PRIVATE OR MUNICIPAL OWNERSHIP OF WATERWORKS
Shall the city own their waterworks, or can it be operated more safely and economically by a private company? That is a question often asked by the people, especially in the smaller cities. The growing sentiment for cities to own and operate their semi-public utilities, such as waterworks, gas, electric light and street railways, has caused many to enter upon their administration without a thought as to the economy or advisability of such management. It is well known that in many cities their operation is sought for. and largely controled for the benefit of politicians, without regard to the cost to the public. When a waterworks is operated by a company, it is on the same basis as that of any other business, and is expected to return for its investment a reasonable per cent, on i’s cost. When operated by the city, it is supposed to yield a proper return to pay interest on bonds, provide for depreciation and repairs and a fund for future extensions and payment of bonds, allowing the net profits to the citizens in the way of reduced rates for water. In a large number of cities the payment for water used in public buildings for fire protection, parks and sewer flushing to the water department is not recognised, and the consumer pays a sufficient rate for his water to meet all these added expenses. If cities should pay into the water department a proper amount for fire protection, based on the number of hydrants, and for all water used in public buildings, parks, fountains and sewerflushing, then this department would be operated on the same basis as a plant owned by a company, less net profit; if the management could be as conservatively and economically carried on as by a company, then the people would receive water at first cost and save the net profit. In a table prepared by Mr. Dow R. Gwinn, of Terre Haute, Ind., of 122 cities, eighty-two of which have municipal ownership, and forty private ownership, the following rates are shown. The average rate charged by municipal plants for domestic use in a house of six rooms is $5.98 per annum; by private ownership, $6.72—showing seventy-four cents on each in favor of municipal works. The average for a six-room house, with closet, bath, washstand and thirty-foot lawn is, as follows: Municipal works, $16.75, private, $20.84—showing an average difference in favor of the municipal works of $4.09 per service per year. This, with all other conditions being equal, would show the net profit to the private company. This is not taking into account the fact that a larger proportion of those works which furnish filtered water are of private ownership, and the cost to deliver good water is, therefore, greater than many of the larger works that ’pump direct from rivers or lakes. Therefore, the actual difference in the value of water is much less. We must also consider that private works must base their rates, so that the revenue will meet interest on the cost of construction, maintenance, repairs and a sinking fund for payment of bonds, while many municipal works, in the assessment of rates, make no provision for interest on cost, or a reserve for payment of bonds depending on a general tax for these items, if the revenue from the consumer should be insufficient after paying maintenance and repairs. There is no. doubt that, with the many advantages enjoyed by a municipal works, such as lower rate of interest on bonds, exemption from taxes, and, in some cities, a frontage-tax on unimproved property, with equally careful and economical management under experienced employes, they can supply water at a lower rate than a private company. But, with municipal works under a political management, where the employes are chosen because of their political influence and subject to change with every new city administration, where faithful and experienced men give way to ward politicians or favorites, without regard to fitness, it is no wonder that public ownership of water and electric light as well as any other public utility may become an expensive burden to the tax payer, and the property rapidly depreciate in value, lu justice to municipal water departments, every city should cause to be paid into such departments a fair return for the water furnished for fire protection based on the number of hydrants in service, for all water used in public schools and buildings, parks, fountains, sewer-flushing, street sprinkling and all public uses, then the water department would have credit for the service rendered, and the management would know how to apportion the rates to the private consumers, so as to secure an adequate return for the investment in the plant. It is not just for the private consumer to pay an assessed rate sufficient to supply the city with water for the above named purposes; they should be paid for in a general tax by the city, the same as though the works were owned by private parties. We find in Prof. Edward W. Bemis’s works entitled “Municipal Monopolies,” that in the year 1800 there were in the United States but one public waterworks and fifteen private, and up to 1850 there were only thirtythree public and fifty private. In 1865 there were sixty-eight public and ninety-four private, and in 1880, 293 public and 305 private, and not until 1890 to 1896 did the number of publicwaterworks exceed the number of private plants. The increase in those six years was from 1,878 to 3,196 waterworks plants, of which in 1896 1,690 were public and 1,489 ot private ownership,—52.9 per cent, being public ownership. The following table shows the number and ownership of waterworks in several of the Central States in 1897:
The per-cent, of public works runs from Nevada, which has none, to Nebraska, which has 87.9 per cent. The changes from private ownership to public in 100 years shows that 205 private works have passed to public ownership, and that twenty public works have passed to private ownership. Of the fifty largest cities in the United States, forty-one have public ownership, nineteen of which have changed from private to public ownership.
At Hillsboro, Tex., a destructive fire gutted four business houses, consuming the stock of three, and badly damaging that of the fourth.