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<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. 220.127.116.11 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
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<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
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<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 .
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