BOROUGH FINANCES

Grey River Argus, 27 May 1938, Page 10

BOROUGH FINANCES

MAYOR’S REPORT

Earlier Rail? Levy Proposed

At the special meeting last evening of the Greymouth Borough Council, the Mayor, Mr. F. A. Kitch ingham, submitted a report on thfinancial position, as follows: — (1) On the 31st. March, 1938, what may be called the Councils cash debit amounted to £14,027 17s 7d; this was the sum at which the Bank overdraft would have stood if all issued, but unpresented, cheques had been paFfi by the Bank, and all moneys in the hands of the Treasurer had been paid into the Bank. (2) At to-day’s date the overdraft stands at £17,792 18s sd. Unpresented cheques and cash in hand are not taken into account in tnis figure, because they are negligible—an increase of £3,765 in eight weeks. (3) From the figures mentioned in paragraphs 1 and 2, must be deducted a sum of £2,676 4s 2d, plus, say £5OO or £6OO, which moneys are refundable from loan moneys expected shortly.

(4) The authorised overdraft at the Bank is £20,000.

(5) The average weekly expenditure, based on the 1937-8 figures, is over £l,OOO. This is the amount to be found by the Council irrespective oi any refunds from the Government, Of course, there is a certain amount of income, but it is an accepted fact that the overdraft gradually increases till tiie 10 per cent, penalty is about to accrue on the rates for the year: that is, towards the end of March. (6) The outstanding revenue for the year 1937/8 has not yet been ascertained, but it is clear that the amount of borrowed money, as at the 31st. March, 1938 (after allowing for Joan moneys to be refunded) was in excess of the limit allowed by the Local Bodies’ Finance Act, 1921-22. It is necessary for the Council to determine how the situation is to ne dealt with. (7) The balance sheet for the year ending 31st. March. 1936, is the latest printed, and the Council must consider what steps should oe taken to expedite the Council’s work. (8) In view of the big overdraft, with a consequential large amount ot interest to pay, the Council must consider the question of levying rates earlier in the year than hitherto. This would have a beneficial effect, in relieving the oflice staff of the rush which has prevailed for many years at the end of March, and facilitate the balancing of the oooks. (9) A report by the Engineer will show the number of men on subsidy (No. 13 scheme) and the number ot men on the No. 5 scheme and their several rates of remuneration. (10) The financial situation is undoubtedly serious and the Council is bound by law to live within its income for the year. The men on the two schemes have been carried on, pending consideration of the financial position by the Council. It has not been practicable yet to start more than one contract (a co-operative party of six taking it' in connection with the sewerage scheme; cense quently the men on schemes Nos. 5 and 13 have remained a charge on th ’ revenue for the year.

(11) I trust and feel sure that the Council will have the support of ali the staff both inside and outside in dealing with the situation. Speaking, in course of the meeting in reference to the overdraft, the Mayor said it had latterly been increased by nearly £5OO weekly. The number of men employed on relief was indicated in the Engineer’s report. The overdraft was £17,792 on Wednesday. The Council, however, had to get £3,000 back out of loan monies, which would reduce it to £15,000, and thus give the Council £5,000 to work on meantime. The Council was faced with the position that there was a debit in March last of over £14,000, and he understood steps were proposed to raise a loan of approximately this amount to cover the monies expended on capital works and on the reliei of unemployment. The main concern was as to how they were going to get rid of this debit. It was hard enough to try and work with their finances in a healthy position. They had started off some £6,000 or £7,000 to the bad, and must get theii finances right. It seemed, therefore, that they must approach the Government ana ascertain if they could get a loan to square their finances off. The Town Clerk suggested that they might endeavour to get a loan from the Government to reimburse the Council for the monies spent on the No. 5 Scheme during the past three or lour years. Cr. Kent said that it would be iii the nature of an antecedent liability loan.

The Town Clerk said that, in 1937, the money expended by the Council on the No. 5 Scheme was £2,173, and in 1938, it was £4,780.

The Mayor said that they might as well get the whole matter cleared up, by securing a short term loan from the Government.

Cr. Boustridge said that the monies expended on unemployment and on capital works over the past three years would amount to about £ll,OOO. and to get a loan for this amount would square off their indebtedness. Cr. Boustridge moved tnat the Council obtain details of the unemployment costs for the last three years, also details of the expenditure on capital works out of revenue, the Engineer and Town Clerk to prepare a report on the same, with a view to an application being made to the Government for authority to raise a loan to cover those items. He said that there was no need for a poll to be taken on such loan. The motion was carried.

The Town Clerk said that material was charged to the general account, and he could not give iniormation as to its cost. Mr. Fairmaid might be able to do so.

The Mayor said that if they got at it smartly, it would be in time for the present session.

A committee consisting of Crs. Herring, Saunders, Neville and the Mayor, was appointed to go into the question of expediting the clerical work and to consider the question of inaugurating a costing system. The Mayor said that relief work was costing them £5B a week." He asked when the men were likely to be transferred to the work of sewerage extension to Blaketown,

The Engineer said that he hoped to transfer half a dozen of these relief men within a couple of weeks. The work of manufacturing the pipes for the sewerage exlension was now in hand.

It was decided to request the Engineer and his assistants to devote al! possible time in instituting the sewerage scheme plans and specifications in order to have the men removed from relief work.

Cr. Neville suggested that possibly, if the Gasworks Management were to be removed from the Engineer’s hands, it would provide him with a great deal more time to advance and expedite other works. The Mayor said that they had a Gasworks Committee to ascertain if reorganisation were necessary, or if a reduction or an increase in the price of gas were desirable. He suggested that the matter be taken in hand immediately. The Gasworks was now just holding its own, and that was not good business. RELIEF OF UNEMPLOYMENT. The Engineer (Mr. A. J. Fairmaid> submitted a special report as to the men employed, under arrangement with the Employment Division of the Labour Department, as follows: — Under the arrangement referred to above the Borough Council employ? varying numbers of men, some for forty hours per week, some for shorter periods, according to family responsibilities. Under ordinary circumstances, towards the wages of men employed 40 hours per week, the Council receives a subsidy of £2 5s n d per man per week from the Employment Promotion Fund; the Workers' Agreement rate of wages amounting to a gross payment of £4 Ils 8d per man per week to labourers. Twenty five men are this week employed upon that basis. Upon the Omoto Road widening work, a subsidy of £4 per week was paid, but tne period for that subsidy has now expired and the men engaged cleaning up the job are now paid in full by the Borough Council. Work on reading etc., in the Government Housing Block, was carried .out under like circumstances. No men are now employed on such terms. On the Sewerage Scheme the Employment Promotion Fund subsidy amounts to £2 10s Od per man per week, for all m?n employed from the Employment Bureau, or, in the alternative'a total subsidy of £25,000 which ever method of payment should, upon completion of the work, prove to be the greatest, provided that at all times at least 80 per cent, of the labour employed shall have been engaged from the Bureau. During this week six men are employed upon this work on a co-operative contract basis, excavating and back-filling the sewer trench. Four others are working on a daily wage basis laying pipes and one is on survey and setting out. Men engaged on a part time basis, No. 5 Scheme, comprise 17 single and 29 married men. Payment to these men is provided from the Employment Promotion Fund for varying periods, according to their family responsibilities and with few exceptions, where the allotted time falls short of an even half day the men complete that half day and are paid for the time as required to complete the half day by the Borough Council The amount so paid out may best be ascertained by reference to last week, when 15 single and 23 married men earned a total of £75, and £65 2f, 2d is due for refund by the Labour Department. The position regarding payment to men employed full time is that this week, from ordinary sources of revenue, 25 men will receive a total of £ll4 Ils Bd, of which £56 5s Od is due for refund. On the Sewerage Loan Works eleven men will earn a total of £5O 8s 4d, on which the refund will be £27 10s. In these estimates, no account is taken of earnings above the basic rate of £4 Ils 8d per man per week. Present men on No. 5 Scheme, in addition to time worked by arrangement with the Labour Department, have for the past eight weeks or so done one day’s extra work per man per week for which payment has been made trom the Mayor’s Fund.