insolvent, and this
Is true whether the utility be pr!-
vately owned or be the property Of
| the community which ii serves.
There are two distinct classes Of
costs incurred by every utility rem
/ dering public service, and both have
/ to be considered in computing the
! revenue necessary. They are, the
\ fixed costs which are occasioned by
! the requirements necessary to be
| able TO render the service, including
such items as interest, depreciation,
I taxes. rentals, administration. etc.
| and the operating costs, which are
occasioned in actually rendering the
service required. including such
\ Items as fuel, labor and material
I for maintenance, pumping. reading
meters. billing, collecting, etc.
The value OF the physical prom
| critics or the City water works, Of
use and useful to the utility. amounts
to $1.S75, 900. on which the utility
should earn conservatively six per-
cent, or S112,5OO. as from this
amount must be met such charges
as interest on funded debt which
Is now $4,000 annually, and a
| sinking fund with which 10 pay this
! debt as the bonds mature, approx
/ imately $4,000 annually. and ALEC
/ current extensions TO the pipe lines.
COMPARISON OF Costs.
The following table gives the
/ cost for the period from Jan. 1 &c
l July 1. 1922. also for the years 1914
and 1918, which are all typical:
First = 1915 1914