GAS AND ELECTRICITY

Otago Witness, Issue 4031, 16 June 1931, Page 5

GAS AND ELECTRICITY

SURCHARGE ON ACCOUNTS COUNCIL’S RESOLUTION RESCINDED. A deputation of representatives of the electrical contractors of• Dunedin waited on the City Council on Wednesday evening to speak on the decision of the council to impose a 5 per cent, surcharge on electricity accounts. " The members of the deputation urged the recision of the previous resolution. The town ckrk said that a letter had been received from the West Harbour Borough Council protesting against the surcharge.—The letter was received. DISCUSSION BY COUNCIL. Later in J, he evening Cr Marlow moved in accordance with notice:— I hat the resolution of council passed on Mav 25. imposing a surcharge of 5 per cent, on gas and electricity accounts, to provide funds to meet a portion of the council s liability to provide for the unemployed, be rescinded to enable the fpllowing motion to be considered: — 1 hat in lieu of imposing a 5 per cent, surcharge as set out in the last preceding clause, a special transfer be made from the electricity, gas. and water accounts to the general account, to provide the sum ot £l2 000 for the year ending March 31, 1932, such transfers to be as follows:— From the electric account, the sum of goo From the gas supply account, the sum of 3,000 From the water supply account, the sum of 1,500 Total £12,000 Note. —This sum, together with £14.000 savings effected in the general account, will provide a fund of £26,000. .i ■ n . e P ut read a minute which had been drawn up by the Mayor (who is at present in Wellington). The minute read as follows:— It is to be hoped that the council will, reject the motion tabled for to-mor-iows meeting in which it is sought to rescind the motion imposing a surcharge ot 5 per cent, on the gas and electricity accounts. The money is urgently required to allow the scheme of employment to be continued. If the present income of the department., based on the charges without regard to the surcharge, is able to bear the strain of a further transfer there is ample scope for the spending of the money to cover the hardships that ■ome from the one week each month that the men are compelled to stand down. I here is a distinct benefit in the scheme m that some contribution’• to the heavy cost we are called upon to bear will come from outside the ranks of the city ratepayer!,.

“ The whole of the financial burden and responsibility involved in the heavy borrowing the city has engaged in by the creation of these departments is now carried by the city ratepayer, as such, and it is. therefore, quite reasonable to ask others to help in bearing the exceptional burden we are now’ called upon to bear. The scheme evolved placed one half of the total yearly cost on the ratepayers, the other half being carried by the users of gas and electricity, a small fraction of whom are outside the citylimits and who yet enjoy the use of these services at practically the same favourable charges as the city ratepayer. In these circumstances protests by outsiders, who do not share in the financial burden, should carry no weight with the council. The money is needed, and in my view it would be unwise to depend upon getting it from estimated profits based on the existing selling charges. What is required is new revenue. The position calls for a measure of sacrifice, snread over as wide an area as possible.

“ The practical effect of increasing the amount of transfer from the trading accounts without providing for new income is to provide the additional sum by borrowing to cover the capital expenditure that could be done by- the surplus revenue It would appear, therefore, that to impose a further charge on the trading departments by way of transfer and bated on their present scale of charges is to do so by having resort to borrowing. That course cannot be justified.” Cr Marlow said he was rather grateful to the Mayor for his minute because it gave one a fair chance to explain where he had misunderstood the position. Cr Marlow said he was opposing the first decision of the council on three grounds. First, he claimed it was wrong in principle; secondly, he claimed it was not equitable; and thirdly, he claimed that it would not have the effect that the movers of it would have them believe. The Mayor in his minute had pointed out that the money was needed. Granted. According to his motion the money would be found. The Mayor said that in a sense his proposal meant borrowing money He granted it. What the Mayor overlooked was that with the surcharge they would still not have the profit to do the work with, because they would have a reduction in revenue. Those best capable of judging in the electrical department were confident that the surcharge would have the effect of reducing their revenue from the electrical department by more than £7500 and they were going to antagonise consumers without benefiting themselves. Cr Marlow said that on the previous Monday the electrical engineer (Mr M. C. Henderson) had arranged for the whole of the electrical staff to meet. Without doubt they had all contended that the 5 per cent, charge would prove a drag—that was the conclusion they had found from. going round from house to bouse. He was sure that the surcharge would not prove beneficial. Both the gas and electrical departments were doing well and they could bear the charge he had suggested. Despite the argument of the Mayor the outside districts would bear their quota under his proposal, in exactly the same ratio. Under his scheme they were going to get the money and their departments would still be able to make progress.

Cr Wilkinson seconded the motion, not because he said he considered it was good finance, but because it was the lesser of two evils. The motion would not embarrass the department like the surcharge would. There was a natural resentment to surcharges, and the users would voice their resentment by curtail-

ing the use of electricity wherever possible. As regarded the friction with outside boards, he realised that some of them were making an effort to meet the unemployed problem and they considered that they should receive their quota of the surcharge, and no one could blame them tor doing so. Cr Wilkinson considered that there should be a slightly increased rate for the use of gas and electricity to the residents of outside boroughs. i Hayward said he intended to support the motion. He said they were penalising the outside boroughs to assist their own unemployed.— (Dissent.) Cr Allen said he could not support the motion. If, at the last meeting of the council, they had not fixed the surcharge they would have fixed their rates at 4s 8d in the £. They must not lose sight of the tact that the amount spent by the council on behalf of the Unemployment ron X nnn Was Hus the surcharge of £30,000, bo that there was £lBO,OOO beinospent in the city. The speaker referred to the operations of their trading departments, and said he w-as sure the people would prefer the surcharge rather than an increase in rates of 3d in the £, or an mcrease in their tram fares. Cr Wilson supported the motion. The question as to how the money was to be raised, he said, would be settled by the committees. Cr Munro also supported the motion. Cr M Indoe said that he might be accused by the Finance Committee of being a turncoat but he had been very much impressed by Cr Marlowe statement of the position. The business aspect of the question appealed to him. If the charge were increased the result would be an economy on the part of consumers out of «-n„Fi rC, E 0rtlO ”j to extra charge that would be paid On the evidence that had been given by employees to Cr Marlow he must support the motion, though he r. ha 4 1 r ? r i ev ; 1 , 0u5, 7 voted otherwise Cr Mitchell asked whether Cr Marlow was satisfied that the Electric Power and “J part T ment could stand the charge, f £7ooo. It seemed like gambling on future profits which were not assured. He disapproved of motions which had been passed by outside boroughs objecting to the charge. It was the City Council s business He resented the action .Jjke other bodies. It waa hardly cricket. l Cr Shacklock said that the council itself had made a surcharge which was difficult to put into force. The Government regulations made the position particularly d ™, cul * m regard to gas. As chairman of the Finance Committee he thought that the council should go ahead with the matter without further delay. Cr Marlow, in reply, said that Cr Allen, in his remarks concerning the rates had overlooked the fact that of the amount that was to be found, £14.000 was to come,from rates. That amount would Still come out of rates. The tramway revenue had no bearing on the question. It would not be difficult to find the sum of £7500. Last year there had been a drop in revenue in the first half of £20.000 largely owing to the water shortage. During the second half there had been a drop of £4OOO as compared with the previous year. In the previous year the profit had been £36,000. Last year £lO.OOO had been spent in running the stand-by plant, and this year that would be very largely Saved. The council need have n o fear. The town clerk had told him that there would be no difficulty in finding the money. The motion was declared carried on the voices.

Cr Mitchell: Do you want a show of hinds? Cr Allen: No.