Rating Powers of Borough Councils.
Manawatu Times, Volume X, Issue 1192, 5 March 1884, Page 2
Rating Powers of Borough Councils.
In reference to an article undei the above head which appeared in Monday's issue, it has been argued by some of those who dislike being tied down to administering the municipal law as it stands, that as the Council did not arrange for a sinking fund wheu it tried its 'prentice hand at raising the present loan, it is no therefore bound to respect the provisions of the Act in making auy arrangements now to provide for the said sinking fund. This, however, is not the case. It does not follow that because the promoters of the preseni. loan bungled terribly in their work, their blunders must be perpetuated when it has become necessary to make better or more satisfactory arrangements, It is moreover to be borne in mind that the Act does not allow the Council to strike a "special rate" for any other purpose than, "providing the interest a/bd sinking fund upon any. loan raised by the Borough." Under clause 112 it is evident that this special rate can be struck at any time after the raising of the loan and therefore whether it was contemplated to have a sinking fund or not. This in fact, is admitted by the Council's action in now proposing to strike the special rate, thqugh some years have elapsed since the loan was raised. But where the Council's error lies is in the fact that it proposes to only " partially provide " the interest, and the Act does not countenance this " partial provis'ori." I*s terms are clear and explicit and there isnothiug to begained by attempting to evade them. The position of the Council is simply this: It has a general rate of Is in the £, that being the utmost limit to which it can rate under Clause 108. Pinr Ithat the money derived from this is sufficient to pay working expenses, it arrived at the bonclusion that this available balance could be nsei for the purpose of paying part of the interest on the existing loan. It is not sufficient to pay the whole and it is then proposed to make op the deficiency by means !of a special rate. To pay the whole interest a " special rate " of lOd in ! the £ would be required, but |if the available portion . from the general revenue is included, a special rate of 6d will be sufficient. Therefore the Councillors jump to the conclusion that all they have to do is to exercise the power vested in. them and strike the special rate to make up the deficiency, or •' partially provide the interest." But the Act jealously guards against this hasty and incomplete way of doing business, for two or three very cogent reasons. One of these is that while it is made absolutely illegal to use money derived from the special rate for any other purpose than paying the sinking fund or interest, the expenditure of the money from the general rate is not so restricted, and, at the end of the year, after voting away all its general revenue, the special rate would be all that was left, and this would of course only "partially" perform its work. That it is quite likely such a state of : affairs would supervene is disclosed by the fact that in the Council it was first proposed to strike a rate of 5d to " partially provide the interest," but the sum was increased to 6d on the representation of Cr M'Neil — not to provide a larger proportion of | the interest, but to enable certain work to be carried out on Botanical road ! Here, even before the rate was struck, the Councillors were evading the provisions of the Act and trying to squeeze a little more revenue into the general account in an indirect manner. The incident was instructive as showing a. tendency which has been anticipated by the Act, and provided against. The position of the Council.briefly stated, is simply that it finds that in order to pay working expenses and interest, it must raise rates amounting in the aggregate to Is 7d in the £, and it proposed to do it thnsi — General rate Is, library rate Id," and special rate 6d. But its proper course is to strike the special rate at 10d, reduce the general rate from Is to Bd, and leave the library rate as at present. By this means it would raise the same sum, but in conformity with the Act, and moreover it would then be absolutely certain that the money from the special rate would be devoted to its legitimate purpose. The accounts would also then bs perfectly separate and distinct — a most desirable thing in itself. In this connection^ however it may be remarked " liKat the Council may have to raise more t^an the sum mentioned, as ' it is, questionable whether both interest and sinking fund must not be provided for at the same time by the special rate. It is to be hoped that the Councillors will, for pnee, no matter how, distasteful it inay be to them, endeavor to keep within the limits of the Act, and save subse* q ue.nt expt nse and ..to the Borough, .- /; "