The Water Company and the Council

The Water Company and the Council

The question of the proper compensation of a private water company for its service is very often the subject of a controversy and sometimes the company is treated unjustly by the council of the city or town which it supplies with water. When the company asks for the privilege of raising its rates, in order to pay its expenses, ever increasing, more often than otherwise, the cry is raised that the corporation is exercising extortion, that its rates are exhorbitant, and that no increase should be granted. One of these cases came to light recently in a small town in Ohio. The water company petitioned for the privilege of putting in force a new schedule of rates. Before the vote was taken the president of the water company appeared before the members and testified that the monthly expenses of the company were over $1,300. and the monthly income only a little over $400, leaving over $800 deficit. He read a list of towns in which a higher rate was paid by consumers than the one his company asked the right to charge, this being 35 cents per 1,000 gallons, and a minimum charge of one dollar per month. The council, by a unanimous vote, denied the cotnpanys’ application. This is one of those shortsighted cases that, unfortunately, too often occur. The stockholders of this water company have put their money in the enterprise in good faith, with the understanding that they would have a fair return for the capital invested. It is unjust that they should lose all. and the small raise asked bv the company— ten cents per thousand gallons—should have been granted. The members of the council must know that the expenses of supplying water have increased far over one hundred per cent in the past three years, and when so plainly shown the necessity for it, there should have been no hesitation in granting the increase. Legislatures are too often prone to be swayed by fear of loss of popularity in making their decisions, and too seldom are willing to take a stand that speaks for justice and the needs of the community. The words of the president of the water company just referred to. after the vote denying the raise had been taken, were significant: “We are not going to borrow any more to pay operating expenses. We are getting 25 cents a thousand gallons and will have to give a 25-cent service. I don’t know how long the machinery out at the plant will last. If you people want the plant give us what we have in it and you can have it. If it goes into the hands of a receiver again a man cannot be found who will give a dollar for it. It means something to your town to have fire protection. If you do not have it you know what will happen to insurance rates.”

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