The Daily News MONDAY. DECEMBER 7. THE BOROUGH BALANCE-SHEET.

Taranaki Daily News, Volume LI, Issue 294, 7 December 1908, Page 2

The Daily News MONDAY. DECEMBER 7. THE BOROUGH BALANCE-SHEET.

| We doubt whether live per cent, of the I ratepayers, even were they anxious to do so, could accurately sum up the financial position of the borough from the statement of accounts presented in the ordinary balance sheet. That for the year ended 31st March last is now in circulation, and proves no exception to the rule.. The fault does uot lie with the local authorities, or the town clerk, however, but with the antiquated system to lie followed as required by the Audit Department. While from the point of view of the Auditor-General the system may have something to eoni- : mend it, we fail to share his appreciation. Local bodies are quite aware of j the inadequacy of the set system, and at [ the last- Municipal Conference, reconi- | mended that trading accounts, wlwn I they existed, should be shown clearly

and separately as in (lie case of an ordinary business. It is with reference tu such municipal departments as electrict light, abattoirs, water,..drainage., etc., that we particularly refer; the ordinary statement ol receipts and expenditure being fairly easily followed. With local ratepayers, the question of prime importance is the position of the accounts referred to, the capital for the providing of which has been raised by loan. New Plymouth's public debt at Jlsl .March amounted to £120,808, but then only £2500 of the £5200 electric light extension loan had been raised. By this time no ihnibt the bulk of the bal- ' ance has been subscribed, in which case our gross public debt amounts to £123,550, involving aix annual interest charge of £s4liti. Approximately £27,000 of the loan moneys will shortly have been spent on the electric light works, which at 4'/ s per e'ent. means £1215 per annum for interest, not including the sinking fund attached to three of the four loans. With it sinking fund of /, per cent, over the. capital liability, the annual charge amounts to £1350. The electric ligiiL working account for the year slums a surplus of £1271 revenue over expenditure. i'uttiiig, therefore, Hie worst possible complexion on the working of this important municipal debt that is, charging 5 per cent, for interest and sinking fund on the total of the electric light loans, against the earnings of last year—and it is clear that the electric light department is already paying interest and sinking fund, or interest and a small amount for depreciation. We anticipate that while the interest and sinking fund charges will be no greater than we have stated—as a matter of fact we have over-estimated the amount, having calculated l /-. per cent, sinking fund over the whole of the loans—tile surplus of revenue over working expenditure, owing to rapidly increasing business, should be considerably greater. The position must be regarded as eminently satisfactory considering the comparatively short time the ivorks have been in operation, and will be still more so when the surplus i is sufficient to oover reasonable depreciation on plant. Assuredly within a few years, with the rapid strides being made in electrical engineering, no less than the wear and tear on the continuously running machinery, costly portions of the plant will have to be renewed or replaced by later machines. from a prudent business'point of view, therefore, the Council should allow for depreciation, and ensure that no further borrowing will be necessary for repairs or renewals. We quite anticipate that within a very short time, such is the demand on the electric current, it will be necessary to again increase the producing capacity of the generating station. It will involve considerable expenditure, necessitating heavy wier and tunnel works as well as new plant. As a w'ork ot considerable magnitude, it will require to have the fullest engineering investigation before anything is decided on.

To keep pace with llie times, the day is not far distant when New Plymouth, as Wanganni, will have a tramway system. In any further extensions at the power works, provision will have to be made for the generation of electricity for tramway purposes. What the public will .have to be satisfied about, is that there is sufficient power available in the Waiwakaiho to generate sufficient electricity for tramway purposes in addition to tile prospective ordinary requirements of the town for some years to come. Provided that assurance can be given, and possessed of knowledge of the success that has marked the working of the electrical department up to the present—involving '.lO extra rate, we are convinced proposals for a more ambitious scheme would be very favorably received. The waterworks and drainage l accounts are scarcely parallel with that of electric light, in that they can scarcely be treaied as commercial undertakings, or expected to show a direct jirolit on -working. The abntfoirs, however, is a business investment already paying, besides interest and sinking fund, 3 jut cent, of the capital invested. A very satisfactory position is revealed in the balance sheet which shows only £lB odd outstandiii" of .LSOOO rafe.s at the end of the lli W n° cial year, It nll'ords a good indication of llie prosperity of ihe town, and is al»o a tribute to the assiduity of the town clerk.