Evening star., 1953-11-08
DoubIeProb|errl
Crops Upin
Works Revision
Repayment Of Loan
And 10 Pct. Building
Slash Are Studied
By John w. Stepp

Top District officials will meet
this week to try to unravel at
least two major problems which
have cropped up in the latest
revision of the public works i'm
provement program.
OF particular concern is the
method by which Federal loans
totaling $28 million for city
water projects will be repaid.
Unless this is resolved other
wise, the already proposed in
crease in the water rates will
soar higher than the 1888 per
cent now contemplated.
Another aspect of the works
program-a 10 per cent reduc-
ton in the amount of general
conStruction-will be deliberated
by the Public Works Committee.
The job before this group of city
government officials is to deter
mine which building projects
will be cut out of the program
agreed to by the Commissioners
and the Federal Budget Bureau.
Agree on Costs.
The city heads and the bureau
reached accord on cutting the
overall program from 1892 mil
lion to $305 million. They also
agreed to spread the program
over a 10-year rather than eight
year period, raise District taxes
by $4.5 million annually and ask
Congress for $50 million in Fed
eral loans and like amount in
higher Federal payments toward
operating the city for the 10
year period beginning next
July l.
David v. Aud, director of Dis
trict Sanitary Engineering, in
cluding the water system, has
slated a meeting with General
Administrator Director Schuyler
Lowe early in the week.
1t was learned last night that
the problem confronting the Dis
trict is this:
The agreement between the
Budget Bureau and the Com
missioners calls for paying back
the proposed Federal loans at
an accelerated" rate That is,
only one year following actual
advance of each loan, repayment
would begin in whatever size in
stallmentS and interest rates pre-
scribed by Congress.
In addition to deciding on this
type Of amortization for new
loans needed to carry out the
program. it was decided that the
same rule would apply to the
$23 million in loans authorized
by Congress in 1850 to carry out
a long range water system con-
struction program. The works
program calls for adding another
SIS million water loans to the 1850
program.
Delayed to 1861.
AS now set up by the 1850
act. repayment of the water loan
does not have to begin until
1861. This period of grace was
allowed to ease the city's burden
of meeting this financial obliga-
ton in the immediate future
With the grace period removed
from the water program and
absent from the proposed loan
plan for other construction, some
municipal source fear that reve-
nues will be inadequate to meet
the principal and interest pay
mentS.
One way of meeting a de-
f1ciency in the water program
finances would be to increase
the water rates above the 25-
33 per cent increase now Spe-
CITED. Another would be to ar
range the water construction
schedule with such delicacy as
to conform with anticipated
revenues from year to year dur
ing the 10-year construction
period
A third would be to cut out
some of the water projects, a
step which officials dread almost
as much as raising the water
rates.
Poor Reaction Feared.
Water revenues in fiscal 1853
totaled about SIS million. City
budgeteers are afraid that any,
thing over the 33 per cent. or
SIT million, increase would likely
get poor reaction from the con-
sumerS.
Local taxpayers already face
paying higher taxes in other
categories to raise $45 million
over the 10-year period.
In the event of water rates
higher than 33 per cent, it is be-
lieved that consumers will find
small solace in the fact that
the presently proposed sewer
service charge-equal to so per
cent of the Individual water bills
would probably be reduced.
Commissioner Samuel Spencer
at the weekly Commissioners
Report" over Radio Station
WWDC last night expressed con-
fidence that the public will sup
port the tax increase program
as it now stands. The main
reason for this is that the pro-
posed tax boost would affect
miscellaneous" sources rather
than the real estate, income,
sales and business property taxes.
Mr.. Spencer was asked what
he thought of the proposal that
the Federal payment to the Dis
trict be raised by 50 million an
nually.
"I would like to see it some
what higher" he said. But If
we get the increase plus full
water charges and the sanitary
sewer charge it will be great
step forward. We will not be
in too bad shape"
n. TI:nehU - CnooL