‘Morality’ of balanced budget argued

Press, 25 May 1977, Page 6

‘Morality’ of balanced budget argued

By

STAN DARLING

While Christchurch councillors were approving on Monday a rates bill that topped SIOM for the first time, they were also arguing about the “morality” of having a balanced budget — and under-spending — when there was urgent work to be done. The rift is bound to widen this year because of the council election in October. Both the Citizens’ Association and the Labour Party will make plain how they think money should be spent.

Citizens' Association councillors will stand firm in their belief that spending economies will help the ratepayer by holding down increased money needs in coming years. Labour councillors will say they are making false economies, and failing to use available money on needed works. This week, there was much talk that Citizens’ councillors had failed to live up to their 1974 promise to spend more money on maintaining city streets. It was recognised that there had been loan restrictions in the intervening years, but Labour said it was inexcusable to have underspending of about $475,000 at the end of this year. Citizens' councillors said

Labour always seemed to err on the side of overspending, and it was no sin to be on the other side for a change. In terms of the programmes they pursue — and the rate at which they pursue them — Citizens’ and Labour councillors are akin to world super-Powers in the thawing Cold War. The differences get fewer as policies come closer together. But philosophical differences are still enough to keep the arguments going.

In final budget debates this week, it was argued that the present council cares more about saving money that serving people. As the election approaches, both sides plus the Values Party — which does not now have a council seat — will assert that they represent the real interests of the people. The council balanced its budget last year after a net debit of $57,373 at the end of the year before. By March 31. it had a net cr.dit of $424,765. The estimated credit balance in the general rate account at the end of this year is $15,304. Last year, the council received $176,968 more than expected in departmental receipts. That included fines (up $26,028), interest on investments (up $84,656), a dividend on

insurance premiums (up $11,500), and petrol tax revenue (up $26,254). The housing and property account had a $159,931 deficit at March 31; $82,134, of that was from land held for future projects, and there was $77,797 in accumulated operating deficits. The debit balances in housing accounts come from loan servicing charges during housing construction, before the properties start producing rents. Housing will have a S6M programme, including 55.28 M from loans and subsidies. There is no direct charge on the rates from housing projects. Operating surpluses should result from major South Christchurch reclamation and community' housing projects being finished. Other spending details are:

Waterworks: Spending here was $212,170 more than expected last year, but money recovered increased more than $280,000 over the expected amount. There will be a rise in this .year's estimated spending from SI.9M to S2.IM, largely because of increased costs. The water rate needed is $1.44M. or 18.95 per cent up on last year. But it is only necessary to increase the rate in the

dollar by 15.47 per cent because the capital value of the city has increased. Airport: Capital spending was much less than expected last year, mainly because of delayed starts on several projects. A credit balance of $659,933, fully financed from airport revenue, was transferred to current accounts. This year, the airport’s operating receipts are expected to reach S3M. Major sources of money are terminal area rentals and concessions (SI.4M) and landing dues ($992,000). Of the total spending of $3.9M, about S2M will be for capital works. Only about $BOO,OOO will be withdrawn from reserves created from earlier profits. By law, airport surpluses cannot be used for any purposes aside -from airport development. Parking: Six off-street car-parks had an operating surplus totalling $114,271 last year, while the remaining three had an operating deficit of $54,159. Revenue exceeded expenses for the entire operation. Parkingmeter revenue of $372,954 was $50,959 more than received in 1975-76. The park-ing-meter account’s credit balance was reduced from $329,739 to $216,164, mainly because of $275,000 spent to buy the Tatter-

sall’s Hotel property, in Cashel Street, for off-street parking. Parking operations are independent of rating.

Works and traffic: Recoveries and receipts in all three cash accounts were more than expected. Final figures for last year show an over-spending on gross, but a 1 per cent underspending on net expenditure. This year, net expenditure will be 22 per cent above 1976-77, at SS.BM. Gross spending of SIO.BM is up 31 per cent. An increase in total cash recoveries of about $790,000 is expected, with administrative receipts up $155,000, sale of streetworks properties up $227,000, National Roads Board subsidies up $200,000. and rubbish disposal receipts up $113,000. About one-third of the division’s increase is because of $325,200 as the city’s share of $500,000 for the metropolitan rubbish disposal scheme. Last year, about $150,000 worth of work was done without matching funds from the National Roads Board, but that was down from an expected $400,000 because the allocation was raised later in the year. About slBo,ooo' worth of unsubsidised street work will be done this year. Another $50,000 may be used to supply rubbish bags to commercial and industrial premises, but

that programme has yet to be studied the "oughly and presented to the council. Councillors voted not to cut projected increases in spending for footpath resealing, surfacing, and maintenance.

Parks and recreation: Total cost of this department will be $3.15M. That is down from last year because of reduced forestry activity after most of the windblown trees have been removed, but rates are up 47.46 per cent (from $1.35M to S2M) because the timber money is not available to offset them this year. Library: The library rate increases by 19.09 per cent. Provision has also been made for a $450,000 loan to purchase the remainder of the central city library site, and pay for architect fees to the sketch plan stage. To March 31. $340,727 had been spent on library land purchases. Canterbury Museum: The museum requires $199,325 from the city, a rise of 2.5 per cent. The council’s share has been reduced this year because of the Waimairi County revaluation.

Christchurch Town Hall: This facility’s requirement of $296,418 shows a 2.1 per cent increase. The low rise is due mainly to an operating deficit that was $40,000

less than expected, and loan charges remaining about the same.

Community services: Total spending will be un 33 per cent, to $357,835. Capital spending of $124,300 will be for establishment of community centres and halls in the suburbs. Operating costs are up sharply, to $219,000; the main item is the Cathedral Square Women’s Rest Rooms and Creche, at $75,000.

Health Department: Although spending will rise by almost 15 per cent, the rate requirement is down 2.1 per cent because more money will be coming in from dogregistration fees.

M.E.D.: Capital spending will be up 34 per cent, from S3M to S4.IM. It will be financed from depreciation (SI.SM), revenue (SI.BM) and loans ($750,000). The cost of bulk power this year will be $23.9M, and the sales of electricity are expected to bring in 532.4 M. About SI7M of that will be from domestic consumers. It is expected that kilowatt hour sales will drop slightly, partly because of retail price rises in the past two years, and partly because of energy conservation drives. In 1975-76, the increase in sales was 10.26 per cent, but it dropped to only 0.43 per cent last year.