OAMARU HARBOUR BOARD.

Otago Witness, Issue 1956, 20 August 1891, Page 31

OAMARU HARBOUR BOARD.

The following is the report of the Public Accounts Committee on the Oamaru Harbour Board Loan Act Amendment Bill, presented to the Houtse on the 12th : —

"Ia 1874 the O&m&ru Harbour Board was constituted by a Provincial Ordinance of Otago, authority being given to borrow to the extent of £100,000 at 6 per cent, on the security of any lands for the time being vested in the board and of the rents thereof, and of the dues chargeable or receivable by the board under ' The Oamarn Harbour Board Ordinance 1874.' The board proceeded to borrow on mortgage the full amount authorised, of which the post office advanced at 5£ per cent, interest out of the Trust Funds £35,000, afterwards reduced to £33,000, by part payment of the sinking fund. The balance of the £100,000 was borrowed privately at 6 per cent, interest. In 1878 further powers were given by the General Assembly to the. board to borrow on debentures, another £100,000, and that amount was raised at 6 per cent, interest. In 1882 further power was given by the General Assembly for the board to borrow another £50,000 on the security of their endowments and on a special rate on property within the Oamara Harbour district, and that amount was raised at 5 per cent, interest. In 1887 further powers were given by the General Assembly to borrow £40,000 on an additional special rate. Against this there was advanced in 1888 out of the post office trust f"nda the further sum of £30,000, at 5 per cent., against tbe deposit of the debentures for £6600, which were afterwards handed back. This advance appears to have been made on the condition that tbe board should undertake to introduce in fflie session of th*t year a bill to repeal ' The Oamaru Harbour Board Loan Act 1887/ and to authorise the raising of a loan of £65,000, of which £32,000 was to be expended on harbour improvements, and £33.000 to be applied to payiog off the mortgages to that amount held on behalf of the post office account (part of the first loan of £100,000). The Government agreed if the bill was passed to take up the proposed Joan at par, the money to be applied as follows : — (a) To paying off the mortgages for £33,400 held in post office account ; (b) to the repayment of the advance of £30,000 which was then being made; (c) the balance to be paid over to the harbour fund account. It was part of the arrangement that in the event of legislative authority not being obtained the advance of £30,000 was to be repaid at 12 months' notice. The bill was introduced, but not passed. The post office, besides the balance of £33,C00 still outstanding on mortgages under tbe loaa of 1874, remains the creditor of the board for £30,000 advanced in 1888. Interest is now overdue to the post office under both advances amounting to £3316, besides which sinking funds to the amount of £5000 under the original advabce are I also in arrear. Tbe board appears to haVe duly met its obligations to tbe other creditors. Tbe board has lodged tbe £6600 debentures handed back by the post office, part of the issue of £40,000 under the act ef 1887, with its bankers as security for an overdraft at present of about £3000. The revenue of tbe board last year amounted to £20,125, and the expenditure (including interest £6325, and sinking fund £100) amounted to £20,107. This year, by reason of the railway reduced freights and decreased rents from endowments, the income is estimated as likely to be from £1000 to £1500 less than last year, while the expenditure, if current engagements are to be kept, cannot be materially reduced. It may be estimated that the board will be £1000 more to the- bad at the end of this year than last, while it will be seen that last year it was unable to pay in full its current engagements. It now appears by the bill before the House that the board is desirous of obtaining authority to arrange for further advances against the balance of the loan. In other words it desires to make some other arrangements in respect of the £6600 worth of debentures held by the bank against the present overdraft, and also to use the margin of £3400 held by the post office in nominal excess of its last advance of £30,000. The board also desires by the bill authority to hypothecate its dredge and other plant. The rating powers of the board are not exhausted by a probable further revenue of £2700 per annum, which if collected would, after allowing for the probable shrinkage in revenue from the competition of the railway, suffice to keep its current engagements on foot, but without providing for the arrears of interest and sinking fund. The position of the board appears to be sush as to render it advisable for Parliament to abstain encouraging further financial operations by the board outside the means it already possesses, or may under tbe power already conferred legitimately exercise. T,he committee therefore i recommend that the bill referred to it be not i further proceeded with."