THE CITY'S FINANCE.

Evening Star, Issue 14040, 22 April 1909, Page 2

THE CITY'S FINANCE.

" A COMMENT UPON THE MAYOR'S CRITICISM. Cr.Small writes us as follows in re His Worship,.'the Mayor's criticism of his pub on the finances of the City: Tt was not, of course, my intention to enter upon any controversy in stating what I did. My figures were capable of proof or disproof, and as such I submitted them for what they were worth. Personally, I regarded them as a further illustration of the' need there is for the Council to live within its income. I then stated what I think the ratepayers ought to know—(l) that the expenditure I had exceeded the revenue by £10,407 for the year ended 31st March, 1909; (2) that there would be deficiencies' or. the next two years' operations; (3) that in the absence of reduced expenditure. these- deficiencies could only bo met by transfer of profits from th.G trading departments or extra taxation. His Worship has replied: "Oh, I will show you how we got £10,407 behind," which is entirely unnecessary, as 1 am quite aware where the money went, my concern being with why it went and with letting the ratepayers know that it had gone. The Mayor further seeks to lay upon my shoulders as ex-chainnan of the Finance Committee the responsibility for these deficiencies. All, therefore, T'have got to do is to show your readers that His Worship has failed to grasp the crux of the position, and that his reference to my personal responsibility will not bear the test of examination. Let us see. His Worship shows, on his own figures, that a sum of £2,349 was over-spent for the Year ended 31st March, 1909, after taking" credit for £5,058 of excessive expenditure and £3,000 that the City did. not receive from the Drainage Board. But if His Worship takes credit • for sums over-expended, he must debit himself with amounts which have not been expended, but which were provided for in the estimates. His Worship has forgotten or overlooked the fact that in the estimates for the year iti ques-tion-allocations were made for the following, part of which only was spent, the saving being as under:— City reserves £123 Abattoirs 596 Salaries ... 100 Insurance 73 Licenses 30 Brass bands ... 150 Free Library 1,668 Renovating Town Ha 11... 600 £3,340 This sura, added, as it must and should be, to His Worship's admitted deficiency of £2,349, a total of £5,689. Bub* this I is not all. The estimated revenue for the year was £65,814, or,' deducting the £3,000 not- received from the Drainage Board, £62,814. The actual revenue was £65.765. His Worship, therefore, must debit himself with £2,951, being the amount by which the actual revenue exceeded the estimated revenue.

Put in another way, the position is as 1 follows : His Worship's admitted deficiency... £2,349 Amount allocated, but not spent* ... 3,340 Excess of revenue- received over estimates ... 2.951 Total £8,640 It is not possible, I. am afraid, in view of the above, to accept as authoritative the statement of His Worship that the Citv has only gone £2,349 to the bad. On the contrary, my first figures were, str'cthspeakirig, a. net .estimate only. Had I wished to score points, wlu'ch would be out of place on a. question such as this. I could fairly have added to the sum of £10.407 by deducting the £3,000 due by the Drainage Board and adding the two items (see above) of £3,340 and £2,951, which would give a gross deficiency of £13,698. The position, it will be noted, is not satisfactory. We get all the revenue we estimate, but we exceed our expenditure so greatly that we are thankful for windfalls, and must resortto transfers from the trading departments to make both ends meet. Xor does His Worship deny this.- He accepts my deficit of £10,407 as correct, but- seeks to whittle it down by showing where it went, and. ho concludes by saying : "There is no getting away from the fact that precautions should be "adopted to more closely approximate revenue and expenditure, and in the future it will be the imperative duty of the Finance Committee to endeavor to correctly forecast same," which is a repetition of what I have all along I'een contending for, without, I regret, much success. —Estimates. 1907-08. His Worship says that there was a deficiency of revenue for the above year, during which I was chairman of the Finance Committee, of £2.677, or £338 more than last year, and he wants to know why. 1 am pleased to oblige him. The estimated deficiency for that year was £7,500, provided for by a proposed transfer from the water and gas departments of that amount. We, however, only transferred £6,000, and we reduced the overdraft, by £5,199, so that the excess over the revenue was £BBI. But as we also had tlie u-*e of £1,660 deposits, the total is £2,541 excess of expenditure over revenue, instead of being the originally-estimated excess of £7,500, which is a somewhat smaller sum than £10.407 for 1908-09. If His Worship continues to press the inquiry why there was in 1908-09 so large an unforeseen expenditure, my answer is that in the majority of cases the money should not have been spent. The committees should have been told there was no provision for these expenditures. Until this is donej and the estimates more strictly adhered to, the City will continue to get deeper and deeper into debt. I would mention, however, that I was not in charge of the City's finances during 1908-09. —Estimates, 1905-06. His Worship says that £22,000 was transferred this year, and asks why did I not call attention to it. .Again the' answer is simple. In the first place, the amount transferred was £25,737, not £22,000. as stated by His Worship; and in the second, I did call attention to the fact, in the columns of the ' Star' in a letter on municipal finance, that not only had all our municipal revenue been spent during that year, but that all the profits of the trading departments and £9,000 over and beyond had been spent in addition. Then, as now, I was preaching the need for living within our means, and then, as now. I was termed a pessimist. —My Estimates.— His Worship's final words are that mv lack of optimism has led me astray—wofully astray—in my calculations—e.g., the trams and Waipoi'i departments. •I presume this.refers to my saying that the tramways department would show a loss for the past year. This estimate was based on figures officially supplied, and ; f I erred, I erred in company with the traffic manager, who himself* placed the loss at over £I,OOO. In the electrical department I forgot my role of pessimist, and became nn optimist, with disastrous results. Taking the electrical engineer's figures, I counted on a profit of £2,046 for the past year, the result being a reduction of the amount standing at the debit of this account by £526 only. Optimism does not pay in estimates; —The Overdraft,— I do not wish to introduce the personal note, but perhaps I may be permitted to say that during my two years' term as | chairman of the Finance "Committee the bank overdraft was reduced by £13,961. Here are the figures: During ex-Mayor Lawrence's year, from ... ' ..."£92,438 ,io , 83,677 £8;761 and during ex-Mayor Loudon's . year, from .... .'. £83,677 to ; 78,477 t • J - • _ £5,200 Slaking a total reduction of £13,961