HomeMy WebLinkAbout1973 12-27 Water Sales Profit of 6% Criticized as "Not Right" DISPATCH Water Sales Profit
Of 6% Criticized
As 'Not Riaht'
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St. Paul's water u flay The issue was last dis
makes a six- per cent cussed between the sub-
profit selling water urban officials and the
wholesale t o suburbs, water board at a meet-
Maplewood and Rose- ing last Thursday after-
ville officials say. noon. -
And they -insist that's Maplewood Mayor Les
not.ethically right. Axdahl, in commenting
A public utility, they on the discussion at a
argue, is unlike a pri- village council meeting
vate utility with stock- Thursday night, said:
holders who make an in- "There seems to be a
vestment and expect a difference of opinion on
profit. the (water) board over
Representatives o f whether or not they are
Maplewood and Rose- a profit-making organi-
vile have tried to make zation."
their case in meetings He said the board
with the water commis- agreed to meet as a
sinners and also in a re- committee of the whole
cent letter. "to discuss that particu-
Roseville presently lar concept. The corn-
buys water wholesale mittee also will consider
from St.Paul. rate revisions for 1975.
Maplewood has a plan The mayor said he
to establish its own wa- was encouraged by the
ter utility, but with St. position of at least one
Paul providing the wa- water board co m m i s-
ter, presumably at the sioner, Mrs. Rosalie But-
same•wholesale- rate of- ler.
fered Roseville. " He reported Mrs. But:
"We believe that ler as favoring "cooper-
six per cent is clearly a ation"' with the suburbs
profit and is an improp- • in having St. Paul pro-
er application of all the vide water at "reason-
principles involved in a able rates" to the sub-
joint operation between urbs as an -alternative
the municipal agencies preferable to the forma
and-or the people living tion of a metro area wa-
within these communi- ter board.
ties." the suburban offi- Don Lais, M a p 1 e-
cials said in a letter to 'wood's village attorney,
the St. Paul water com- suggested that the
missioners. growth potential of St.
Paul's water utility was
in the suburbs.
Presently;' he pointed
out, over $1 million or 20
per cent of- the utility's
annual revenue comes
from the suburbs.
They told of no objec-
tion to a wholesale rate
based on production
costs,plus depreciation.
But they draw the line
'When water department
manager -Clift Hamblin
calls for, a six, per cent
return on the water utili-
ty investment of
$33.390,000.
They go on to suggest: -
"If the water depart-
ment is to collect a fee
which will•give it a (six
per cent) rate of return
on the facilities neces-
sary to produce the wa-
ter or at least the
wholesale supply — then
it is getting•into being a
private utility."
And if that's the case.
St. Paul's utility should
he subject to all the
r u IP s and regulations
and liabilities or a pri-
vate-utility, they add. in-
chiding the payment of
income tax on the profit
-gid real estate and per-
;nal property taxes.