THE OTAGO DAILY TIMES FRIDAY, FEBRUARY 25, 1898.

Otago Daily Times, Issue 11046, 25 February 1898, Page 4

THE OTAGO DAILY TIMES FRIDAY, FEBRUARY 25, 1898.

The City Council has found the expected difficulty in adjusting its financial, affairs so as to make its income equal to its expenditure, and the Finance Committee has- apparently not been able to suggest any better method than that which has been sanctioned by usage for many years—viz., strengthening the general account by withdrawals from the gas and water accounts, or, in other words, laying upon the shoulders of the consumers of gas and water a considerable portion of the burden which should belong to the ratepayers.. Cr-Carroll finds a justification for this system in his remarks. "They should consider that the gas and water works ,were the property of the ratepayers, and that they taxied.the burgesses for an article they had aright to expect a profit from?' To1 this doctrine we entirely demur. The ratepayers own the city indeed, and do iir a'sense occupy towards the non-ratepayers the relation of seller towards buyer, but it is a fundamental article in good civic government that the necessities of safety and life shall be provided at as low a rate as possible. They are the conveniences that residents haye a right, to expect, and if there is any justification for deriving a profit from them there is no limit that could be named except the capacity of the consumers to bear the burden. This principle applies more particularly to water, which everyone nipsb have, and which the corporation is best fitted to provide. It does not apply so strongly to gas, because the consumption o£ that is optional. If the price of gas is made too high other illuminants and fuels are used. The council has already experienced this; and, indeed, it may be questioned whether it would, not have been a wiser policy to cheapen the gas so that it could compete with other illuminants, which at present it cannot do, than to make it a luxury, and so limit its use. When the last additional rate was proposed" it was pointed out to the council that there would still be a debit balance in the municipal account, and again the council resorted to the practice of. transferring the | necessary amount from the gas and water accounts. The question whether this process shall continue has now been raised by Cr Hayites, and consideration of the Finance Committee's recommendation has been adjourned until his proposal has been further considered. As we ,-pointed out in November • last, when the subject of finance was under consideration, it had then already been considered inevitable by those who had examined the council's finance that a ninepenny rate would ba necessary. So ; much was said, indeed, , at-■ the council table. At a special meeting of the council on the 10th inst. a resolution was carried imposing a special rate' of 9d in the pound. Cr Haynes on Wednesday evening proposed to go a step further and add 3d to the general municipal rate. A rate of 3d on last year's valuation would produce .£2915; this year it will produce a little more, as the valuation of the city has slightly increased, and that sum would make the municipal account easy. Can ratepayers bear

this additional burden ? Cr Hatnus thinks they can, and has suggested a method by which some of them at least would be recouped. This method consists of a readjustment of the water rate and a reduction of the maximum charges from 7 and 6 per cent, to 5 per cent. It has been felt that the water rate has "hitherto been inequitably imposed. Cr Haynes produced figures at the council meeting on Wednesday evening which showed that out of the 4282 assessments .2828 were assessed at 7 per cent., and it has to be remembered that these have to pay half the water rate -w.heth.ev they use the water or not. These assessments are on residences, and the valuation they represent is .£103,774, while they contribute £7264 to the revenue of the water, department. The total revenue of that department is £12,050, so that the owners of the residences, who are mostly small ratepayers, contribute two-thirds of the revenue, though they, own in. : value . only about one-third of the property. Those who .pay 2^ per cent, number 737, and their assessment is £102,000, while they contribute only £2552. If we take extreme instances in each class, and imagine a cottage assessed at a value of £50 per annum, and beside it a warehouse valued'at £100 per annum, it. will be found that the owner of the ,cottage pays £3 10s a year as water rats,..: while the owner of the warehouse pays only. £5 a year, although the property contained in the warehouse may be worth thousands, for every hundred of that in the cottage. Two factors may govern the charge, for : water—the amount consumed and the amount of protection conferred. If it be admitted that more water is used in the cottage than in. the warehouse, .though that may not be universally so, it will not be denied that the amount of protection conferred is wholly disproportionate. There is no doubt at all that Or Haxnes's proposal * will be warmly approved by small ratepayers. Taking Cr Solomon's .'own illustration, a man who pays water rates on an assessment of £15 per annum now: pays 21s- iper annum.' Under ,a 5 per cent, rate he would pay 15s, thus saving 6s. But if the municipal rate is increased by 3d in the pound he will pay 3s 9d additional to his present rates, so that his1 net saving will be 2s 3d per annum. The effect of Cr Hatnes's proposal is practically to readjust the burden of the rates as between the residential ratepayers and those who own shops.and hotels and stores and other valuable buildings. It will not be denied that, as to the disposition of the burden, too, much of it falls upon the residential ratepayer. That can only be remedied by changing the incidence of the rate and reducing the margin between the

two extremes of 2| per cent, and 7 per cent. At present Dunedin is the only-tone of the four chief centres in ■which; the maximum water rate permitted' by the Municipal Corporations Act is levied. Of the minor towns, only Palmerstort North, Oamaru, Invercargill, and Port Chalmers impose the maximum rate. In Auckland the rate is 2| per cent, (to consumers only), and in Wellington 4'per centi Whether it is prudent to reduce the.income from the sale of water byr<£23oo per annum is another matter. We learn from the rernarkVof Or Hatnes that 'the'water account is £13,000 in credit,,and that the withdrawal of .£23oo'per annum will still leave a profit of £2300 per annum If that is sufficient to pi ovule for contingencies theji Cr Hushes . has made : out; a good' ca c On the whole we are disposed to think that the council would be well advised to accept the amendment put forward to the report of the Finance Committee. It has at all events the element of finality, and will restore the equilibrium of municipal finance. The ratepayers cannot .truthfully complain of hardship. Due allowance has been made for years of depression, and now that the corner has been turned it is their duty to assume cheerfully their proper share of the burden. It is to them that the general public look to make the city attractive, healthy, and safe, and they are the persons who will reap the immediate profit. We hope with Cr Destnisi'os- that the time 'is approaching when relief will also be given to the consumers of gas, and we regard Cr Hayjntes's proposal as the first'step in that direction. The council has spent a great deal of' money in attempts to popularise the use of gas.. It has never tried the" obvious method of sufficiently cheapening it, and while it is excluded because of its price from the great majority of residences, it is in vain; to say that the attempt is hopeless. We congratulate .the council and the citizens upon the circumstance that the financial position of the corporation now permits of such a discussion.: Last year the mayor said the revenue of the municipal account had falien short of 1 the expenditure by.,£10,500 a year for 10 years. Let the ratepayers resolve that the account shall balance itself this -year, and so be, in a position to take full advantage of the prosperity that is now tardily returning.