CITY COUNCIL FINANCES.

Auckland Star, Volume XXVIII, Issue 210, 10 September 1897, Page 2

CITY COUNCIL FINANCES.

A NEW LOAN PROPOSED,

INCREASED INCOME REQUIRED.

The question of the financial position of the city was discussed at the meeting of the Council last evening, the matter being brought up by a recommendation in the Finance Committee's report which read as follows:— "Re motion No. 1,430 the May or re Council's finances. Having regard to"the necessities of the city, your Committee recommends for the Council's consideration : (a) A pro* posal to provide the means by special Act of the Legislature, for the following purposes (say 50 years, four per cent, loan), viz., water supply, supplementary, £57,000; drainage completion, £30,000 ; Fire Brigade station, £2,000 ;l Town Hall and fittings, £10,000; Freeman's Bay purchase and reclamation, £30,000 ; Domain improvements, £1,000; payment of overdraft. £20,000; total, £150,000. (b) That a poll of ratepayers be taken thereon, a vote being recorded for each proposal, and on a majority of votes being so recorded the Council proceed and introduce a Bill accordingly." Cr. Trenwith moved the adoption of the report. Cr. Glover objected to hurrying through such an important question as borrowing £150,000 in that manner. Cr. Farrell thought the matter should be referred back to the Finance Committee and a statement be brought up showing the exact financial position of the city. The plain facts should be placed before the citizens. One Mayor went out of office and said there was no overdraft, and then a few months afterwards they were told that the overdraft was £20,000. It was best to let the ratepayers know the exact position of the finances of the Council.

Cr. Stichbury said the exact financial position of the Council at the present time was by no means satisfactory. Roughly speaking the receipts were £41,575. Against that the interest on loans amounted to £25,000, sinking fund £2,500, so they had to send away about £27,500, leaving only something like £14,000 to attend to all the wants of the city during the year. That was not a great amount of money with which to keep a large city in repair, and do other necessary works. As a matter of fact they -went back about £2,000 on their interest account every year. They paid interest at the rate of 6 per cent, on an overdraft of about £27,000, and in another account received 3 per cent, upon £7,000 which was at credit. Ratepayers must face paying higher rates. They might strike a rate tor Charitable Aid, but he would not like to see it. To get this £150,000 would mean another sixpenny rate. The fact was that if people wanted the works done they must pay extra rates.

Cr. Warren raid £57,000 was not an adequate sum to set down for water supply. The item £30,000 for Freeman's Bay should be struck out altogether, as that was purely a luxury which the City could not afford. Cr. Hewson said it was certainly ridiculous to talk of borrowing money to pay off an overdraft. Yet that was recommended by the Committee. If that kind of financing was done ratepayers would want every man of them turned out of their seats, in order to put men in their places who would manage matters in a more business-like way. He did not see the need of borrowing at all. They had £14,000 to go on with and it ought to be made,, do. Already they had borrowed money for a town hall but the building was not yet erected. He would second the amendment that the matter be deferred for a fortnight. Cr. Paterson thought if the money was borrowed at all it should be for water supply and drainage alone. That would take £150,000 of itself.

Cr. Kidd agreed that they must have money. The Committee should consider the possibility of converting the loans now existing at 6 per cent and getting the money at 4 per cent. Their floating loans now amounted to £450,000, most of which was borrowed at 6 per cent. If that were converted, they could then borrow another £100,000 at the same rate of interest as the conversidn. The saving of 2 per cent, of the £450,000 would give them the other £150,000 for no interest at all. It was rather interesting to note how extravagant the Council became even on the A rery idea of getting borrowed money to spend. Of the £1.50,000, at least £43,000 was proposed to be used for things the city could very well do without. As to the present overdraft, he could not help thanking that it was a fust class cheque upon reckless expenditure. Tlie question was then put; to the Council, when the amendment was carried referring the whole question back to the Committee for further consideration, as suggested by Cr. Farrell.