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<br />""'-504 <br /> . <br />- --- - -< .---- --_.~- -- --_. . ~ ~_o__ - --- ~ -- -- -- - --- ~- -- <br /> -- -,- - ~ - ,-. ---- - <br /> against the Board. Voluminous material has been examined and at this <br /> time the work has not been completed. However, we present such facts I <br />',", as we have found and if desirable the search can be continued. <br />~- The Board is approaching this matter with an open mind and a de- <br /> sire to do what is fair to all parties concerned. It desires to have <br />A L all doubts resolved, and all questions settled, and to arrive at an <br /> equitable and just arrangement, satisfactory to all parties concerned. <br />\ The Board will approve se~tlement by the utilities of any just and <br /> legal debts. The Board, in other words, wants to pay anything it truly <br /> owes. <br /> It must be remembered that the Board and the City Council represent <br /> different groups. It has occasionally been said that payment of sums <br /> from one body to the other is merely like taking money out of one pock- <br /> et and putting it into another. The Water Board, however, represents <br /> the consumers of water and electric current while the Council repre- <br /> I sents, officially, the taxpayers of the city. While in a large part these . <br /> two groups coincide, yet there are two groups with different interests, <br /> and their respective interests must be definitely kept in mind in any <br /> discussion of the relations between the Council and the rater Board. <br /> The claim which the Council has presented to the Water Board con- <br /> sists of two items: <br /> 1. $22,843.67. and interest <br /> 2. and interest <br /> 1 $80.814.65 total and interest <br /> These two items arise from different transactions and out of different <br /> circumstances and must therefore be discussed independently of each other. <br /> II Prior to 1914, the Water Board found that, of the $140,000.00 worth of <br /> I property purchased and turned over to them, by the Council, about $104,700.00 <br /> of it was non-operating and a burden on the water system, leaving a value of <br />'I $35,300.00 for the operati~g property. This non-operating property consisted I <br /> of Skinner Butte and some $11,359.55 worth of useless equipment. Because of <br /> this excessive burden it was found impossible to operate the water department <br /> on any fair and reasonable rate basis. The Board announced that it would <br /> either have to sell the non-operating property or lease it in order to secure <br /> revenue sufficient to carry out its program. Rather than have this occur the <br /> II various interested bodies of the city determined that it should be removed <br /> from the ownership and custody of the Water Board and preserved as a public <br /> Ii park. After discussion and conferences between the Council and the Board, <br /> ,I the Board accepted the ~11,359.55 burden, and a compromise value of $46,659.5 <br /> I was reached for the value of the operating portion of the water property. De <br /> I <br /> ~ucting this amount from the purchase price of the entire water property left <br /> $93,3'40.45 as the value of' Skinner Butte. This matter was referred to the <br /> I voters and by vote of the people in April, 1914 the property was sold back to <br /> II the city for that price, the city assuming bonds in that amount in payment <br /> therefor. <br /> II The claim of $22,843.67 arises out of an appraisal of the property <br /> I <br /> made by representatives of the Public Service Commission as of June 30, . <br /> 1916. These representatives appraised the property as it then stood, <br /> j setting their own values and disregarding actual costs. As will be seen by <br /> study of the last paragraph on page 14 of their report, after establishing <br /> their values for the entire Water Department property at a net figure, after <br /> depreciation, of $245,651.00 they deducted therefrom the total indebtedness <br /> against the property which was $222,897.33, leaving a net surplus ~ater <br /> Plant value of $22,843.67. They then proceeded on page 21 to assert that <br /> ! the City had "clearly established an equity in the water system" in that <br /> amount, disregarding the fact nevertheless shown by their report, that all <br /> of that difference arose from five years of construction work done by the <br /> ~ater Board since it took over the properties on March 11, 1911. <br /> The claims recently presented to the 1[iater Board are thus based on a <br /> 1916 appraisal surplus, ignoring the fact that the properties of the ~ater <br /> Utility were turned over to the ~ater Board on March 11, 1911, and that any I <br /> adjustments or liabilities which may exist must relate to March 11, 1911, <br /> and not to June 30, 1916. The Commission's engineers did, however, also <br /> make a retrospective appraisal as of March 11, 1911, and on pages 15 and 16 <br /> I of the report it is shown that the value of the properties on that date was <br /> I' $182, 908.66. <br /> The debt assumed therefor by the Eugene ~ater Board was $200,000.00, <br /> I leaving a deficit on an appraised basis on March 11, 1911, of $17,091.34. <br /> It is therefore clear that instead of the vity having a claim of <br /> " <br /> , <br /> $22,843.67 against the Water Board, the ~ater Board has a claim of <br /> $17,091.34 against the City by reason of the Commission's findings, if . <br /> I <br />~~..., -' <br />