The Dominion THURSDAY, NOVEMBER 1, 1928. WELLINGTON CITY FINANCE

Dominion, Volume 22, Issue 32, 1 November 1928, Page 10

The Dominion THURSDAY, NOVEMBER 1, 1928. WELLINGTON CITY FINANCE

The Mayor’s recent statement on the finances of the City of Wellington, revealing as it does a per capita indebtedness of £ , indicates the satisfactory nature of the City’s credit status. Ine ease with which the City Council can now raise loans, however, is a potential source of danger, in as much that those who foster the idea of ambitious schemes cannot readily be repulsed by emphasising the difficulties of financing their proposals. , In advocating a policy of maintaining the indebtedness at the present ratio of £4O per head of population, .Mr. T. roup suggests a useful standard whereby the Council may be judged in the future. If this standard is kept in mind by both city councillors and public it should afford a check upon unduly increasing the dead-weight of debt. This does not mean that the City should go on for ever borrowing at this rate. It should merely fix the maximum. The estimated increase of population within the City’s rating area at .present will permit of the borrowing of ;£200,000 annually while maintaining the equilibrium of £4O debt per head of population. It is pointed out, however, that the City’s commitments for the next three years are in excess of this safe margin. . They amount in fact to an average of £285,000 per annum, for which new money will have to be provided. Within the three years, therefore, £255,000 in excess of what Mr. Troup deems the safety-margin of borrowing will have to be supplied if the Council’s programme is to be carried out.

Either the policy of maintaining equilibrium will have to be abandoned or the Council’s programme will need modification. The modification suggested by the Mayor is that this three-year programme should be spread over another year, making the expenditure cover four years. This would about meet the case if the City is not again called upon to make extensive provision for the unemployed. The new money required up to 1931 for street-widening is scheduled at £300,000 out of an inevitable future expenditure of £607,932. This sum, with the street-widening loans of £422,105 already raised, makes a total of £1,030,037, which is reduced to £752,913 by receipts from property sold totalling £90,122 and £187,000, the value of properties held. The liabilities for street-widening are sufficiently large to justify the Mayor’s advocacy of a halt in this direction. That one street at a time should be widened and properties acquired in so doing sold before the next street-widening scheme is undertaken is a policy which natural prudence dictates. The efforts of the Council in the past have been too widely spread. There is more than onehalf finished street-widening job calling for completipn. A matter with which the Mayor did not deal is the heavy list of properties held by the City Council. These properties are book assets, but in reality they represent largely a loss of' rate revenue as well as a heavy dormant capital investment. While endorsing the Mayor’s policy of maintaining the equilibrium of £4O per capita and welcoming his statement on the City’s finances, a further statement would be very useful.

That statement should set: forth the total value of land and property held by the Council, also details of that which is revenueproducing and that which is not. The loss of rates involved in the holding of these redundant assets should also be assessed. This statement .would probably reveal that a realisation scheme would be of material advantage to the City treasury and of benefit to citizens generally.