CITY FUNDS

Evening Post, Volume CXII, Issue 140, 10 December 1926, Page 8

CITY FUNDS

GOOD TIMES IN 1933

POLICY AS TO TRADING

PROFITS

REMARKS BY THE MAYOR,

The present and more rosy future financial position of the City Council, the not quite definitely decided policy of the council in regard to trading department profits, and the manner in which district associations could assist the City Council were points touched upon by the Mayor, Mr. C. B. Norwood, while speaking at the annual meeting of the Civic League last evening.

Many of the associations, said Mr. Norwood, had assisted materially with constructive suggestions, and others had assisted directly by taking such steps as enabled the council to carry out works at much lower cost than would have been possible had that assistance hot been accorded. Any association which directed its energies towards the betterment and beautification of its own area did good work for the city, but each association had also to consider the soundness of its claims in correct perspective with city finance and the demands of other areas. To those associations which had helped themselves and at the same time the council the Mayor and councillors had a friendly feeling indeed.

LOANS REARRANGEMENT.

During the past year the city's finances had been largely rearranged, a total of about £330,000 being affected, and in that respect it was particularly gratifying that Wellington had been able to raise her loans at £5 8s 4d per cent., inclusive of all charges, terms more favourable than were secured by Auckland, Christchurch, Sydney, and Melbourne, while the Government was itself paying 5J per cent.

TO THE WHOLE OF THE PEOPLE.

"As far as the trading concerns go," continued Mr. Norwood, "here is a big matter of policy, and the councillors and I myself are not sure just what to do to bring about the greatest ultimate public good. The present policy concerning surplus moneys which must be available from trading concerns is that they may not be devoted to any work wiiich does not benefit the city as a whole. They could not be devoted to rounding off a corner at Island Bay or putting down a footpath at Wadestown, for instance. "Those surplus moneys belong to one or two classes of people, either to the ratepayers or to the users of the facilities provided by the trading departments, but those classes are not materially different. If these funds belong to all the people of Wellington, then it is obvious that they must be spent only for the purpose of serving the whole of the people." In other centres, continued Mr. Norwood, it was tho general practice to devote trading department profits to city works; the trading departments of Dunedin, for instance, proposed to allot £40,000 for the erection of a town hall and to the relief of rates.

THERE MUST BE PROFITS.

"Unless there is a profit upon, to mention one, the Electricity Department, of something like £30,000," said Mr. Norwood, "we are running so closely to a loss that the slightest fraction of change in costs would put £20,000 upon the other side of the balancesheet. Wo must aim at a small percentage of profit, and when the volume of business is big the profit, even though the percentage-is small; becomes very considerable..

"If the city's trading concerns were in private hands, I suggest, they would be regarded as absolute failures were there not funds amounting to at least £.100,000 for distribution among shareholders."

THE LUCKY COUNCIL OF 1933,

Wellington was at a difficult stage of development, continued Mr. Norwood, for the contour of the land presented many engineering difficulties, and the city had now grown over such an area that it called for the services of a city of fully 250,000 people, though there were but 100,000 to pay for those far extended services. Commencing in 1928 and on to 1933 several of the old loans would run out, and, owing to the repayment of parts of those loans by sinking funds, there would be an annual saving of about £46,000. The council that was then in office would be a lucky council indeed, because it would be able to place big works in hand without necessity of raising the rates, for £45,000 would pay interest upon a very large sum of money. The Mayor was accorded a hearty vote of thanks for his address.