The Waterbury Democrat., 1941-07-10
Fixed Charge Proposed In Report
 On New Schedule Of Water Rates

of rendering services to individual consumers.
 4. A service charge in direct pro- portion to the cost of being pre- pared to furnished water to an in- dividual consumer should be made.
 5. Interest on investment, and depreciation charges included in water rates should be adequate to pay interest on bonds and make all necessary replacements to keep the original investment intact.
 Self-Sustaining Basis:
 A business financed by private capital, must, over an extended period of time, provide adequate earnings or hold definite promises of providing earnings in the near future to pay all operating expenses and give the enterpriser fair re- turn on his investment. Included in the operating expenses should be provision for depreciation sufficient to keep the original investment in- tact. Unless the earnings of a pri- vate enterprise are sufficient to pay for all expenses and provide fair return on the invested capital, 1t will be soon bankrupt.
 Just as under private ownership. @ government owned utility should be capable of standing on Its own feet and operating out of the rev. enue derived from its operation. The income should be sufficient to cover operating expenses, depreciation, and an interest rate on the investment sufficient to provide for plant ex- pansion and upkeep. It is therefore necessary that the rates charged for services of the Utility should be governed by the cost of operating the plant,
 Present Methods of Financing
 An objectionable feature of the present method of financing the Water Department is the irequitable practice of charging all consumers, regardless of the cost of furnishing water to them, one flat date. Such a system has no relationship to the consumers, and results in a smaller total consumption, which in turn results in increaseC rates or all con- sumers, both large and small.
 In order to put the Waterbury water system on e self-sustaining basis two possible procedures are open:
 l. Water rates must be substan- tially increased. ,.,....,~.
 ?. Water consumption must be increased.
 Under the first procedure, that of increasing the water rates, the ef- feet would be to discourage the use of @ larger amount of water. The sinking of artesian wells by larger consumers would be encouraged, thus resulting in a lower total. con sumption of city water, which would in turn require further water rate increases.
 The present cost of water, to many consumers, is so high that they are finding 1t moree conomi- cal to provide water from private sources. This condition will con- tinue, unless city water is furnished at a rate more nearly comparable to the cost of water from other sources. The practice has already reached the point where 1t has constituted a problem of great con- cern to the city. Unless something is done to alleviate the condition, the burden of maintaining the water system must eventually fall more heavily upon the small home owner or the general property tax payer.
 The answer to the situation lies In the second alternative given, that of increasing water consumption Any substantial increase of this type must come from the larger con- Sumers who are at present drawing hugh amounts from other sourses. Tn other words, large consumers must be given some incentive to use city water rather than drilling wells or going to other sources for their water.
 Charges for Services
 Three fundamental factors should be considered in ascertaining the rates to be charged individual wa- WI AACy aACs
 l. The quantity of water con- stunned.
 2. The cost of being ready to serve the customers.
 3. The direct customer cost.
 The quantity of water consumed has a direct bearing upon the cost of furnishing water to a consumer. Waterbury has plentiful supply | of water and could furnish 6 larg- | er demand than exists at present. | If the demand for water were to | Increase, the cost of furnishing the water would increase only slightly, | f ct all. Tn other words, the more | water that is consumed, the lower will be the unit cost Of furnishing Ehe water to the consumer.
 Tn the ease of individual custo- meFs, the same principle governs. lust as increased total consumption Tor the entire city will decrease unit costs 70 the water consumers, 70 too increased consumption by afl individual customer decreases the sost per unit to the city Of furnish. ng water 70 that customer. It ls obviously much laas expensive For Ihe city Co furnish 100000 gallons lf water t0 one customer than lt s to furnish i0.Ooo gallons to each lf ten customers. And, since t ls lnly equitable that q customer pay \ l0r aeFviee on the basis Of cost 10 ihe city of rendering such service, V