CITY FINANCE.

Evening Post, Volume LXXXIII, Issue 96, 23 April 1912, Page 8

CITY FINANCE.

• MR. BALLINGER AND MR. BIBS. lv THE EDITO*. Sir, — I 6houl'd like to refer to come of the statements made by Mr. Biss, as published in eonncLtion with, overdraft and depreciation. In your paper of Saturday, 20th. April, he states as follows :—: — "The figures at the end of the year are as follows : Overdiaft district fund; acccunt, £20,146; leas credit balance in the tramway, electric light, and accident funds, £1b,137; .leaving a net debit balance at the bank of £4,009. It is not, however, correct to set the credit balance of the tramways, electric lighting department, and accident funds against the debit balance in the district fund account, as there is no connection whatever between these accounts. As there is a large sum due by the electric lighting department, namely, £20,000, to the general fund, beiug repayment of an advance made some years ago from the district fund," etc., I consider that Mr. Bias has a wrong conception of this account. ! When I was elected to the Finance Committee, after Air. Biss retired from the council in April, 1909, I enquired if , we paid interest on th© full amount of overdraft on district fund account, and ] 1 was informed by the- Mayor that an arrangement had been made with the I bank to allow a set-off of the credits in the other accounts. This may not be correct from an expert- accountant like Mr. Biss, but I submit it is a. splendid arrangement for the city. According to Mr. Bis 3, ho would pay the bank full interest on the £20,146, which ai 5 per cent would figure £1017, instead of 5' per cent, on £4009, which is £200— a distinct saving to the city of £817. This sinn ohould, of course, be credited to "the i departments that had the amount at I credit, and th© electric light department should also be charged interest on the £20,000 advanced come years ,ago from the district fund. The Tramway Depreciation F4ind. — Mr. Biss is again making mis-statements or blunders. He is reported to have said last night: — "As a matter of fact it was due to Councillor Shirtcliffe and himself that the Tramway Committee consented to establish the depreciation funds." As Councillor Shirtcliffe did not join the council until April, 1907, he certainly had nothing to do with 'it. The following again are the facts:— l moved in this matter on 7th May, 1906. The following is a copy of the minute of the Tramway Committee; — "Councillor Ballinger moved ' that the depreciation be £10,500, as per the Electrical Engineer's report of 2nd February. — Carried." I should like to add a few words further in tef erenco to interest on depreciation and accident fund. The following is an extract from the Tramways Committee of sth April, 1909 : — "The corporation auditor, in an opinion, stated that interest should be charged on so much of the depreciation fund as had been used on capital expenditure, at the rate of 4^ per cent., to be invested on deposit at a bank, the interest on such to be reinvested, and also that interest should be charged on the accident insurance fuad at the rat© of 4-£ per cent." Councillor Shirtcliffe moved that the auditor be instructed to charge the tramway service with interest on depreciation and accident fund at the rate of 4£ per cent. The Mayor moved as an amendment that the matter stand over. Ayes — Mayor (Hi6lop), Councillors Fletcher and Hindmarsn. Noes — Councillors Ballinger, Shirteliffe, and , Smith. The Mayor gave his 1 casting vote to the "ayes," and the motion as amended was therefore. carried. Note. — Mr. Biss was the missing member of this* committee, or we' should have carried the original motion. At the next meeting of the Tramway Committee of 17th May, 1909, after Dr. Newman had been elected, the matter was again brought up. The following is the extract :—": — " Present, the Mayor (Dr. Newman), Councillors- Ballinger, Fletcher, FraJt, Hindmarsh, Shirtcliffc, and Smith. Interest on depreciation fund. — Council- | lor Shirtcliff© moved that interest be j charged on the tramway accident insurance fund and on the depreciation fund at the rate of ' 4 per cent, per annum. Seconded by Councillor Ballinger and lost." I should like to have more timo to continue this- interesting subject. Trusting you will be able to publish these actual facts iv this evening's paper. — I am, etc., THOMAS BALLINGER. Wellington, 23rd April. THE REPLY OF MR. BISS. Replying to the above letter, Mr. Bics said : — "The. more Mr. Ballinger writes to the papers ihe more he seems to flounder. I still maintain that the credit balance belonging to the tramways, electric light, and accident funds must not be placed against th© debit balance of the general rates account.' The bank j may take these credit balances into account when charging interest on the overdraft, but that does- not mean +hat tho credit balances belong to the general account. AVhy doesn't Mr. Ballingor take ezpext advice or consult the city auditor before he makes these rash statements? Surely he does not suggest I that a fund set aside for accident claims ' is available for a debit balance of the general city fund? "The rost oT the letter does not concern me, but rather confirms all 1 have said. I am not complaining that no. tramway depreciation -fund has been created, but rather that that fund has not been so regulated as to provide i liquid funds tor replacements when required. It also conth-ms what 1 have said many times: thaf. though resolutions have been passed the chairman of the Tramways Committee (Mr. Smith) has not seen that those resolutions have j been given effect to. That is my complaint iv many .other instances. I extend aft invitation to Mr. Ballinger to attend my meeting at the Concert Chamber of tho Town Hall to-night, when I shall be willing to discuss the wlic-le subject with him on the plat- j form." • '