MUNICIPAL FINANCE

Evening Star, Issue 25168, 6 May 1944, Page 8

MUNICIPAL FINANCE

ESTIMATES FOR 1944-45 SLIGHT RATE REDUCTIQH RECOMMENDED The estimated receipts and expenditure of the City Corporation for the year ending March 31, 1945, will come before the meetin" of the council on Monday night. A report of the Finance Committee includes a minute by the chairman furnishing dataued information regarding the estimates generally and sets out the recommendations of the committee. FIGURES FOR LAST YEAR. The estimated figures for the year ending March 31, 1944/ were very closely worked to. Excluding an amount of £3,000, representing proceeds ot a property sale which was not budgeted for, receipts showed an advance over the estimated figure of £2,949. On the expenditure side there was a difference of only £125 on the right side between the estimated outlay and actual expenditure. The salienl point to be noted in connection with the year's operations is that, under present-day conditions, revenue is non-elastic and the normal increment from many sources is not in evidence. The need for holding expenditure; which continually tends to rise, within available revenue limits, is therefore of primary importance. STATEMENT FOR 1944-45.

The draft statement for 1944-45 was prepared on the basis of the present general rate of 2s 3d in the £. On that basis the gross, estimated revenue for the year was shown at £278,771, or a small advance of £1,082 over the actual receipts for last year. Transfers from the trading, water, and municipal departments were adjusted where necessary to round sums in jieu of odd amounts as hitherto. This involved a reduction in the electricity department contribution from £20,484 to £20,000. and, in thu case of the municipal department, from £1,550 to' £1,500. The total contributions from the six departments concerned amount to £33,999, or slightly more than the product of a rate ot s£d in the £. On the expenditure side the draft showed an estimated outgo of £3o4.4s4—that is, £29.550 in excess ru the total vote for last year, and £25.683 beyond the anticipated revenue for the incoming year. There were further requisitions to consider from the Works Committee and other sources, which were not included. in the draft, which in-. vo.ved a further/provision of approximately £4,000. Under' the heading of special war expenditure, which has constituted a special demand durirg the war years.: thev sum ssked for was £6,800 -■--,-.;

Hie Finance Committee was, therefore, called upon to eliminate a deficit of £25.683 in the draft statement, and there was no option but to. effect reductions' in expenditure items in those cases where such a course appeared necessary, having due regard to the available'income.. That has been done, and with a small, adjustment l in the normal estimates a balanced budget has been obtained at a total of £279,271V In the case of the spending' branches "it lias been found possible, despite the V cuts " in their requisitions, to provide .them with a larger vote than was found possible last rear. In the opinion of the committee the proposed votes should be regarded as fully satisfactory. HOSPITAL 80ARD'S DEMAND.

Last year,, when the estimates were being dealt with during the month of April, information from tne Hospital Board was to Jhe effect that the board's demand would increase by 12£ per cent., thereby raising the city's contribution to £54,986. The board's statutory demand in the following August, howe\er, provided for a contribution of £45,193 14s, the Government having in the meantime provided further financial assistance to hospital boards. To what extent the city's quota was affected by the increased State contribution is not, known. The position was fully explained'in council last August, and ah intimation then given that the surplus, created in the hospital raiing account would be returned to ratepayers this' year by way of reduction in rafe. The surplus'amounts to £8,515.- 1 The hoard's demand for the incoming V6ar will, it is understood, amount to £50,600, or £5,402 above last year's 'figure. On that basis, and allowing for last year's surplus of £Bislb, it will he possible, to find the hospital levy by the product of a rate of 7d in the £—that is, 2d less than last vear. That, will clear up the present surplus in the hospital rating account, and should enable the account to come out just about square at March 31. 1945. CITY ABATTOIR. The. introduction of meat rationing has had a marked, effect on the abattoir. business. Last year there was a surplus or £1.370. but for the incoming year the dratt statement shows an estimated deficit ot £3.126. The position is further complicated by reason of the- substantial incursion into the market of our abattoir district of competition from the freezing works, which has (inter alia) the effect of adversely affecting the business of the abattoir slaughtering 0 contractor. The matter has. in the meantime, ' been referred to the General Committee, which, no doubt, will represent the facts to the Government. EMERGENCY PRECAUTIONS EXPENDITURE. The vote for emergency precautions is set down in the draft statement at £2,500, which, with the assistance of the Government subsidy, should be sufficient provision for the incoming year. The net cost to th« council at March 31 last of the Emergency Precautions Service, after allowing for Government subsidy and contributions from other bodies in the F..P.S. district, was £27.663 3s Id. It was originally proposed that this outgo should be recouped by loan authorisation, but as the Loans Board limited the period for repayment to five years, it was considered inadvisable to burden the genetal account with .charges for interest and funking fund over such, a short term. ' It:' is recommended, therefore, that the amount.be written off to the credit ledger balance' of the general. account. WATER DEPARTMENT. The statement for. the 1 water department is based on the!same rates and charges as last year. Heavy, expenditure, is, contemplated for the incoming year, the amount proposed being £19,795 abive last ye*r'» estimate. A review by the committee ot the draft figures indicates that, the proposals will absorb practically the whole of the department's revenue for the year. Under the circumstances it appears advisable, and the committee recommends accordingly, that, while the draft may stand in its present form, no capital expenditure should be undertaken without specific authority being first obtained from thn council ELECTRICITY SECTION. The estimates for the electricity department indicate a deficit of £5,231. The statement is. however, drawn on conservative lines and there appears to be no reason to doubt that the outlay will' be well within the income at March 31, 1945. Last year a deficit of £13,435 was budgeted for. but the year closed with a surplus of £19,750. Capital expenditure out of revenue is set down at £9,100, and out of loan authorisations at £128,600, of which £IOO,OOO is on. account of the Mahinerangi Dam Construction Loan TRANSPORT SECTION. The transport department's statement calls for brief reference only. In electric section an estimated surplus of £3,600 is shown. Last year's figures, after allowin" for the special contribution ot iIO.UUU to° renewal fund, disclose that expenditure was £8,443 below revenue. The contribution to renewal fund for the year 194445 w set down at the normal figure in terms ot the decision of council that any furthei provision 'would stand over pending consideration of Sir William Goodman's report. The estimates for the cable section provide for an outgo of £950 beyond the anticipated revenue, the figures generally bearing close relation to those of last. year. The motor bus statement shows a small surplus of £B6. GAS SECTION. The estimates for the gas department' provide for a balanced statement. Revenue is estimated at £1,460 less than last year, while the expenditure figures are higher by £4,350. The contribution to the municipal department remains at last year's reduced vote of £1.50U. THE RATES.

The Finance Committee recommends that tjje drafi estimates of receipts and expendi-

ture be adopted, and that the rates for 1944 45 be fixed on the following basis:— General rate. 2s 3d in £, as last year; water rate 9d in £. as last year; Hospital Board's rate, 7d in £. or 2d less than last year; drainage rate, sewered area, Is 3d in £, as la«t year; drainage rate, unsewered area, 7id in'£, as last, year; total rates, 4s 10a, as compared with 5s last year.