CUT FINANCE

Evening Post, Volume CX, Issue 135, 4 December 1925, Page 9

CUT FINANCE

REVIEW BY THE MAYOR

REASONS FOR ABNORMAL EXPENDITURE

REFERENCE TO RATING SYSTEMS

The order paper placed before city councillors last evening was an unusually heavy one, and conseqently the consideration of the Mayor's report upon the state of city finances had to be adjourned j to a special meeting to be held this afternoon. In the course of his report, which appears below, Mr. Norwood hag suggested the advisability of giving consideration at some future time to the question of a departure from the present system of rating upon unimproved value. In putting before you the re-cast estimates with the recommended allotments for each department of the i council's service, eaid Mr. Norwood, it may be helpful if I should draw the committee's attention, to several matters relating thereto. I assign three main reasons for the abnormal expenditure during the earlier part of the current year. They are as follow:— i 1. The cessation of work of tho several paving gangs for tho winter period. 2. The capital expenditure on ■works authorised last year and completed this year. 3. The abnormally wet season which caused slips and wash-outs and rendered valueless the top-dressing on many of the streets, and which was done at considerable cost to the council. In respect to the cessation of work or the several paving gangs for the winter period, some of these men were regarded probably as too valuable to lose, in view of the paving operations which must start in the early summer, and under this heading the wages of 56. men were transferred to general account, and in a period of nine weeks £2000 was expended for wages alone, and, in addition to this, the remaining staff held under loan account provided service on street works account to the extent of £4215 for materials services, made up as follows :— Footpath repairs £2639, general supplies £1576. In addition to the above work done by highway construction, chargeable to street works, was approximately £1357,. while work performed by street works loan was £2631, and there was a further expenditure charge for pavin j work not included in tho loans, but paid for this year foi" pavin; the intersection of Tavanaki street and Courtenay place and Elizabeth street extension ; these items, together making up £733, giving a total expenditure under all the headings included above of £9629. I do not wish to convey that there is any evidence that the general account did not receive value from the services of the men taken over from the paving for work done by the paving department as outlined above. I merely assume it my duty to put forward th« facts because mainly the expenditure was caused by the availability of the men rather than by the specific order o* the council. It will be remembered that when the reserves estimates for the current year were before the committee and the capital items amounting to £9097 were cut out, in recommending the Finance Committee to delete these items, I was without guidance that the works had already been commenced, and had to be completed this year. The total.amount under this heading after allowing for the unexpended reloan account > amounting to £5925, As the extra expenditure necessitated by wash-outs andy the excessively wet season are necessarily mixed up in the general account, I have not made any attempt to estimate what it represents, but it will be obvious to the committee that the amount is considerable. t "Referring generally to the revised estimates before you—(these were not supplied to the Press)—l may say the various means of income available to ! the council have been carefully investigated and the figures representing i each particular entry, both on the ii° conic and expenditure side, have been carefully cheeked by Mr. Collins (city treasurer) personally, and the responsible officers of each, department have been taken into counsel. ■ "The charges set out .represent, in my opinion, the maximum that can be allowed, and provide for all the essential works to the end of the year. Two thousand five hundred pounds has been paid this year for the Soldiers' Memorial, and provision is made for a further payment of £2500. It may not be necessary to find the latter £2-500 this year, and while, generally speaking, the figures produced tend to ,tho conservative side, I may warn the committee not to expect better results than thoso shown, which leave a net credit balance after all payments are accounted for of £1628. "I have omitted from the figures before you the accrued credits from the several trading concerns, and services performed for the Technical College and the Wellington Gas Company, amounting in all at this date to £.3379. These amounts, as they are not included, will serve to strengthen j and assure the figures. ESTIMATES AT COMMENCEMENT OF YEAR. "It is, I think, fitting that I should mak^reeoinmendations relative to future policy and the estimates of the council, and in this regard I would' strongly urge that in future the estimates for the ensuing year should be prepared and ready for confirmation at the first council meeting in the NewYear. I am of opinion that the system in force of passing the estimates several months after the year has begun is not sound, and does not lead to the economic working of tho council. "If my. recommendations are approved, the rates would be struck earlier, and a considerable saving would accrue, inasmuch as the council would lessen its payment on overdraft, and there are other reasons too cbvious to mention supporting this recommendation. "Should the rates be raised next year, this is a matter which can reasonably form the basis of a complete report in itself, and I only intend to deal briefly with it. It must be quite obvious to councillors who stuciy the position that our system of rating on straight-out unimproved value leaves something to be desired. Every fresh building which is erected require.? of the council in. all its ramifications greater service, and yet, uncier our system the rates remain constant, with tho exception of special rates, which arc not creditable in any wny to general fund. ''Thy cvtfltsncr. .lielorv Illi iftdltilUa.

ship at the present time to raise the rates, and having looked carefully uito the departmental working generally, I am of opinion that with prudent management and using our sources of income to the maximum, we can go on next year without raising the rates, as we are not during the present year spending loan moneys to any extent on non-reproductive works, although the policy laid down under the 1920 loan schedule provides for much of such expenditure, the extent of which I propose to make the subject of a special report later. "The total revenue of the council from all sources creditable to the general fund amounts to £504,423. This may be augmented if satisfactory sale can be secured for a considerable amount of more or less valuI able plant which is not likely to be of any future service to the council and which would depreciate in value if held. I have, therefore, instructed tho City Engineer to have a clean-up of accumulated scrap and plant, which is of no further service to the council. WISDOM OF PAVING POLICY. "The wisdom of the council's policy in pushing on with all possible speed the bitumen roading work of the city should be apparent in the | street works cost of next year. I have had the figures taken out of the actual expenditure and maintenance for the 1924 year upon tho special area which it is estimated will be covered with bitumen by the end of our present year, and this works out at approximately £5011. It will not be possible, of course, to save the whole of this amount, but the saving, whatever it may be, will be welcome in our next year's estimates. "I havo purposely omitted from this report references to loan expenditure and trading concerns, but I ! will bring before the committee the matters relating to trading concerns and loan policy in turn. "It has been customary for tho council each year to review the salaries and staff rearrangements. This year, with a view of preventing anomalies with the different departments, I requested a special committee consisting of the general manager of tramways, the City Engineer, Town Clerk, City Treasurer, and City Solidtor, to confer and to recommend increases for the, year, and to remove anomalies if they exist between departments. lam assured that the schedule provides the same treatment for men of equal rank in each of the departments. I have avoided myself personally taking a hand in tho work of these recommendations, believing: that the combined wisdom of these officers would give better results."

The debate upon staff salaries will also take place this afternoon, if time permits.