THE LOAN PROPOSALS.

Timaru Herald, Volume XIIC, Issue 13900, 11 May 1909, Page 6

THE LOAN PROPOSALS.

AGAIN UNDER. DISCUSSION.

At the committee meeting of . the Borough Council held last Friday night, Councillor Sinclair gave notice of motion—"That the loan proposals passed by the Council on the 24th March, 1909, be rescinded," and this came on for discussion at the meeting of the Council last night. Councillor Sinclair said that at the public meeting in the Assembly Rooms, the Mayor had pronjised to give the new Councillors opportunity of rediscussing the loan proposals, and he (the speaker) was now taking advantage of that promise. He did not, wish to cast any reeflction on the Mayor or members of the late Council, but lie had promised the burgesses that lie would oppose -anything likely to increase the rates,, and that was his reason for opposing the proposed loans. He believed that if they were carried the rates would have to be increased, and property was already rated quite heavily enough. The town was already indebted heavily enough. The burgesses had given authority to borrow £139,000, including £50,000 for the drainage loan, and the £33,000 they now proposed to borrow would bring the total up to £172,000. In renewing the waterworks loan, they would" effect a saving of interest, but not sufficient to pay all the interest on the drainage loan and on the £33,000, and he was satisfied that there would be a difference of something like £3600 to make up. This must be provided for by extra rates, and he was opposed tc that. Councillor Sinclair then dealt seriatim with the loan proposals. The town hall, lie contended, was not required in the meantime; municipal buildings might be worthy of consideration if the Council had its other works finished, but it. had not, and in the meantime those buildings could be done without. It was not necessary to spend £3OO or £4OO on the Mechanics' Institute, as suggested by the Mayor, and if necessary they could use the Institute for municipal, chambers, leaving the present chambers for rhe fire brigade. They would have to provide some money for street improvements, and the only fault he had to find with this proposal was that £IBOO was proposed to be spent on the South Town Belt. That would be a scandalous waste of public money. He suggested that a part of the drainage loan, which would not be required for some time, should be transferred to the street improvement loan in the meantime, and thus effect a saving in interest. (The Mayor said that was impracticable, as the Act' prohibited it.) .Continuing, Councillor Sinclair said that the Mayor had said the Council was making a profit of £6OOO a year from the water, and this being so, he (the speaker) would suggest that the improvements to the water supply should be paid for out of this profit, spending the money at the rate of £SOO a month. This would •do away with any necessity for a waterworks loan. He thought it essential that in any improved scheme of water supply, increased pressure for fire prevention purposes should be given. Tiiey should go steady in the matter of borrowing, and if the ratepayers would tell tiie Council that it must cut its cdat according to its cloth, it would be a good thing tor the town. Councillor Porter, in seconding the motion, endorsed what Councillor Sinclair had said, and argued in favour of decreasing, if possible, the rates on cottage property, as under present conditions, when people fell out of work, they were driven out of the town by the high rates. Timaru was not like a big centre, where they had numerous industries to fall back upon, and people should be eucouraged to come here—-not discouraged by high rates. The Mayor said they were coming here.

Continuing, Councillor Porter said that if the Council did not rescind these proposals he was quite sure the ratepayers would do so.

Councillor Beck said lie wanted to see the best that was posible, done for the town, but he thought a mistake had been made in the way these loan proposals had been put before the ratepayers. He did not think that they had been correctly presented. • The Mayor had said that if all the proposals were carried and the money obtained at s>> per cent., there would be no additional cost to the ratepayers. He also said that the extra water had not been made necessary by the underground drainage. Jf tliis were so, and the extra water was not going to give them a higher pressure, why ask for a loan of £18,000? Mr Dobson's report said nothing about extra pressure ■ for fire prevention and that was the most important point. Apparently the Council had not instructed him as to what was required, and it should have done so. If a higher pressure was not obtained, the £IB,OOO would be practicnlly wasted. He believed that street improvements were necessary, but palatial buildings would be a waste. Councillor Beck added that £60,000 at 7per cent, would iequire £4200 a year for interest, £93,000 at 5J £5115, and taking £4200 from £5115 would leave a deficiency of £915 to be made up annually in interest charges. The rate of interest stated in the loans by the Mayor was a pure gamble, as no one could tell what the rate might be in 1910. Clearly the ratepayers were wrongly informed as to the actual cost of those proposals —hence his objection to the proposals m their present form. They seemed to have been hashed up altogether. He would like to see an improved water supply but there there should be at least a pressure of 1501b. to the square inch. He was satisfied that there was something wrong and would like to see it put right before things went any further. He did not want to trample on the toes of any professional man but was confident that he could outline a scheme for an improved water service that would give a better pressure than the one proposed. Councillor Raymond said he had listened to all the speeches so far, but had not been converted by them. He diu not look upon Councillor Sinclair's proposal to pay for the water ments out of water profits, with ap-' proval, as that would mean increasing the rates-the very thing they wanted to avoid. At present the profits from the water were paid into the general fund and belned to keep down the rates. He was not in favour of the building scheme, but he was in favour of allowing the issue to go to the ratepavers for decision. An improvement in'the water supply was very necessary in justice to those who were now being eharsed for water which they did not

get, and in order to obtain a better pressure.

Councillor Watson expressed himself as decidedly opposed to spending money on town halls or the like; the present building was good enough for the next 25 years. He believed the water loan would bo carried, but ho would like to see the scheme amended so that a better pressure could be obtained. This could be done by pumping the water into a tower; by raising the height of the reservoir 10ft. as proposed, they would only get an extra pressure of about 4 lib. to the square inch. And the new pipe to be brought down Waiiti road would, only give a better pressure to those below the level of the extra 10ft. Those on the higher levels would get more water, but only when those down below were not using it. He believed that if all the users of water were put on meters the present reservoir could be made to hold sufficient water to last the town 20 days, but he believed in having plenty of water. He suggested that only two proposals be put before the ratepayers, one for street improvements and the other for an improved water supply. Thev might ask authority to borrow instead of £IB,OOO for the latter only as much of the money as was actually required, to be used. They should have a water pressure of at least 1451b. to the square inch. Councillor Hawkey, in reply to Councillor Beck, said that when Mr Dobson had iJeen brought down from Christchurch he had been given a free hand to report on the best method of improving the water supply. He was not dictated to in any way by the Council. The Mayor said he was pleased that the new Councillors had taken an opportunity of discussing these proposals in the Council, and that the discussion had been carried on in such good form. They could not, perhaps, see eye to eye," but they were all entitled to their own opinions, and it was well to express them. He referred to the breaks which had occurred along the water-race about eight years ago, and said that they would be living in a fool's pradise if they supposed that breaks would not occur again. They had decided to wait until the waterworks loan matured in order to get money with which to effect improvements, and it would be the height of folly not to make those improvements now. Mr Dobson had been asked how best to make the necessaiy improvement, and they had obtained from him a very good report. Nature had not given us -a • high elevation from which to get a great pressure of water, but much good could be done by increasing the volume of water in the pipes, and thereby backing up the present supply. He believed that volume was even more important than pressure in a case like this. Under Mr Dobson's scheme they would have a storage capacity of twenty million gallons, instead of four or five millions as at present; the circulation would be complete, and they would have any amount of water for fire prevention .purposes. 'lf they wanted a greatly increased pressure this could be obtained by pumping the water into the mains; but he did not think that it should be done in the meantime. As to " street improvements, the Mayor said that the money, spent in this direction had been money well spent. It was not right, however, to make permanent improvements out of rates; such work should all be done out of loan money, repayable by a sinking fund. They were quite justified in asking for this £6OOO. Objection had been taken to the £IBOO for providing a promenade for the main south road to the sea at the south of the park, but this was a mere detail, and it did not follow if the loan was sanctioned, that this £IBOO would actually be spent there. Mr Craigic said that he felt absolutely confident in asserting that if all these loans w ye carried the rates would not be increased by one penny. He paid a good '.•••;; l in rates himself, and did not w-rit to see them increased, but he would have no hesitation in voting for the loans o--i that score. He .had said h> : rore, however, and he now repeated it, that he would not press the loan for a mu.iicvpal theatre or town hall; still he thought the people should be given an c-i portunity to vote on the proposal. in reply to Councillor Sinclair, the Mayor said that at present they were paying £(5083 by way of interest and sinking fund on loans, and including the balance of the drainage loan still to sell, the total would be £7898. Interest and sinking fund on the proX>osed loan of £33,000 at 41 per cent, would be £1485, and the saving of interest on the waterworks loan would amount to £1350, so that there would only be a difference of £135 per annum. He was certain the money would be- 1 raised in London at 4|| per cent., including sinking fund, and the present rate of 3s 4d in the £ would pay for the whole and the work in the borough. At present they were paying £ll.OO for scavenging, and every connection that was made would reduce the cost of this. The Council had gone very carefully into all the proposals, and he did not think they should be afraid to trust the people. Councillor Sinclair said he was still unable to see with the Mayor and his figures, and he made a further calculation by which he considered there would be an increased sum of at least £2300 to make up yearly as a result of the new loans." He thanked the Mayor and Councillors for the kind way his remarsk had been received. The Mayor repeated that he was confident the money would all be got at 4 per cent., and there would be no increase in the rates. Councillor Beck said that a European war might break out to put the rate of interest up to 7 to 12 per cent., and the Mayor said yes, or the town might be bombarded, in which case they would not require to pay any rates.

Lastly, the Mayor mentioned a new point, namely, that in the Local Bodies Loans Amendment Act of 1908, the Government proposed to pay a half per cent, sinking fund on public bodies loans, instead of advancing money to them, and he would see if he could get such a provision inserted in the Bill, which it would be necessary for ths Council to wet. If he were successful in this the loan would be obtained on still more favourable terms than previously anticipated. On a vote being taken on the motion, it was lost, the voting being as follows:—For rescinding the loan proposals Councillors Sinclair, Porter, Watson and Beck. Against—The Mayor, and Councillors Hawkey, Sealey, Oborn, Harney, Raymond, Satterthwaite, Gilchrist, and Leathwick.