CHAPTER VII 

 THE SERVICE CHARGE 



It is a mistake to assume that water companies have but one thing to 

 sell, and that is water. They have two things to sell: one is water, and it 

 is easy to measure that; the other is security against fire, and it seems 

 to me that that should be paid for as willingly as any other form of security. 

 It should be paid for as willingly as a premium on an insurance policy. 

 F. N. Connet, Jour. N.E.W.W. Assn., Vol. XV, 1901, p. 428. 



The service charge is a charge for the privilege of having a 

 service, and does not include the use of any water. As com- 

 monly used, it is a device for separating some of the expenses of 

 maintaining the individual service which have nothing to do 

 with the delivery of water, and of keeping them separate, and of 

 charging them to each customer as a separate item in his bill. 

 Otherwise these expenses go into the general expense account 

 and must be distributed among the customers in some other and 

 less equitable manner. 



The service charge is an alternative for the minimum rate. 

 It is less generally used, but its use is increasing. It represents 

 a more logical and more just arrangement. Under the service 

 charge a specific amount is collected for the service and meter. 

 This amount is collected regardless of whether any water is 

 drawn or not. If water is drawn it is charged for, and the amount 

 charged for water is added to the amount of the service charge. 



The amount realized by the Water Works Department from 

 service charges forms a part of its income and the amount to 

 be raised by water sales is reduced by a corresponding amount. 



With the minimum rate this is true to a partial and ordi- 

 narily comparatively slight extent, namely, to the extent that the 

 amount collected for minimums exceeds the amount that would 

 otherwise be collected for the water quantities under the meter 



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