EASTERN CITY OUTLETS.

New Zealand Herald, Volume LVII, Issue 17482, 28 May 1920, Page 5

EASTERN CITY OUTLETS.

THE FINANCIAL POSITION. DEBIT BALANCE OF £239,553. REVIEW BY THE MAYOR. An exhaustive report upon the Beach Road and Anzac Avenue account was furnished to the City Council last evening by the Mayor, Mr. J. H. Gunson. He stated that the. total disbursements to March 31 last amounted to £311,555, with contingent liabilities of £10,204. The total value of the realisable property was given at £280,443. The city treasurer reported the following to be the position of the account at March 31 j last Debit.— £209,734; interest and sinking fund on debentures, £11,000; interest on debit balance, £33,487; valuations, commissions, repairs, interest on unpaid purchase money, etc., £11,857; work, £45,476; total debit, £311,555. Credit.—Debentures, £50,000 sales (buildings) and fire insurance, £5567; rents, £3291; sales (soil and materials), £4199; land sold, including deposits and interest, £8846; sundries, £96; totaL credit, £72,001, leaving a debit balance of £239,553. The property which had been sold had realised £85,545, and the value of that unsold was £194,897 11? 6d. Of tbe total debit to the account, namely, £311,555, the sum of £33,000 represented interest since the work was commenced in 1914. Provision for carrying; out this work to the point when realisation of the properties could take place was made by ;— i A debenture issue of £50,000; utilising the credit balances of waterworks, electricity, interest and other accounts; bank overdraft; temporary loan deposits; rents of premises purchased, sales of buildings, etc., and various anticipated credits. Payments for Interest. The loan issue was comparatively small relatively to the size of the financial operations. The bank overdraft was but 'ittle availed of, and temporary loans taken only as required. The main resource was the use of balances of the municipal credit accounts, which money would otherwise have been lying unproductive, or perhaps placed at fixed deposit, but at all events not utilised to such, an extent. It was necessary to emphasise that £33,487 for interest charged I for such advances had not been lost from the city's purse, bat had been credited to I the various municipal accounts referred t<>, thereby strengthening their position cm - siderabh,*. The average amount paid for interest on temporary loans and overdraft sines 1916 was £1525 per annum, and the cost, of such assistance, outside of the financial resources of the council, spread over the past five years of the work, had been very low. Continuing, the Mayor said that tie sales of properties would release the electricity, waterworks, and other moneys which during tho war could not have been profitably used by the departments for the parposes'of such undertakings, the claims of which, now that the war period had elapsed, and development was made posS sible in the respective departments, were being fully recognised by the council. With property sold to the value of £85,545, the account would be receiving either principal or interest to that amount, and as further property was sold —as no doubt would be the case— interest account would receive further credits against debits on account of in terest in connection with the advancesUltimate Cost Hot Yet Certain. If the whole of the property were sold within two years from this date, the amount of the loan, £50,000, would about cover the net debit, including interest in connection with the work. But this re suit was improbable. Tho ultimate net '. cost of the work, which would be deter- . mined bv the length of time it took to clear all the property, therefore, could not possibly bo ascertained at present, The interert against advances would largely determine this by the length of time fell realisation took. If the property could all have been sold as soon as it was marketable the proceeds would have paid . (closely approximate) for the whole of tic outlay including the new Anzac Avenue and Beach Road widening. On account of having to hold for some years however, and with two-thirds (A the property still unsold, with interest ' accruing, this result was impossible ol ! attainment. However, whatever the ultimate net debit in tho account might provt ' to be, the city had to its credit the rew . traffic outlet of Ansae Avenue and a ' areatly improved main thoroughfare u I Beach Road, which was widened consider ably as the result of the scheme. The work was carried out throughout ', the war period under great difficulties ai L to labour, etc.. and now that it was jrac I tically finished, the council need have m [ hesitation whatever, irrespective of th. . term which it took to fully realise flu , property, in concluding that the worl t had been thoroughly justified. ' One-third of Property Realised. A factor in the speedy realisation of th 1 balance of the property would be th ■ early erection of the new railway statioi r on the selected site in Beach Road. Eve: 8 as the account stood the council migh ) look upon the progress made in th { realisation of the property as satisfactory e There were altogether 106 loto, of wnic , 31 had been sold, which represented 29. 1 of the whole. In value, however, th g percentage was greater, the amount Tea 1 ised on 31 lota sold being 30.9 of th , total value of the land. So, round! j speaking, it might bo said that one-thir 5 of the property had been realised, wit ; the continuance of a good inquiry and .' maintained steady sale of sections, lb " t upsets were low, and with the erection < * building and development of the are 5 now setting in, the price of the lan f would probably be advanced by til v Works Committee at an early date t A. schedule attached to the Mayor report showed that the sum paid on * A count of sections sold in Beach Road an I Anzac Avenue totalled £25,458 and til ~ balance owing on same was £60,007. . second schedule* gave the estimated pr< " sent value of the unsold lots at £194,897. The report was adopted, Mr. A. J. hr !S trican and other councillors expressing h l " view that ultimately the cost of the nc V outlet to the city would not excee £50.000, and that at that cost it was 10 valuable asset and improvement to tr city The Mayor and the city treasure '" Mr J S. Brigham. were congratulate II upon the satisfactory nature of the repor 16 and the manner in which the work ha . been financed, ts _________——.