MUNICIPAL FINANCE.

Otago Daily Times, Issue 19530, 13 July 1925, Page 4

MUNICIPAL FINANCE.

LOCAL LOAIST ISSUES. TOWN CLERK’S REPORT. The town clerk, Mr G. A. Lewin, reporting on the loan issues of the City Corporation, stated: During the year ended March 31, 1925, * loans by the City Council and the Drainage Board to a total of £339,725 matured, and had to be re-raised. The details of these maturing loans arc as follows; —Waterworks loans £112,400, and South Dunedin loan, £SOOO (re-raised as £73,000); conversion loan £12,325 (reraised as £12,000); Drainage Board loan ±. MO,OOO (re-raised as £210,000; totals, £339,725 (£295,000). The maturing waterworks loans , of £112,400 were at 6 per cent., while the South Dunedin loan of £SOOO and the conversion loan of £12,325 were costing' 4£ per cent. The repayment loans were all raised at 5£ per cent., and it was all to the good that a sum of £44,400 was available as sinking fund in respect of the waterworks and South Dunedin loans of £117,400. The same satisfactory provision did not, unfortunately, apply to the Drainage Board loan of £210.000. Time, it had been on foot for only 10 years, but the policy of the board, as it was previously constituted, was not to provide a sinking fund. In re-raising the loan this very serious omission had been met, and provision had been made for a yearly contribution of 1 per cent, per annum to assist in repaying the amount at maturity of the debentures. In addition to these repayment loans the corporation was called upon to provide new capital by way of fresh loan issues. The details of these axe as follows: Flood damage (balance) £I,OOO Antecedent Lability (part) 6,700 Public works (street loan) 30,800 Waipori Falls, 1922 (balance) ... 23,045 Waipori Falla, 1925 (part) ... 89,900 Housing loan (part) 7,000 Housing loan (Government) ... 5,000 Total for City Council ... 163,445 Drainage Board, flood damage ... 16,000 Drainage Board, 1925 loan (part) 10,400 Or a total of new money of £189,845 And a total of repayment loans of 295,000 Mailing an aggregate of £484,845 With the* exception of the £SOOO received from the Treasury Department of the State as a loan for workers’ dwellings, the wliol© of this large total of nearly half a million was raised entirely by our own effort, the money coming to us in relatively small amounts, and with practically no costs except 10s per cent, brokerage on the comparatively small proportion that came through sharebrokers or other financial institutions. The rate of interest in each instance was 5? 2 per cent. It cannot be doubted, I think, that the year’s loan operations must be spoken of as eminently satisfactory. The year upon which we are now entering promises also to call for a fairly heavy demand in the way of “new” money, as the following loans will require to be provided for between the present time and March 31, 1926: Highway loan £BO,OOO Public works loan 50,000 Housing loan ... '... 10,000 Waipori Falls 1925 loan 50,000 Tramway extension loan 40,000 Antecedent liability loan 40,000 Drainage Board loan 50,000 Or a total of £320,000 A portion of this total can be provided for by our own accumulated funds—the renewal and insurance moneys—but it is clear that we shall require a further fairly heavy call on outside money at least for another year. After that there would appear to be some hope of a respite from any very heavy borrowing for a few years.