Diversion of the Water Works Surplus
Recently, in a middle western city certain civic associations suggested that the surplus of the water department, which amounted to quite a neat sum, be diverted to the uses of the general city government and commandeered to cover a deficit occurring in the administration of its affairs. This plan was successfully opposed by the city officials, who pointed out that while the surplus was large it was not by any means sufficiently so to meet the deficit and in order to do this it would be necessary to raise the water rates almost 100 per cent.
The stand of the city officials in this case was a wise and far-seeing one. There might, of course, arise an emergency, where it would be necessary to employ the surplus of the water department for other municipal purposes, but, in such a case, the money so used should be restored as soon as possible through general taxation.
The water rates of a municipality should be so regulated as to provide for all of the expenses of the water works, including interests on bonded indebtedness and depreciation, and also to insure at least a sufficient surplus to take care of all necessary repairs and additions in the water service which the growth of the community renders necessary. And this surplus should be strictly reserved for this special purpose and for no other. If other departments or the general municipal government require funds or accumulate a deficit, let these matters be taken care of through general taxation or by a bond issue. It is manifestly unjust to place such a burden upon the water consumers. Improvements and extensions of the water works and necessary repairs looking to better efficiency, are logical uses for the funds of the water department and should be defrayed from the moneys paid in by the consumers. The rates should be high enough to provide such funds, but to use them for other purposes than for the necessities of the water works is not? only extremely bad policy, but is also wrong in principle.