Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-10
BECLOUD
| D. c. WATER EQUITY
Some Funds Dropped, Others
Included, to Prove Large
Return.
Continued From First Page)

Continued From First Page)
vestment" in its system. If the street
car company tried to include as 'in-
vestment" in plant the money that 1t
spends in maintaining that plant, the
effort would undoubtedly throw the
Public Utilities Commission and other
such agencies into a At of Mysteries
from which it would require months
to recuperate.
But the District water department.
accepting the kindly advice of Mai
Somervell, says that the District OF
Columbias" return upon its met in
vestment" amounts to 7.73 per cent
and 1t is highly enlightening to ex-
anime the methods by which that con-
clusion is arrived at.
Sums Represented.
First there is taken the sum of So
| 082 ,346.53, representing the amount APP
propriated from the general fund of the
District TO build the collecting, purifi-
cation and distribution systems Of the
water plant. The general fund of the
District represents the money raised
from general taxation, plus the annual
contribution from the Federal Govern
ment.
Next there is taken the sum of $685.
! 0866l, representing the amount ap-
| propriated from the general fund of the
| District to maintain the water plant
| through the years since the District
| began to share in the maintenance.
Next there is taken the sum of $14,-
457 ,977,26, representing the tota
amount received by the District Water
Department from water rents and from
main assessments. interest on the as
| as sale of old equipment, and spent on
| new construction.
Next there Is taken the sum of STA.
925, 767.97, which represents the money
received by the water department In
water rents, etc, and spent on main
tanning the water plant.
The sum Of all these items is put
down as the total" District Of Co.
lumbia investment in the water plant
will be noted, Of course. that this
total investment includes $15,857,-
854.58 spent on maintenance, and main
tenance is not considered as an invest
ment in plant--at least not so consid-
cred by accounting experts.
Where Deduction Is Made.
But instead of deducting the amount
spent on maintenance from the total
| investment figure, the water depart
ment and Maj. Somervell, deduct from
the total the sum of $27, 6S4 ,393.05, this
figure representing receipts from sale
of water"
Now what are receipts from sale oil
water?" They are water rents; in other
words, water taxes collected in the main
from taxpayers on real estate, apou'
half Of which has been used actually
to construct the Districts water plant
This half has gone into capital eXpendi-
lures, and capital expenditures are al
ways taken into account, except by
the water department, as representing
investment.
But our water department, with one
grand sweep OF the mailed fist, wipes
out receipts from sale Of water" as
not to be considered as part Of the Dis
trict's investment in plant. although the
receipts from sale of water represent
water rents or water taxes that are paid
by District consumers not only to main
tain but to build their water plant
That is one reason why water rent
are high.
The resulting met" investment of the
District of Columbia" is therefore put
down as Sill Tia, 1882.
lun1bias" investment in water plant, one
would have thought all along that the
water department was speaking OF the
investment of the people OF the Dis
trict OF Columbia" in their water plant
But, presto We find that the table
all along, has been speaking OF thu
District of Columbia" investment al
being the investment Of the municipal
government That is, the District OF
Columbia" is the municipal governing
agency. 1t is conceived as a separate
and distinct entity that has gone into
the water business for profit, that has
spent Its own money in building the
plant and has received so much in re-
turn from selling It's water.
This District government receives and
uses, or wastes, water that has none
tary value Of $7S8,320 a year.
Return 6.Ss Per Cent.
Therefore the return on the District
OF Columbia" investment Is S73S,32
divided by the net investment Of 4ll,-
7l3 1882, or $50 per cent.
In addition, there is return in ex-
tension to property" which means the
percentage of annual increase in capt.
tai investment in the water plant
amounting to 1.43 per cent-6.S0 plus
As eQudIS LIS per CSul-WLllCLl 10 pu'
down as the District of Columbias re-
turn" on its water plant.
Now why is this roundabout method
adopted for arriving at the Districts
investment In its water plant?
It is evidently adopted to prove that
the District Is getting more than ordi'
narily would be expected from its in
vestment, that water rates here are not
too high, and that as matter Of fact
the District should be condemned, not
praised. for quibbling over such trifies
as water rents.
This is obvious, in the first place, be-
cause the conception OF the District
Of Columbia" as being merely the mu-
nicipal government of this city Is alb
surd. The District of Columbia, used
in the sense that Maj. Somervell and
the water department use 1t, means
the people Of the District whose money
has gone into building the water plant
as differentiated from the United States
the other partner in the undertaking.
The government of the District has
no money of its own to spend on q
water plant or anything else. The
government Of the District is merely
the Federal Governments agent for
governing its Capital, collecting and dis
bursting the money used to maintain 1t.
To speak of the District governments