The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-12-09
VALUATIONS OF
WATER CO. ARE
C|TY'S TARGET
Commissioner Steps Down
to Conduct Close Probe
of Figures.
LABOR COSTS SIFTED
Utility Aid Defends Method
of Appraisal and Its
Results.
BY JAMES DOSs

BY JAMES DOSS
The public service commission to-
day made its contribution to the
hearing for determining permanent
rates to be charged by the In
dianapolis Water Company, when it
submitted evidence gathered by
commission engineers on the COM
pany's cost of reproduction new.
This procedure placed Howell Ell
lis, presiding member of the COM
mission, in the position of counsel
as we'll as jurist, as he stepped down
from the bench to conduct the pre-
liminary examination of Harry
Wenger, the commissions chief en-
gineer.
In playing this dual role, which
is according to rate case procedure,
Ellis several times was put in the
somewhat anomalous position of
%overruling objections to his own
questions.
Thorough Check Claimed
Wenger testified that he and his
aids went thoroughly into the wa
ter company holdings to arrive at
a replacement deprecated $17,819,-
718 on the fixed tangible value.
This figure contrasts with the
better than $4,000, 900 valuation on
which the water company bases its
appeal for a. higher minimum rate
tina nthe S1.08, fixed by an emer-
gency decree of the public service
commission.
During the period since June of
this year. Wenger testified, he has
had from twelve to thirty-four men
at work checking the inventory and
appraisal of the company's physical
properties. The number of men
constantly at work on the project
averaged siteeen, he said,
During all of the inventory,
Wenger testified, his findings were
in almost complete accord with
those of the water company's ex-
perts. The inventory work was done
in conjunction, he testified, but not
even conferences were held when
the appraisal was made.
Base Pay Price 80 Cents
Questioned by Ellis as to methods
employed in reaching the reproduce
ton valuation, Wenger testified
that he and his aids did consider
able investigating as to wage scales
and found the average Indianapolis
base price for common labor to be
30 cents an hour. This contrasts
with 35 cents an hour as computed
by the utility company experts.
Wenger said some rates.as low as
20 cents an hour were found and
that, through economies effected by
contracting companies and other
firms employing common labor,
many more skilled workmen were
working at that base rate.
The actual bupt intangible item of
"going value" received somewhat Of
a going over in Ellis questioning
of Wenger.
Going value, the engineer testi-
fed, is an inherent value in prop
erty which hardly can be tSti-
mated with exactitude. A general
definition. he said in response to
Ellis prompting, would be a COM
pleted property servicing consumers.
Estimate Is $1,000, 900
The water company's estimate of
its going value" is at least ST.
100000"
Land values again were gone in
to as w. E. Ransom, New York, the
water companys chief counsel,
cross-examined Wenger, after Ellis
completed the preliminary and re-
turned to the bench.
Wenger's appraisal of land values
included an estimate that because of
necessity in procuring land involved,
if necessary to repurchase, the water
company would be forced to pay
$971 ,561 more than actual value.
In arriving at appraisal of two
tracts of the company'S land con-
tanning, or necessary to, power
sites, Wenger said he took water
rights into consideration. Water
rights. involving overflowage, we're
figured at SIS to 500 an acre, he
testified.
Public Will Pay
These figures will cover expense
of the public service commission in
holding the hearing; cost of the
~appraisals made by its engineers;
cost of the water company'S own
appraisals and special auditS in
preparation for the trial.
Other items include attorneys
fees and other miscellaneous ex-
pense attendant to submission of
the voluminous data.
All these costs devolve upon the
water company, but with it being
charged to operating expense, the
burden ultimately must be borne by
the public, through upward revision
in rates.
Thursday was spent in a pains
taking attempt to tear down the
$S,71l,20S land appraisal prepared
for the utility by George T. WHEEL
den. Indianapolis realtor.
Whelden testified that in making
the appraisal, he had taken into
consideration prices which the vari-
Gus tracts of land would bring now
in the open market if purchased for
industrial business. and subdivision
purposes.
Principal item in his Appraisal
was 81. l66 1872 for the Central cana
right-of-way.
Boy, I, Loses His Life