MUNICIPAL SALE YARDS.

Waipa Post, Volume XX, Issue 1180, 10 December 1921, Page 4

MUNICIPAL SALE YARDS.

MUNICIPAL control of commercial activities is seldom advantageous, although experience has proved the wisdom of municipal enterprise in sale yards provision and management. The municipality, with its wide borrowing powers and access to cheap money, has a very definite advantage over private investors. This fact was recognised by those who directed the old-time Town Board, and a foundation was laid by them for the establishment of the important sale centre that Te Awamutu has now become. In, those days there were somewhat make-shift yards in Sloane Street; they were little larger than the public pound; they lacked any semblance of modern convenience; and in every way were out of keeping with the requirements of a developing district. Such a condition, bad as it was from the convenience standpoint, was rendered worse by the fact that private enterprise would not or could not meet the requirements of a growing business; hence, with commendable foresight, the then administration embarked upon a policy of municipal ownership. A loan of £BOO was and the new yards were provided. It was no easy task; in those days a loan commitment for £BOO meant more to a small population than does a commitment for £BOOO to-day; nor was the town's commercial future so well assured then as it is now. However, immediately facilities for yarding stock were offered, the sales increased by leaps and bounds until, a few years ago, the necessity arose for extension of the yards. The Borough Council proved equal to the demand, and after a good deal of negotiation a further loan of £3OOO was available. This money was used in doubling the number of pens, concreting the yards, and improving the facilities generally. That, briefly, is the history of the municipal sale yards in Te Awamutu. Until a year ago the local authority had been content with a rental return which it was claimed barely covered the annual recurring expenditure. Last January the Council and its tenants —the auctioneers —arrived at what was considered a more equitable and self-supporting basis: the rental was raised to an aggregate sum of £4OO per annum. Conditions at. that time were flourishing, and there was practically no difficulty in securing rental which would cover the Council's estimates. But now the stock market is unsteady, the firms are seeking reduction, and the Council comes face to face with a policy question as to whether its "sale yards enterprise should be self-supporting or whether a deficiency can rightly become a charge against the community of ratepayers.

Last year, to 31st March, 1921, there was paid away on account of loans a total sum of £228 13s 2d. An additional item in. the balance-sheet of £25 18s 5d for cleaning is the only other apparent detail of expenditure, bringing the total figures to £254 lis 7d. What amount was absorbed in maintenance is not stated, and must presumably be hidden away in the general borough charge for " wages and materials." Without this item it is impossible to accurately assess the cost of the yards. Then there is the further consideration of the rate of depreciation; i'f we assume an outlay of £2OOO in yards and buildings, and that twenty years is a reasonable term in which to write off capital cost, another £IOO per annum will be needed. If those assumptions are reasonably accurate the Council's recurring charges amount to:— ,

Loan charges 228 Cleaning 25 Repairs (estimated) 25 Depreciation (estimated) 100 £378 On such a showing the £4OO rental is not very much amiss, particularly remembering that neither the auctioneers nor commercial investors could hope to base loan charges on so favourable a rate as 5 and 5£ per cent, and that the cost of cleaning 'has necessarily to be increased to comply with public health standards. The Mayor seems to have accurately estimated the Council's ability to reduce the rental when he stated on Monday that the only apparent over-charge is the loan assessment in respect to the portion of the sale yards site which has been retained for the Council's own use. In the year now drawing to a close the auctioneers have conducted 59 sales in the yards; that works out at a rental of £6 15s 5d per sale. There is not the least doubt that reduction would not have been asked for without good cause, and it is also evident that the Council is anxious to seek an arrangement which will serve

every interest. It is certain that private investors could not maintain the yards at a loss, and we do not think the auctioneering firms will expect the Council to do so, either. What is necessary, we think, is to arrive at the basis of actual necessity so far as maintenance, cleaning, and depreciation are concerned; and, by close investigation, a way may be found to make possible some slight concessions in these items so that every interest may be served. We hope so.