Mr. BATES. What do they pay?

Mr. AULD. $50 for 1,000,000 gallons.

Mr. BATES. Do you think they will build a reservoir of their own? Mr. AULD. They have, of course, a filtered water reservoir. That they have, and the tanks and the pumps, and a complete distribution system. Mr. BATES. What percentage of your present distribution of water do you think it is? I think you gave a figure of something like 30,000,000,000 gallons. What percent of that does Arlington County take?

Mr. AULD. In the fiscal year 1946, out of a total water production of 56,459,000,000 gallons, Arlington County got 2,728,000,000. That is a relatively small percentage.

Mr. BATES. So you think the $50 is really a sufficient charge?
Mr. AULD. Yes, sir; we do.

Mr. BATES. For Arlington. You have given that very serious consideration?

Mr. AULD. The actual cost of producing that water is about $18 per 1,000,000 gallons.

Mr. BATES. Now, when you talk about producing water, what do you include in the cost?

Mr. AULD. That is not plant or depreciation or amortization.
Mr. BATES. Just maintenance; is it not?

Mr. AULD. That is right.

Mr. BATES. But here you have built these present reservoirs at a cost of probably many millions of dollars over a period of years since 1853, when we started, and do you not think that should be some part of the consideration in the question of the price of water that you give to the consumers?

Mr. AULD. It has been considered in the price to Arlington County. Mr. BATES. In other words, you think the difference between $18 and $50 is part of the capital investment?

Mr. Auld. Yes. There was a rational figure worked out on the basis of the proportion of the total plant devoted to that service.

Mr. BATES. IS Arlington County apt to grow in any substantial measure within the next 50 years that will require part of your new development to take care of its needs in any substantial way?

Mr. AULD. It is difficult to show a precise ratio by water, but I think I can do it by population, which would be very close to the same. We estimate the average day's consumption in 1980 to be 217,000,000 gallons. Of this, Arlington would use an estimated 38,000,000 gallons, or 1712 percent.

Mr. BATES. Well, that is really not an important question, Mr. Chairman. That will do.

Senator CAIN. You may proceed.

Mr. AULD. I would like to emphasize that the bill you have under consideration is purely enabling in character and does not constitute a blank check. The loans in the successive years would be specifically authorized by the Congress after proper justification annually.

What we ask places no undue burden on any interest. It simply distributes the cost of an essential service in the proportion to which that

service is used. We suggest no rate increase at this time. The effect of this bill will be to permit a continuation and expansion of water service as needs require on a financially independent and self-supporting basis.

Mr. BATES. Are you through?

Mr. AULD. I am through with my statement.

Senator CAIN. Does that complete your testimony, Mr. Auld?

Mr. AULD. Yes, sir. I could go on for some time on the detailed features of the bill, if you care to go into it now.

Senator CAIN. Well, I should think not at this time. We might very well think it proper to call you back at a time when we are talking about that bill precisely.

Mr. SMITH. I would like to ask one question.

Senator CAIN. Mr. Smith.

Mr. SMITH. Have you any figures, comparative figures, that will show how the rates of this city to the consumer compare with the rates of cities under similar conditions?

Mr. AULD. Yes, sir; I have.

Mr. SMITH. Will you let us have those?

Mr. AULD. Water rates, I might say, are deceptive things to discuss, because you have to assume a given quantity or rate of use over some stated period in order to establish a comparison.

Because they usually go up or go down in unit cost, as the volume goes up.

But, in 1937, a board of survey compared our rates with those of the other cities. Across all of the rates of consumption, they found that we rested between the average of 40 American cities and the lowest of 40 American cities.

This curve will show it. The heavy line is our rate in contrast with an average.

Senator CAIN. I have a question that has just come to mind.

You were not the one, but somebody heretofore was to have provided information about compensating services. You were interested in having the Government now pay for the water it is using.

Mr. AULD. Yes, sir.

Senator CAIN. But we will become increasingly interested in what compensating services are given free of charge by the Federal Government to the District.

Mr. AULD. I would like to have an opportunity to put that in at a later time, if I may.

Senator CAIN. We would very much appreciate it.

Mr. BATES. I think we ought to make it clear, as basic information, as to how the original reservoir system and the main lines were constructed; that way back, say, in 1853, the United States Engineers did it.

Did the Federal Government build your old original reservoir?
Mr. AULD. Yes, sir.

Mr. BATES. And paid for it all out of Federal funds; and then down through the years up to what time and what year did the District government come in and assume part of what we would call a capital

outlay in the expansion of that reservoir or perhaps the mains running into the District?

When did we first step into it as a community?

Mr. AULD. We came into it certainly quite legally in 1882.

Then we had the legal authority to distribute water.

Up to that time, I think the Federal Government paid practically all the costs of the system.

Mr. BATES. And charged the rates to the users? How did the Federal Government get reimbursed?

Mr. AULD. The Federal Government did not get direct reimbursement. The water fund was then in existence. The revenue from local users went into that fund, and that was employed for further extensions of the system, so I am evidently mistaken about 1882.

Mr. BATES. Now, you say about one-third of our entire distribution is free-112 billion gallons?

Mr. AULD. Yes, sir.

Mr. BATES. That is, free to the Federal Government and the District government and private and religious institutions? Municipal, Federal, and religious, shall we say?

Mr. AULD. They are religious and charitable, both.

Mr. BATES. Charitable also comes in?

Mr. AULD. Yes, sir.

Senator CAIN. What percentage of the 11,500,000,000 would you be presently giving to the religious and charitable institutions? Mr. AULD. The value of that was very small last year.

Mr. BATES. What part to the Federal Government?

Mr. AULD. The Federal Government received in the 1946 fiscal year 8,508,000,000 gallons.

The District government received 2,718,000,000.

And the free church and charitable water was 139,994,932 gallons. Mr. BATES. How did you arrive at the estimate of 8,500,000,000 for the Federal Government when we have no meter system in the buildings? How do you gage it or determine the supply going into these buildings?

Mr. AULD. The older institutions have meters. I think there are between seven and eight hundred meters in the Federal buildings in the District.

Mr. BATES. What purpose do they serve?

Mr. AULD. For the very purpose of ascertaining the quantity of water used.

Senator CAIN. That you are giving away.

Mr. AULD. The metering of Federal consumption is carried out by the Washington aqueduct, and is authorized annually in the appropriation bill-each year.

Mr. BATES. Well, you say about 8 or 10 percent is metered; is that the figure you gave?

Mr. AULD. NO. The metered consumption is reported here to be 8,362,000,000, and the estimated at only 145,000,000.

Mr. BATES. Well, now, do I understand by that that of the total of 8,500,000,000 going into the Federal buildings, that is practically all metered so that you know it is going in there?

Mr. AULD. That is my understanding.

Senator CAIN. You do not have domestic consumer meters; do you?
Mr. AULD. Yes; we are 93 percent metered at this time.
Senator CAIN. That is fine.

Mr. AULD. Our objective, of course, is to get 100 percent as fast as
That accounts, by the way, for part of our expected deficit

we can.

in 1948.

Senator CAIN. Can you actually, physically, get the meters now? Mr. AULD. The meters are becoming available again, but at a price. Back in 1937, they cost about one-third of what they do now. Senator CAIN. You are, therefore, willing to wait for a reasonable length of time for a falling off in that price?

Mr. AULD. We feel, actually, that the income which will result from the metering is such as to justify even the increased price.

Senator CAIN. Buying them at this time, if you can get them? Mr. AULD. That is right. We had to get along without them during the war, because we did not believe suitable meters were available. Most of them had cast-iron bodies, and we feel that is not a long-life meter. Now that the bronze bodies are available, we are going back and putting them in as the funds permit.

I might say that this construction program's estimated costs include the metering throughout the District.

Mr. BATES. To follow up my question again: The Government has taken over some private properties formerly in what we call the tax class. They were assessed locally and they did not use them for public purposes, and then leased them out.

Let us take Cosmos Club as an illustration. The Government rents that building now, as I understand it, to private individuals who continue the club as is. They use water, of course.

You have a meter in that building. Do you charge them for water, and whom do you charge?

Mr. AULD. I cannot tell you, sir, on the Cosmos Club.

Mr. BATES. It seems to me to be a very important matter.

Mr. AULD. I know a great many such situations have developed during the war, and it is customary when a privately owned building goes under Government jurisdiction to put that on the free list and pick up that consumption as part of the free Government water.

Mr. BATES. In other words, here we have a situation of the Federal Government taking over a large business block and leasing it out to private individuals for whatever purpose they may use it for, and I do not know whether they can or not, but if they can, they will, and whatever revenue you got from the water in the past, it being tax property, you are losing that also?

Mr. AULD. Precisely.

Mr. BATES. So the new tenants are the same tenants that were there prior to the Government condemning the property and they are now getting free water at probably lower rentals?

Mr. AULD. I dare say the tenant pays just about what he always did, but maybe the Government makes the profit.

Mr. BATES. I am talking about the tenant in the sense of the lessee. Mr. AULD. Yes, sir.

Senator CAIN. If he is paying in rent what he was before, he is still benefiting from no price for his water, because that would be a separate bill that was just canceled out at the time he became a private operator having a Federal building.

Mr. BATES. I think, myself, you ought to immediately send them a bill. Let us contest it in the court. I do not think the court would ever sustain the Federal Government in the misuse of property they condemned, and expect the District to supply them free services in the form of free water.

I do not know what the law is on that matter, but it certainly should be looked into and looked into quickly.

Senator CAIN. Mr. Bates, in that connection I should like to ask Mr. Auld a question.

What thinking have you given to this problem as you have set one meter after another from a private to a public use over the last few years? Have you in any sense resisted that? Have you had any conversations with responsible agents within the Federal Government?

Mr. AULD. There has never been any clear-cut opportunity before now to bring that question forward. I think because it is broader than taking it in specific cases.

Senator CAIN. Yes.

Mr. AULD. I feel here we are asking for a broad authority and there is a way to cure that evil if it exists.

Mr. BATES. Yes; but there is a great principle involved in the question I raised here. First of all, Federal condemnation of private property for public use.

Mr. AULD. Yes, sir.

Mr. BATES. And then the property is not used for public purposes but rented out to private individuals.

Mr. AULD. Yes, sir.

Mr. BATES. I have serious doubt, although I am not conversant with the law in that regard.

Here you have not only property that was available, but you are giving them free water, to boot, in addition to losing the taxes.

Mr. AULD. I think one such case has been submitted to the corporation counsel for study of the law.

Mr. BATES. I have a list of those projects that Mr. Dent gave me, and I intend to give it some attention myself to find out what the facts are.

Senator MCGRATH. If the Federal Government were going to pay for its water, would you treat the Federal Government as a single customer for its total use or would you bill the Government for the separate buildings?

Mr. AULD. The method we suggest is that the total Federal usage be reported in the Commissioner's estimates each year and that as part of the appropriations act that a sum corresponding to the value of that Federal use be appropriated to the water fund and be credited to that fund on the first day of the fiscal year in that appropriation. I suggest that we would calculate the bill as though each establishment were a separate establishment.