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<br />~5:10
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<br />Theratesr on which this discount was based, were the rates established by
<br />" the P.S.C. report, slightly modified in 1920, with approval of p.S.C. engineers.
<br />~ This discount was therefore 25% of the proper and authorized rates. I
<br />
<br />~~l The City Council has never heretofore, so far as the records show, asked
<br />or apparently expected the water and light consumers to pay back any investment,
<br />and the Board has not c6nsidered that it owed any such amount to the City. If
<br />it had so considered, it would have charged the discounts above mentioned direct
<br />ly again~t the claim, and thus more than eliminated it. ~hen the ~ater Board fi st
<br />assumed management of the property in 1911, it assumed tne bonded debt of ~360,0 0
<br />and $741.08 in misc~llaneous bills, these being all of the obligations of the
<br />system as shown by the Council's report to the v.ater Board under date of April
<br />24, 1911, and the Council never has heretofore asked the Board to assume any thin
<br />further. In 1917 the matter of a possible claim or lIequityll was called to the
<br />Council's attention by the report of the t'ublic tiervice Commission, and, again,
<br />if the Council had any intention of asking for the payment of any such amount
<br />it certainly' would have done so at that time. At that time the members of the
<br />City administration of 1911 were living and in Gugene. These were the men who
<br />had full knowledge of the facts and of the intentions of the City Council and ,
<br />i certainly would have seen that a claim was presented if it h,_ad e,ver been their iI
<br />intention or understanding that it should be paid by the water and light consum-
<br />ers. The fact that they did not do so is strong evidence that their intention
<br />was otherwise. In the ordinary course of business any claim originating in 1911
<br />would have been outlawed many years ago, and we believe the Board is justified
<br />in believing that it was not indebted to the City for this amount. However,
<br />the Board will not stand on any such technicality, but wishes the claim settled
<br />strictly on its merits.
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<br />To SUlIlilla r i z e : 0
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<br />j It has been shown that the claim of ~+22,843.60{ -is not a just claim, and
<br />. it is therefore eliminated f~om consideration. 1t is a difference between two
<br />I appraisals, and represents the net worth of the water system in 191~. As such
<br />it is in nowise an equity of the City, but belongs in the net worth of the
<br />tater Department. Moreover, the Butte value has been fixed by Charter provision ,
<br />by vote of the people.
<br />
<br />From the Council's report of costs and obligations, made to the Board in I
<br />I 1911, it appears that the Council invested $48, 551.72 of its water plant
<br />I earnings and general funds in the water system and the electric power plant.
<br />(, In order to state correctly the City's investment at March 11, 1911, this, then,
<br />must be reduced by the depreciation chargeable on the water plant during the
<br />I period of the Council's operation of the properties in the years 1908, 1909,
<br />1910, and 1911, and further reduced by adjustment for excessive interest charges
<br />entered against the Walterville power plant construction account, leaving a
<br />balance which we estimate at not over $25,OOO.LO Against this, the ~ater Board
<br />presents the following items as claims being justly due under the rates and
<br />recommendations of the P.S. C. report of 1917;
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<br />I Fire Protection (52,919.20
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<br />!i Hydrant Rent lw163.75'
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<br />I Fire Reservoir Maintenance 13,981.62
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<br />II Discount to City, 1930-1936 65.107.13 1t
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<br />Amount Receivable on the basis
<br />of the P.S.C. report $133.171.70
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<br />For purposes of simplicity in this discussion, interest has been omitted
<br />from all claims. If interest is comDuted on all claims the dif'ference between
<br />the City's claims and the Board's wo;ld be increased.
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<br />The sums due the Board are as definite, positive, and justified as the
<br />"equitiesll claimed by the Council. Both arise from the same investigation.
<br />Both are authorized by the same agency and they must be considered together.
<br />If the Council wishes to adopt the report of t!1e Public Service Commission of
<br />Oregon, subject of course to the corrections noted herein, it must also adopt
<br />the recommendations as to rates. The Commission has clearly prescribed that I
<br />it is the duty of the Board to charge the Municipality for the service rendered,
<br />and it has stipulated the rates which are to be charged.
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<br />Dated August 24, 1936 Respectfully Submitted, EUJENE V!ATER BOARD,
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<br />By P. W. Brown, President
<br />By J. ~. McArthur, Seely.
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