Rating Power of Borough Councils.

Manawatu Times, Volume X, Issue 1189, 1 March 1884, Page 2

Rating Power of Borough Councils.

[Communicated.]

On a careful study of the " Municipal Corporations Act 1876 " there appears to be some little doubt whether the Palmerston Borough Council can legally strike a rate of sixpence m the".to £ ".to partially provide the interest on the £10,000 loan." The Act indeed seems to- allow of no half measures being taken m a matter of this kind, and indicates that not only all the interest must be provided for by the special rate but ..also the sinking fund. Clause 112 of this \ct reads thus :— " For the purpose of providing the interest and sinking fund upon any loan raised by the Borough, the Council may, if it thinks fit, by special order make and levy special rates. Every special rate shall be an annually recurring rate, and shall be payable at such interval as such special order directs ; and shall be levied year by year, without further proceeding by the Council, until the loan m respect of which | such special rate was made is paid i off " That is the whole of the section and there is nothing m it authorising " partial " provision to be I made. The clause was apparently t designed to prevent foolish couucillors from muddling affairs by mixing up tbe general , and .special rate accounts, as is now desired to be done by our bcal Council who propose to pay part of the interest on the old loan out of the general revenue and part, out of the special rate. The intention_of the Act was evidently to keep tbe funds totally' distinct. It appears to us that not only must the money derived from the special race be devoted solely to the purpose for which it is raised, but also that if a special rate is struck at all it must be sufficiently large to accomplish the full purpose itself, and this reading ia borne out by the following clause, No 118, which reads — "The Council may from time to time amend a special rate by increasing or diminishing the same, if necessary, so that the annual produce thereof shall suffice to-, provide the interest and sinking fund on acconnt of. the loan secured thereon. But no special rate shall be diminished under the powers herein contained, except the Commissioners of Audit shall previously to any such reduction m writing ap« prove thereof, and such reductionshall only continue for so long a period as such Commissioners shall approve." It will be observed that the annual produce must suffice to provide for the. whole, not for .part, and also that though the Council may at any time increase the rate to enable the requisite sum to be raised, they are prohibited from diminishing it, without first obtaining the consent of the Commissioners, and even then must raise it again if the commissioners require it to , be done. Another fact jn favor, of this reading is that there is no restriction m the Act as totthe amount of the special rate.- All other rates— general and separate — are limited, but as of course it was probable that a rate of "more than- Is m the^dß- might be required., to provide -" interest and sinking fund," the Council is not restricted m this respect, but , may strike the rate as high as may be necessary to make such provision. We trust our local councillors will be exceedingly careful m this matter, and that they will not strike a rate m such form as to enable it to be quashed, m spite of the clause relating to this. Before a special rate can stand the test of a court of law it must be shown that it is a special rate, not merely an "extra rate," and that the provisions of the Act have been adhered to. Apparently a special rate must be perfect m itself, and not a hybrid such as it is now proposed to produce, and which is to do only part of the duty the Act requires it to perform. It will be observed that this li special " rate is the only instance m the Act where the Council can make a levy without the co-operation of the ratepayers, and the reason apparently is that while " separate rates," &c, are to provide for works to be done, the " special rate " is to provide for liabilities already inourred. As these cannot be evaded, the power of striking the rate to provide the whole is left m this case entirely with the Councils