TRAMWAY FINANCE

Dominion, Volume 5, Issue 1455, 1 June 1912, Page 6

TRAMWAY FINANCE

Z ■ COUNCIL ANXIOUS. OF £ 20,000 NEEDEDTHE'DECREASING REVENUE. ■■■ WHAT IS TIIE CAUSE? -Tlio precarious condition of Hie tram ■ W»ys finances, especially with regm-d ti tfil expenditure of tho depreciation fund luil that necessity for providing such ( ■ Fund for tlio future, was discussed at soim •length by the City Council lost night. 7; The System's Needs. ■ -.The Tramway Board had .submitted Hit lollowing'report in response to C'oiincilloi liKKenzies mohou calling for some sucl statement:— '~ . ; . «'At your request the Tramway Boarc of has prepared the 'following table giving the capital value and rate . of,,depreciation to bo set aside annuallj ■ for renewals of each of the. more important parts of the system:— :'Z Annual ami. ."; ' to be set - "■■ Capita! ■ aside for ■' ■'£ Expended. Life. Renewals. *•> £ Tears. £ Machinery and :• Jilant 76,000 25-30 2.250 ' Kolling stock ... 93,000 15 4,050 ■ Permanent way 100,000 12-15 C,SOU Poles, etc., of . ■,-.. overhead -equipment ... 12,000 20 COO ■ Feeders 43,000 30 645 *■■ Total ;.... .£324,000 ' j;ii,G7s "It will"be noticed from the nlwro that ■ th« whole of the materials may require renewed before the expiration of the periods (luring which the loans havo cur■raicy. The i per cent, sinking fund in- ;•• vested at 4 per cent, with accrued interest provides for tho wiping off of the debt in about 12 years, and if the life of each part of the system could be extended to ;■ 42 year,s without expenditure other than ," ordinary maintenance, no provision in addition.'.to.'tho. 1 .per cent, sinking, fund ■'. -Kouldrrequire to be made, and at the termination of this' period the undertaking being free of debt, money could be borrowed for any renewals necessary. . "It,is hot considered necessary to make ' any. provision, for renewals of buildings, .. as the'llife.of the buildings should be considerably greater than the period during :.which the loans have currency; In estimating the .'percentage , required for renewals, consideration is given to scrap value!.after termination of life. "As all minor renewals are at present charged to miiintenance, the board is of opinion that if tho present system of charging such minor renewals is continued ■ (which' wp-strougly recommend);-a sum■ of XSOOO'set' aside annually will be sufficient to meet expenditure on renewals without undue stress on tho finance of any one particular year. With this object in view we recommend that renewal of any part ' not exceeding jC2SO in value should bo charged to maintenance." ■ . : where the Fund Went. ' The 'following' information as'to the expenditure of the. depreciation fund up till March 31, 1912, wasalso Supplied by tho board:— Electric cars ■ 30.5" Other rolling-stock 1,288 Electrical equipment of lines 2,911 Additions to power-station ;........ 25,778 Now buildings. '. 15,391 Land purchases' ■...'......................... 11,826 Extensions-; or .-track '..-.': 0,333 Extensions 'of power: supply ..'........ 1,791 Workshop ■ tools and machinery ... 561 point-controllers ........... 570 Catj-buikfing'.workshop and; plant 1,202 Office furniture '.'..'. ......'....' 145 Purchase (part) Mirnmar lines . .within City Boundary 4,212' •;' • wr,,G2O ■ . > '£'■'■■ Contributions from deprp-?; - . ciation. 'fund " :.:.'.:....'.'.;.'.:'.. 87.5G0 • Contributions from revenue • 18,000 :; •■■■■■ 105,G20 105,620 Estimates. The following were 'the estimates submitted for tho year 1912-13:— ■ ■.-. -.-■.. Tram- Power Revenue Account. ways. Supply. Total. IJ "* * . - , ■ .... ■ . Jβ. ■. £ j> Revenue • 111.500 10,000 151,500 Wadestown rates. 2,200 — 2,200 ' JTo'tal income..: 113,700 .10,000 .153,700 Working expenses 101,100 4,400 109,400 Interest 20,0.15 2,390 22,431 Sinking fund ... 4,701 591 5,335 depreciation .... 14,026 . 1,620 15,052 ■ Net surplifs ....... ' 445 ; 987 14,432 ■ ..-, . .... 113,700 10,000 153,700 > The board.submitted also the following schedule of proposed works strongly recommended as necessary.—: . - ■ Proposed Comniit- ' i ■■ , ... Works, -me-nts. £ £ 'Amiiinl payment to Mira- . mar — j> ,,33 Sinking fund horse tramways ' : — 500 Shelter .sh'ed--at Conrtenay Place • 150 - (Extension of waiting shed : at. G. P.O. 300 — T-xtension of Newtown car ■shed-' ■.:.:..' :............... 0,000 - iDuDlfcation of track, Upper ' Willis-Street 3,000 - jjlotor tower wagon 652 — 'Construction of 8 cars G-,731 — Extension of power supply sys'tem :.... '. 1,000 — Publication-of track, Brooklyn lino (Seajar's Loop to T !(im Street) -.:..: ...:. 1,500 — Alterations at Thotndon . office 300 - Kew'pconoim'sor and spares, power station 1.750 — New .boiler and accessories, power-station 4,300 — •'. ;; • 25,716 1,553 This expenditure, it was pointed out, would result in a jdeWt balanco on the year's operations of .£20,000. i -That £5000 a Year Be Set Aside. Wjth this information before them the ; committee submitted the following recommriulations: — / . Thnt they havo given further considera--tion to the Tramway Board's report regarding; tho tramways depreciation fund (Councillor Jf'Kenzie's motion), and have to recommend as follows: — 1. That an amount of .£SOOO per annum ■be set aside permanently from the depreciation fund in accordance with the re- J isolution passed by tho council on October 2. 1911."' ' i i 2. That last year's instalment of .£SOOO (•and the similar instalment for tho cur-1 ITent year be handed over to the sinking 'fund commissioners to -invest to the best :advantage for a term not exceeding five '^years. 1 3. That interest bo not charged on tho :l),i'iiucp of thn (lepiwi'ilioii fund. The committee further recommended that, all .the appropriations suggested be .approved, and the works authorised; and that tho money be obtained by overdraft. ' ' • A Sufficient Sum. Tho .Mayor reviewed the reasons which ■had led the committee to come to tho .conclusions' set out in the recommendations. They had to recognise that whilst there had been an increase in the revenue of our tramway seryicp, there had been an increase in expenditure in greater ratio. Last year the increase of expenditure amounted to .£7883, and the increase in revenue was ,£SOOI, which made a balnnre of .£2802 of expenditure over income. This did not mean that.the management was faulty, because councillors'had always known that, as the service grew, some of the works would show greater signs of depreciation,' and tho upkeep charges would bo. heavier. There were also important charges to be met in regard to the increased wages, owing to the agreement made last year. Ho thought, liowpver, that it would bo unnecessary to set Faille a greater sum than ,£SOOO per year. This would be sufficient to meet any cxtraofiliitary demand- without borrowing jjinnry. . ■ . . - Councillor .Fletcher was.satisfied with nn annual -reserve of" ;Cs(Klf); but it had l"<n understood by the committee that this sum should bg set osido aninialiy_

until tho depreciation fund reached ■£30,000. When tin's amount was reached he understood tluit tho .CS(WO would not be vcquirod. Immediately the fund dropped below .■£.10,000 the annual amount would be raised to .£SOOO again. Tho Jla.vnr explained that in accordance with ii resolution passed in October last this would bo. done. "The Rotten Time-table." Councillor Fuller raid that the decrease in revenue was wholly duo to the inadequate and unsuitable time-table. Since tho- time-table' was altered, tho niiniuer of tramway passengers had begun to drop- J-.viT.vi...dy niu'iv i,i;u tho reason why the traiinviiys Hero not (loins well was the bad time-table. The committee had at icng'tJi done some good work, but ill a very Jong time. People, were not being encouraged to u=o the trams, and he did hope the committee would "get a move on" to enable, them lo do it. Tho system was the best ill the world as far as maintenance and iip-kccp were concerned; the one thing wrong was "the. rotten time-table."

Councillor Harbor thought that the Mayor's statement that the tramway undertaking was in a prosperous' condition was a wrong one. On the contrary, it was in a position to cause uneasiness. There had been surpluses, but they were dwindling, and the effect of the Tunning of cars had not been to reduce rales, but to increase them. The revenue was coming down, and the expenditure was increasing, and unless care was taken the tramways would bo a serious loss to tho city. Much of what Councillor Fuller had said about the time-tablo was quite true and thoroughly justified. The man controlling the time-table" should be out in the street and not in the office. One could not help comparing tho Wellington tramway finances with those of the Auckland system, and in Auckland the company paid a large sum to the city for the concession they held. Councillor .Smith thought the cause of (ho decreased revenue was the reduced fares, ami not the bad time-table. There wero too long stretches in Wellington run at non-paying rates. At the same time he admitted that a great number of trams were running empty all the day long. For all Ibis the tramways wero doing fairly well. How Concessions Work Out. Councillor Frost said in regard to Councillor .ttarber's remark that the conversion of the cars had been of no value that Councillor Barber was wrong, as the cars could now carry more passengers. He deprecated the cry that the concern was going to the dogs. He .thought that the people ought to bo proud of their tramways.

Councillor Fitzgerald expressed surprise at hearing experienced men like Councillor Barber making use of the expressions lie -hail heard that evening. Councillor M'Kenzie said that he wished to congratulate the Tramways Committee en having at last awakened, though it had taken them since October 2, 1911, to do so. The whole thing, he said, was that there had never been any depreciation fund; the fund existing was nn extension fund. A few days ago. lie had been offered by two citizens a couple of concession tickets to use as he liked. He had no objection to working men getting concession tickets, Lut the council should have u control over their tickets, irhicli would prevent a thing of that kind boing possible/. Concession tickets should not be open to bo handed out too freely. As to the time-table, he had had an assurance from the hoard that there were to be big alterations. He then moved that Clause 3 be referred back to the committee.

Councillor Cameron seconded the motion. Speaking of the concessions, he said that they were not uniform, and, therefore, unjust. Giving- largo concessions to suburbanites was unfair to the city people. Suburbanites got concessions, and paid-low rents and low rates; city people paid high rents and high rates, and. got no concessions. Concessions to the snbiirbnn people meant that those people stopped in town so that the suburban shopkeepers lost, while the city business men gained. Ho favoured a uniform concession, such as Councillor .Fuller's suggestion of 16' rides for one shilling, for instance. The Tramway Committee should go into the vn-ruing' power of the various lines, and pay for things out of the profits—not go to the ratepayers, who were the good old milk cow which had been prospected by the Liberal Government for many years. "Bad Times" }o Blame. Councillor Jlindmarxh declared that tho hard facts of the situation ought to be faced. He hud been informed that a little over two years ago there had been over 2000 carpenters in Wellington, and that now there were only 800, which showed that over 1200 carpenters had left Wellington in a couple of years. JS'ot only carpenters, but large numbers of mason? ami other workers, too, had left. That was why the tramways were not buoyant—because Wellington was depressed. There had been bad times, and tho tramways had reflected them. He also said that which was wanted were concreto proposals, not general accusations. ■ Councillor M'Kenzto's amendment was defeated. 'Tho whole import was then adopted, with the following addition (on the motion of Councillor Frost) to the final clause:—"And that such overdraft be a first charge on Ihe depreciation fund to th-a extent of not loss than .€SOOO every year, until such overdraft has been repaid."