DRAINAGE BOARD'S ESTIMATES

Evening Star, Issue 21099, 11 May 1932, Page 3

DRAINAGE BOARD'S ESTIMATES

The Town Clerk has drawn up the following report on tlio estimated income and expenditure of the board for the year ending March 31, 1933. The expenditure is based on similar lines to those of last year, and here we got the full year’s benefit of the 10 per cent, cut in wages and salaries. This is, however, offset by a sharp rise in the charges on borrowed money. The interest charge rises from £53,500 paid last year to £56,000

estimated from this year, while sinking fund absorbs £9,430 this as against only £8,230 last year. These two charges, therefore, , show an increase of £3,700. This is, of course, due to two reasons:—First, to the addition of loan liability to meet the cost of the capital works now in progress ; and, secondly, to the fact that the renewal ■money is costing more than the maturing loans which they replace, both for interest and sinking fund. The total estimated expenditure is therefore set as £84,283. The income to cover this expenditure on last year’s rating basis would show a deficiency of £5,838, and if the account should call for a balancing process it would be necessary to provide that sum as additional income, which could have been clone only by an increase in the drainage rate of one penny in the £. That necessity is intensified by the fact that the decline in the city valuations deprives the board of £2,713 less income this year than it received last year from the same basic rate. However, the legislation now before Parliament containing proposals for a reduction in the interest on internal loans comes timely. Should the proposals pass into law [they have been passed] the Drainage Board will get a relief of about £4,000, and that sum will meanwhile obviate the necessity of increasing the drainage rates. EXPENDITURE OF BORROWED MONEY.

I recognise that it 'is futile to attempt to cross bridges before wo come to them, but the increasing demand for standing charges bn borrowed money, to which I have hero directed attention, points the moral and seems to prove quite nnmistakeably that the rate of expenditure of borrowed money calls for a careful review. The loan expenditure, even on the curtailed programme recently decided upon, is not being covered by the sale of debentures, but that difficulty might easily bo provided tor temporarily if there appeared any reasonable prospect of providing the standing charges on the expenditure without resort to an increase in the drainage rate. The trend of the rateable valuation of the area must not bo excluded from any such consideration.