Evening star. [volume] (Washington, D.C.) 1854-1972, 1953-07-22
Sanitary Board
Rate Increases
Under Attack
Silver Spring Group
Coils Bookkeeping
Methods Too Costly
BY Gene Goodwin


for new bookkeeping method
adopted by the Washington
Suburban Sanitary Commission
spokesman for the Allied Civi,
Group of Silver Spring charged
today.
Heavy increases in rates fol
water, sewer and refuse collec'
ton and incinerator service an
nounced by the commission il
April were necessitated almoS
solely by complete reversal o.
long-Standing accounting pro-
cedures," the civic group main
tains.
That's the crux of the argu.
ment the Silver Spring organ.
ization made today at hearing
before the Maryland Public Ser
vice Commission in the Silver
Spring Armory.
To Decide ReaSOnabIeneSS.
AS the hearing opened Johr
H. HeSSey. chairman Of the Pub
lie Service Commission, told the
more than 100 persons in the
audience: This is not the or
binary case that somes before
this commission.
1--WE have no power to fix the
rates, no control over the man
agement of the Washington
Suburban Sanitary Commission,
he added. Our only duty is tt
determine whether these rates
are reasonable.
The Allied Civic Group anc
other citizens organizations il
nearby Maryland hoped to per-
suade the Public Service Com.
mission to reverse the sanitary
agency. If it does, it will be thu
first time in the 36-year-old his.
tory of the utility that it ha'
been overruled by the PSC. II
fact, today is the first time tina
the PSC has even held a hearing
on actions of the sanitary com
mission.
Charges Protested.
Today's hearing was granted
when the Allied Civic Group anc
other suburban Maryland or
CARNATIONS and individuals pro-
tested the drastic new charges
decreed by the commission be.
hind closed doors April 16. An.
nouncement of the increase!
came with virtually no warning
and without a public hearing.
Although the PSC received
scores of protest letters, it granted
the hearing on only the protes
from the Allied Civic Groul
because it was drawn up in lega
language and form.
The Allied Civic Group planned
to call several witnesses today
including it's president, Viii
lard A. Morris, and Stepher
Hotsko, a Government account
ant and a delegate to the Alliec
group from the Forest Grow
Citizens Association.
Attorneys H. R. and j. r
Miller of Silver Spring were tt
handle Allied'S case.
The lawyers, said before thu
hearing that Mr.. Hotsko hac
found through exhaustive re-
search of the commissions rec
ords that the agency had t.
raise new revenues to pay over
head costs formerly charged of
to construction.
Method Explained
Under new accounting method!
adopted by the commission after
studies by two New York con.
sulting firms, only 6 per cent Of
general overhead is now paic
from the construction fund
which is fed by long-term bono
issues, the lawyers said. In the
past, the commission charged
about go per cent of its general
overhead to construction which
meant that it was paid for from
taxes over 80, 40 and 50-yeal
periods through bond issues.
Mr.. Hotsko was prepared to
argue that it is unfair to sud-
denly switch this large financial
burden from a long-term to a
pay-as-you-go basis.
Were attacking the rate in
creases on the ground that they
were necessitated by a complete
reversal of accounting proce-
dures," the attorneys said. eve
do not feel that the new &C
counting methods are neces-
sarily good or proper"
That's our case" they added
"We're prepared to do or die on
that"
The sanitary commissioners
have argued that the financial
streamlining they instituted was
long overdue if the commission
ever was to eliminate what they
called deficit financing.
In order to get the agency out
Of the red and put it on a sound
financial basis, the commission
ers have said. it was necessary
to add a accent sewage charge
to the present q cents per 1,00C
gallons of water consumed, ano
to increase the Montgomery
County refuse collection rate
from $1.65 to $2.25 a month anC
the incinerator charge from s.
to 81 q ton.
The new sewage charge was
made retroactive to March l
The incinerator. increase wen'
into effect May 1. The new refuse
collection charges are to go intc
effect September /.