LOAN RE-CONVERSION

Otago Daily Times, Issue 26903, 15 October 1948, Page 3

LOAN RE-CONVERSION

Approved by Council

The proposal for reconversion of part of the borough consolidated loan was discussed by the Oamaru Borough Council last night, and the recommendations of the joint committees were approved. The proposal provides for the portion of the loan held by the Public Trustee to be reconverted to a table mortgage for a term of 25 years from January 1, 1950. In supporting the recommendations, Cr E. S. Stubbs said that an alteration of contract by mutual agreement removed any question of repudiation. The borough conversion loan of 1934 did just what was now proposed, in that it altered previous contracts by consent and paid cash premiums to give compensation where necessary. The proposal was to reduce the borough loan charge from £16.400 a year to £8575 a year, which would mean an annual benefit of £7825 between 1950 and 1960, a total of over £78,000. The amount of extra interest involved, some £40,000. would not be paid by the present generation. It would be more than fully paid by the last five payments in the proposed new table loan between 1970 and 1975. In return for their five years of payments the citizens concerned would inherit and enjoy amenities that they would not otherwise have had. If there was no reconversion in the meantime, the year 1960 would see the borough suddenly free from a loan payment of £16,800 a year, but at the same time there would be great arrears of maintenance and development. It would be without amenities that might have been provided, and would have new interest and new sinking fund charges to pay. One set of loan charges would replace another. In moving the recommendation, Cr J. RMcEwan said that if it was carried rates would be reduced and more attention could be given to the provision of further amenities. The present ratepayers were paying more than their share for the utilities and amenities of the borough. Cr A. Hamilton, who seconded the recommendation, said it would mean that the future ratepayers would pay their share in the amenities provided and the burden of the present ratepayers would be lightened. Cr F. J. D. Blackgrove said that at first he did not favour the recommendation, but on reconsideration had concluded that it would be for the ultimate good of the borough. It had been suggested that, if the recommendation were adopted, it would lower the rates, said Cr A. Wilson. He did. not support this view, but agreed that it would hold the rates where they were to-day. He did not think that a substantial "reduction in rates would be made.

After further consideration, the recommendation was carried unanimously.