MUNICIPAL LOAN

Greymouth Evening Star, 11 January 1929, Page 2

MUNICIPAL LOAN

BOARD’S SANCTION SOUGHT.

BOROUGH COUNCIL’S DISCUSSION.

That the Council apply to the Local Government Loans Board for its sanction 1 t'b th A bbrx'b'Wing of £100,756, for thte putpbsbs of sewerage, drainage, wk't'dr 1 supply, works plant, ail'd street improvements. Moved by Cr. D. M. Robertson, seconded by Cr. T. B. Baty, this resolution was carried by the Greymouth Borough Council last evening. Cr. J. McGinley asked whether it was necessary to have the plans prepared' by thb' CotihciPs Enginedr checked locally,, or would the Loans Board check ttieiix. ~ s The Deputy-Mayor (Cr. J. O Brien), who presided, explained that the plans would be checked through and reported upon by the Public Works Department, and afterwards referred to the Loans Board. That was the usual procedure. In reply to Cr. R. J.. Williams, the Town Clerk (Mr. F. H. Denton) stated that no objections had so far been made to the proposed loan by the ratepayers. Cr. O’Brien stated that the Engineer suggested’ thirty years as the term of the loan. ..... “Too short,” was the opinion of Crs. Williams and Baty. “You have plant in it,” said Cr. O’Brien, “and plant won’t last thirty years. If you take everything into consideration, thirty years will be a fair term.” Cr. Baty: Do you mean to pay back the whole loan in thirty years?—Yes. “I think it is far and away too short,” said Cr. Baty. The Engineer (Mr. A. J. Fair maid) pointed out that the maximum term was only 36J years. Cr. O’Brien said that the plant would have to be renewed before the expiry of 36* years, and, if that period were fixed,”it would mean the raising of another loan for plant renewal. On the motion of Cr. Baty, seconded by Cr. D. M. Robertson, it was decided that the term of the loan be thirty years. ~ m In reply to Cr. McGinley, the Town Clerk stated that the Council’s present indebtedness, in round figures, was £lOO,OOO.

That the rate of interest be not more than 5b per cent., was moved by Cr. Robertson ahd seconded by Cr. Baty. Cr. McGinley: Can we not put the whole of our indebtedness on the market and make one loan of it, at 4S per cent. Five and a-half per cent, seems a lot of money. .

Cr. O’Brien pointed out that the motion stipulated interest at not more than 5* per cent. If the Council could get the money for less, it would do so. Sir Joseph Ward had stated he could borrow at 4* per cent., and lend at an additional quarter per cent. It would be the duty of the Council to see if the money Could be secured for less than 5b per cent. Cr. G. Perotti asked whether the proposed loan would result in doubling the rates.

“No,’ replied Cr. O’Brien. “In some cases, I think, it runs up to 30, 35, and 50 per cent.” Cr. Kent stated that the Town Clerk had taken Examples of the increases which would occur at Blaketown, and in the inner area, and these were published recently.

The Town Clerk said that about £7500 would be the addition to the present yearly rates. Cr. O’Brien said he understood that some smaller properties would have to pay up to 70 per cent, more, and larger properties about 30 per cent. The rates on business places would also go up, some of thbm £1 per week. Cr. Baty: There will be £7OOO or £BOOO extra on the ratepayers per year? Is that correct? “Yes,” said Cr. O’Brien. Cr. Baty: I cannot see how we are to liquidate that loan in 36 years. It seems to me a matter of impossibility for us to carry out the purposes of the motions put. I want some more light on it before we go on. INTO THE FUTURE. Cr. O’Brien: From my point of view, I look at it that long before 36 years have passed, this town will have trebled its population and its size. If it does anything in that direction, the residents will find themselves in the same position they are at the present time. We cannot expect the town to stand still. w It must go ahead, and to make it possible to go ahead we must go in for loans. Provided the Coast is developed and the town goes ahead, the rates will probably be less than they are at the present time. Cr. Baty said he was right out in favour of the loan to provide for necessary requirements, but at the same time he must point out that there was no guarantee that the town would treble its size in 36 years. If they took the past rate of growth as an indication, it would probably take 150 years for the town to treble its present size. He wanted to see the thing done safely.

i Cr. Kent: That is the purpose of the Loans Board. They go into the matters for which the loan is proposed, and decide whether -it would be justified. Sewerage is an absolute necessity. If we don’t do the job, the Health people will do it, and charge us up with it. That Loans Board will cut out anything that is not just corirect. They will also look into the sufficiency of the provision for the repayment of the loan. That is all looked into before the Board allows the loan proposal to go to the ratepayers.

; “As a matter of fact,” remarked Cr. ■O’Brien, “ihost of the work we are proposing to borrow money for has ibeen forced upoh us by the Health Department. The sinking fund of 11 per cent., or a little Setter, earns interest almost immediately for us. Long beifore the 36 years have gone by, we will ibe having quite a sum in interest from the sinking fund.” i Cf, McGinley: What will the Health •Department do if the ratepayers say !no?

• Cr. O’Brien said he understood the •Health Department had power to compel the work to be carried out. j Cr. McGinley expressed doubt on the point, stating that if the Department adopted compulsion at Greymouth, it would have to do so all over the Dominion.

In reply to Cr. Perotti, the Town Clerk gave details, of the loans previously raised by the Council, and their due dates, which showed that the loans would mature at various periods up to the year 1952. The largest of the loans, that of £40,000, would mature in 1941. “What do we pay off per year?” asked Cr. McGiril’py. The Town Clerk stated that the an-

nual payment, in round figures, was £2500. The resolution, providing that the rate of interest be not more than 5J per cent., was carried. “In the event of the loan proposal being carried,” queried Cr. Williams, “do we get the whole of the loan money in one act, or year by year?” Cr. O’Brien: The usual procedure is to take the money as you require it. That can easily be arranged. Tlie Town Clerk stated that the last loan, of £20,000, was lifted in four instalments. On the motion of Cr. Robertson, seconded by Cr. Baty, it was agreed that the sinking fund be not less than £1 0s lOd per cent, per annum.