Wellington Council Seeks Overdraft Of £1,000,000

Press, Volume XCIX, Issue 29153, 14 March 1960, Page 15

Wellington Council Seeks Overdraft Of £1,000,000

“The Press* Special Service

WELLINGTON, March 13. The £1,000,000 overdraft which le Wellington City Council will pply for from its bankers for ie 1960-61 financial year is not Egarded by banking authorities i an unusually large sum for a lunicipal authority of its size and nportance. It is a regular practice for local odies to seek seasonal overdraft ccommodation from trading anks to enable them to connue the financing of essential wks between collections of rate •vies. Local body applications for verdrafts are limited by the local Authorities Loans Act, 1956. > three-quarters of the amount f local revenue for the proceeding ear. The Christchcrch City Counil has an overdraft limit of 250.000 and the Auckland City bunch's limit is £650,000. The Wellington City Treasurer Mr O. S. Drawbridge) said the auncil had never had occasion > call on such an amount. Under ie Act, the council could actually eek authority for a higher mount as the annual revenue mounted to about £ss million. Amounts paid for interest on verdrafts in the financial year rhich ended on March 31, 1959, mounted to £10.760. These were iade up of electricity £2467, ranspcrt £8266, and abattoirs £27. The Christchurch City Treasrer (Mr L. A. G- Rich) said that verdraft interest charges would ost Christchurch ratepayers be-

tween £7OO and £BOO for the 195960 financial year. The council had a standing arrangement with their bankers of a maximum overdraft limit of £250,000, on which interest was charged at the current rate of 4J per cent. In the 1958-59 financial year, Auckland ratepayers faced an interest bill of approximately £6400, but not all of this was bank overdraft interest.