RATEPAYERS' ASSOCIATION

Evening Star, Issue 12625, 3 October 1905, Page 8

RATEPAYERS' ASSOCIATION

THE CITY FINANCES. A special meeting of the Dunedin Ratepayers and Householders' Association was held at the Palace Hotel last evening. Mr J. Milnos was in the chair, and there were a'so present Messrs G. Mackie, F. W. Croxford, J. Connor, J. Small, W. Asher, J. White, B- Greenwood. W. A. Newman, A. Megget, J. Neil, and Brinsiey. Cr Lawrence attended ss a visitor. The Chairman explained that this was an adjourned meeting, and that its purpose was to hear a paper on the City finances, •which Air Small would read. Cr Smull then read the following paper: — I am sure the ordinary ratepayer has cause to say, as he wanders over the numerous and elaborate tables that city councillors »ro generously supplying 'him with: " Where do we stand?" On. the face of it, there is no apparent reason why the financial status of the City should not be told in a few words and bo familiar to every intelligent citizen. The fact, however, remains that long') involved, and seemingly urterminubie tables are presented, none of which agrees with another. The result is impatience and despair. Yet, as a matter of fact, these statements do largely agree. Their differences are mainly attributable to the point of view taken by the critic, and discrepancies are inevitable in all undertakings involving the expenditure of large snots of niooey spread over a long period of time. Where we, as a City, have erred is in entering upon enterprises—drainage, tramways, lighting and power, etc.—without in the first instance having the , remotest idea of how much these schemes were ultimately to cost. We get an estimate, decide upon, a work, commit ourselves beyond recall, and then, and then only, awaken to find tliat our original proposal has brought with it responsibilities that, in the first instance, had we but known, would never have been assumed. However, Dunedin, wisely or unwisely, stands pledged to certain investments, and those we must see through. The question for us now is not "How can wo get out?" or "How will they eventuate?" but "What are they to cost?" and " When will they be completed ?' It is to the first of these latter—" What are they to cost?" —and to the possible savings to be made in our municipal finances, that I desire to ask your attention. I shall not overload you with figures. .1 propose to show that there is not a very great or very real difference between my own views and Cr Loudon's, nor between Cr Loudon's and the mayor's. At present the citizens are pardonably puzzled. They do not know their civic bearings, and it is to .elucidate these by reducing the many figures submitted to a few simple tables that I ask your attention this evening. First let me deal with what the City may possibly save as a result of the reissue of part of the loans falling due in 1906 and 1308. I will treat solely with those known as municipal loans, and that for the sufficient reason that in these loans, and these only, can what we term municipal savings be effected. The othersgas, abattoirs, tramways, water, power, and lighting—are trading concerns, and as such stand on their own bottom. If they do nut pay interest, then we ought to drop them; if they do pay, then they do not enter into our calculations ; if they more than pay interest and working charges, then the surplus should be devoted to reducing the price of the commodity, whether tt be gas, or tram rides, or water rates, to the community. On the 28th July I stated, in an address to your Association, that the annual saving to the City, as a result of the reissue of the balance of loans falling due in 1906 and 1903, from all sourcts would be £13,227. This statement still holds good, but included in this amount was £I.OOO from the gas and £3.429 from the water loans conversion. For the reasons above stated, I Ehall deduct these items from my total, and take the savings that will be effected in the Municipal Department only—that is, £8,788. This, then, is the amount I propose to treat in my comparison with the figures in Table 13, published by Cr Loudon. That gentleman, rn two other of his table?, has mixed all the loans m all the departments in one grand total; but, as I have said, the City's purely business investments must be considered apart from our municpal work. It is for the latter we pay rates, and it hj there ire must economise. The former, from a rate payer's standpoint, need not trouble ui. They may prove good or bad ventures, but at this stage, and judged by the history of the abattoirs, gas, and water departments, we are entitled to say they will, at the lowest, pay w»rk : ng expenses and interest. Very well, then, 1 think that the City can save in its Municipal Department only rn the ye.trs 1906 ond 1908 a sum of £8,798. and Cr London says that we ought to save £9,558—a. difference of £760. Where, then dees the difference arise? It is not a largo amount —cnot so much as has been wasted with a light heart before now—but it is worth inquiring into, even if it be but to show bow difficult it is to get at our exact status financially. Cr Loudon has, I think. taken the amount of interest payable on the municipal loans during the present year nt the figure sot down in the calendar published by the City Council—namely, £15.523. He has also taken the overdraft at £90.000, the interest, at 5 per cent., on which is £4,500; a total of £20,023. On' this sum ho bases his calculations. But the figures given in the calendar are not correct. Instead of there bekigi £6,405 of interest, and a sinking fund payable on the £91,500, there is only £4,804 payable, to which has to ho addud interest artd sinking rmid from 31st December to 31st March next, on that portion of the loan (£27,631) 1 which will have to be renewed, say, £283. or a total of £5,087. The difference, there-1 fore, in the interest payabJo by the City and that stited by Cr Loudon is £1,318, I so that, instead of our annual changes for the current year being, as he states, £20,033, they are only £18,605. The effect of thi3 upon the total annual saving in 1908 is as follows:—In 1908 Cr Loudon says that the interest on the municipal loan of £109,958 will amount to £5,498, interest on £IOO.OOO overdraft £5,000; total annual charge, £10,493. That is to say, in 1908 the City, according to my correction of Cr Loudon's estimate, will pay in interest and 'sinking fund £10,498 where it now pavs £18,605, a saving of £8,107, and not o"f £9,558. Further, I calculated on an overdraft of £90,000 only, Cr'Loudon on one of £IOO.OOO. Why, I do not know, as we are pledged to keep the overdraft down, and should not allow it to grow to the larger sum. If, then, we deduct the 5 per cent, on the £IO.OOO allowed for in Cr Loudon's annual interest charges, his estimated saving and mine will be found to differ bv less than £2OO. Whether the citizens will Toap the l.cnefits of the.-e concessions and the annual interest and sink ing fund reduction of £8,600 I cannot dogmatise; the issue is not in my hands I can only direct your attention to where the saving is to be made. —Tables B and C I will now deal with Cr Loudon's Tables B and C Tbesa apparently show that the saving in interest and sinking fund to be effected in 1908 will be reduced to £7,737, bat winch, if the correction I have indicated above is made, would be further reduced to £6,419. These tables, if taken ai merely showing our total present liabffity and our liability in 1908, are valuable, and will be convenient for reference, but'that tbey show the benefit the ratepayers will'derive in the way of relief from mtezast and smiking fund in 1308 I cannot admit. The faEacy—to there is one underlying CrLoudonfe methods—is this: If the anneal charges be txw£6O.do4, asperTaJbto B, and if we borrow, as he suggests in Table % £50,000 for gas, £119,000 for

' added to the hank overdraft, it is dear that no comparison, con be instituted between the two tables. "We -nrnatnrst debit Table B with the interest on these sums—i.e., £9,500 charged by him in Table C. That is, you cannot assume that tbese loans wiTl only be a liability two years hence, when, in ::U probability, you will be paying interest on them in two months from now. Therefore, the difference ia 1908 between the interest and sinking road charges and those we shall shortly be paying wiH not be £7,737, but But of course j these tables, even, when put in proper foran, are misleading, because they compare re-venue-earning departments with purely municipal ones. The interest on gas and tramways should not be a charge upon the City, as there tobies assume it w33 be. It should be paid out of revenue. All we con fairly deal with in this connection is, as I have taid, those moneys dealt with as municipal. I have condensed these tables, and have arranged the loans under the headings of the different departments to which they pertain, so that you may be able to deal with them more readily in any discussion t Department. ,-e'E-i .-a Eh %s 3.S -J 5 Municipal „ _. £252,725 £109,999 Water _ _. ~- 268,300 213,862 Gas „ ... 100,000 93,891 Abattoirs _ ... 11,000 11,000 Trams, incrodrng street-widening ... 299,900 299,900 Waipori, including items to be taken over from trams... 72,500 182,500 Caversham ... ._ 24,600 24,600 South Dunedin _ 26,400 26,400 Overdraft 70,000 100,000 £1,125,425 £1,061452 And now let ute for a few minutes compare His Worship the Mayor's estimate of the ultimate cost of the electric -tramway !<nd elsctric power and lighting supply with that of Cr Loudon. It b not necessary to show how these two services have, from one and another, grown to so great an extant that their original advocates would not know them. The fact remains they have grown, and that the ratepayers " have to nurse the baby,'* or, rather, I should say, the "twins." The main question at this juncture is "What will they cost?" For purposes of comparisan I have placed the est innate of the mayor and Cr Loudon in parallel columns: il "if 2 S "8 P 5 Trams, including Lee Stream and £12,750 for street-widen- • ■ ing ...£239,642 £299^90 Power and lighting departments, in eluding £22,048 taken over from trams ... ._ ... 171,834 163*837 Municipal account for street-widen-ing ... £468,726 £482,355 ■ How, then, do we stand? Well, you have a possible saving of £8,600 a year on and after 1908 in your permanent charges; you have a tramway service that will nave covt you anything between £280,000 and £290.000; and you have a power and fighting service Uie first instalment of which will have to be debited with anything between £170,000 and £180,000; and you havo to sanction a gas loan of £50,000, and a power and lighting and tramway loan of £IIO.OOO. How the bare recital of these amounts affects you I do not know. To me tbey are somewhat disquieting. I trust that those of you who have given so much of your time to a consideration of these important matters wul continue in the path of well-doing. It is not necessary that we shou'd be negarded or make ourselves either mtermeddlers or busybodies, but it is in the interests of the community and of ourselves, as ratepayers, that a constant and intelligent supervision be given to oil matters entailing large demands upon our civic credit, and -upon the individual ratepayer's responsibility. It was propc-jed to grant permission to Cr Lawrence to take part in the discussion, but

Cr Lawrence said that he would not take any part. In the first place, he would want time to consider Mr Small's paper, and, secondly, he held that it was not right for a city cotmcillor to go there and sit in judgment on himself. Mr Neil asked Mr Small if he was convinced that the City Council were dealing as economically as they might do with the works they now had in hand? Take tramways, for instance. It was stated that the system would never pay under present mismanagement. There weTe six men sweeping the lines when there were machines that could do all tho work. Then the overhead gear took a horse and a man more than tho Telegraph Department's gear. F".-tber," he questioned the need for the starters and the inspector of permanent way. He also referred to the) abattoirs, and repeated his question. Tho Chairman explained his view of what the discussion should be. One of their planks was economy. It was stated in Cr Small's paper that he believed the tram-■n-ays would pay. They should concern themselves with the municipal account. He wanted to know why the municipal accountwas debited with the expenditure on street widening. What they held as an Association was that each municipal account should stand on its own bottom, and bear loss or gain as it came. Or Connor said that the item for street widening was cbanred to municipal account because it was a city improvement, and was not merely intended to let the trams through. " He thought it was right to so charge it. Mr Asher asked Cr Small if be thought the City Council were carrying out their cWtion pledges to Veep down expenditure, and whether tbey were not increasing their liabilities? Cr Small, in reply.said it did not seem that Mr Neil's qrtestion was pertinent to the discussion. He could assure the last questioner that the councillors (and especially the mayor) were doing all that they could* to keep expenses down and live within their means. The Works Committee when thev took office found that their predecereoTS had overrun ,the constable to the tune of about £I.OOO. This tbey were now trving to pull down. Mr Asher suggested that as these figures were so massive they should adjourn the discusion on tho city finances until they could obtain possession of the audited city bal-ance-sheet. Mr Neil seconded the motion, which was declared lost on the voices. The discussion lingered for a white, till Mr Brinsiey told the meeting that as this was a matter about which they knew very little, thev should adjourn the meeting and take time for consideration. He moved that as there seemed to be confusion amongst them in regard to the figures they adjourn trip meeting till next Friday week. Mr White seconded the motkm. Ct Small referred to the statements about city councillors being present at these meetings. He reminded those present- that it was distinctly stated at election time that any members of the Association who might be elected were to continue members of the Association, or, if objection were rawed to that, that they should resign. As to himself, it didnt matter much for the short fame he would be in the Council. He had no need to curry favor by going to these meetings, more especially as he had not got the mavoral ehaif hi view. Mr Aflhcr moved as an amendmentl that the whole Question of finance be referred t> a committee consistJutr of the cboinmuv, secretary, treasurer, Messrs Megget, Smau, and the mover, and that .the meeting be adjourned, as already suggested, to grw them time to consider the matter. It was suggested that the city councillors should be left off the comnwttee. Or Connor said that so far as the majority of the oounc3lors were concerned the Ask jcaes&ft jdtt«.JWt„JiaK jwdcjpw

suggested was "Hove we got the money?" He was sure that the present economical fit would last as long as there was need for it, and, ohirf of all, the mayor was earnest in this matter, and daseftrfea all crecSL. The aaMDdment wul 'then put. and lost, and the motion carried". !'" '"• r *