220 CMR, 50, SUPPLEMENT to UNIFORM SYSTEM OF ACCOUNTS

Current through Register 1536, December 6, 2024

SUPPLEMENT TO UNIFORM SYSTEM OF ACCOUNTS

For Gas Companies for Application to Municipal Lighting Plants--Gas

A. The definitions, instructions, and accounts contained in the foregoing main body of this System of Accounts, as modified by this supplement, shall apply to Municipal Lighting Plants, to the extent applicable to operations of the gas department of the municipality, with the same force and effect as in the case of Gas Companies subject to the jurisdiction of the Department.

B. Whenever the term "gas department" is used in this supplement, it shall be understood to mean the gas department of a municipality, or such department of a municipality as is responsible for the construction or operation of the lighting plant and it shall also mean the gas works themselves and their operations.

C. Separate accounts and accounting records shall be maintained for the gas department as though it were a separate corporation.

D. In order that the books of the gas department may show accurately the results of operations, the gas department shall credit the appropriate accounts with the cost of property, services, materials, supplies, use of space or equipment, etc., furnished to the municipality or any other department thereof.

E. Similarly, the accounts for gas operations shall include the cost of all items applicable thereto, including expenses of the gas department paid by the municipality, and services, materials, supplies, water supply, use of space or equipment, etc., furnished by the municipality or any other department thereof to the gas department.

F. These provisions are intended to make possible accurate determination of the results of operations of the gas department by including in the operating accounts all applicable items, whether or not they represent actual payments.

G. For convenience, all of the balance sheet and surplus accounts prescribed for Municipal Lighting Plants are listed hereinafter, but the texts are given for only those accounts which are in addition to those prescribed for other Gas Companies and for those accounts which are modified.

Municipal Lighting Plants Classified

Except as modified by this supplement, Municipal Lighting Plants shall keep the accounts prescribed in the main body of this System of Accounts for Class B Gas Companies.

Tax Levy and Form of Vote Regarding Levy

The statutory provisions governing the operations of Municipal Lighting Plants are designed, so far as practicable, to permit such plants to be operated on a business basis as though independently owned and operated. As the city or town in its corporate capacity is in every instance a large consumer of gas, the statutes require that there shall be appropriated and included in the tax levy an amount not less than the estimated cost of gas to be used by the city or town, and the money so appropriated is treated as income, the same as though received from a private customer. If there is any excess of income over current expenses (including, as required by the statute, depreciation, interest and maturing debt requirement), such excess of profit may be left in the business, or returned to the town treasury, to be used, like other municipal receipts, for the relief of general taxes. If left in the business it should be used in the succeeding year for extensions and additions, to that extent relieving the city or town from the necessity of making additional appropriations or incurring debt for that purpose.

A doubt has always existed, in view of the language of the statute, whether the receipts from private customers can be used for the expenses of the plant without being expressly appropriated therefor by the city council or town meeting. To eliminate this question and also to provide for the disposition of any excess of income over expenses for the year, it is recommended that the appropriations for the current expenses of Municipal Lighting Plants be made substantially in the following terms:

ORDERED: That there be included in the tax levy for gas used for street lights the sum of___ dollars, and that said sum and the income from sales of gas to private consumers or for gas supplied to municipal buildings or for municipal power, and from sales of appliances and jobbing during the current fiscal year, be appropriated for the Municipal Lighting Plant, the whole to be expended by the manager of municipal lighting under the direction and control of the municipal light board (of the selectmen) (of the mayor) for the expense of the plant for said fiscal year, as defined in M.G.L. c. 164, § 57, and that, if said sum and said income shall exceed said expense for said fiscal year, such excess shall be transferred to the construction fund of said plant and appropriated and used for such additions thereto as may thereafter be authorized by the municipal light board (by the selectmen) (by the mayor).

If it is desired to return the excess to the town or city treasury, the closing words of the order, beginning "shall be transferred," etc., should be stricken out and the following words substituted, to wit: "shall be returned to the town (city) treasury."

220 CMR, 50, SUPPLEMENT to UNIFORM SYSTEM OF ACCOUNTS