MORVEN DRAINAGE

Timaru Herald, Volume CXLIII, Issue 20898, 30 November 1937, Page 5

MORVEN DRAINAGE

LOAN OFFER BY STATE ADVANCES

RATEPAYERS TO BE CONSULTED

Because the conditions of the loan of £3300 made by the State Advances Corporation for the Morven drainage scheme Involves a rate of 20 to 25 per cent, higher than anticipated when the scheme was mooted, the Waimate County Council decided at its meeting yesterday to conduct a personal canvass of the ratepayers in the area before accepting or rejecting the loan offer. The time for the acceptance of the offer expires to-day. A letter was received from the State Advances Corporation advising that it was prepared to take up the Morven drainage district loan of £3300 at 34 per cent, for a term of 15 years, repayment to be on the basis of a 15-year amortisation table, or, if desired, on a 25-yaer table with the balance outstanding at the end of the fifteenth year to become payable in one sum, the loan to be secured by a special rate over the Morven drainage district subject to the following conditions:— (a) That the Council undertake under seal to meet any deficiency out of its general fund. (b) That the Council authorise Treasury that in the event of default any arrears may be deducted from subsidy moneys payable to it. The clerk reported having written to the Local Government Loans Board advt«ing that the Council had been u .ruble to raise a loan on the terms

authorised by the Board, namely for a term of 30 years with a sinking fund of not less than 2 per cent, per annum, and communicating the terms and conditions of the loan offered by the State Advances Corporation. The Loans Board had subsequently authorised the Council to accept the Corporation’s offer with discretion as to the alternative conditions. Higher Rating The chairman (Mr J. Bitchener) said that no local body could raise a loan for the term laid down by the Loans Board. If the offer of the 15year loan on a 25-year table were accepted, there would be approximately £l5OO outstanding at the end of 15 years, when it would be necessary to raise a fresh loan. As the loan offer involved higher rating in the drainage area and as the time for acceptance was short, the finance committee recommended that a personal canvass of re ratepayers concerned should be carried out before any decision was made. Cr. N. A. Rattray: Are you also consulting the other ratepayers? They arc also liable. The chairman: Not until after 15 years. Cr. Rattray: If a depression occurs within the next two years, they may be accountable in the next year. The chairman: We have taken a more hopeful view than that. Supporting Cr. Rattray. Cr. A. N. Hayes said that he took strong objection to the rest of the county being pledged as security for the loan. Cr. Whatman said that under recent legislation it was impossible to raise a loan of any kind without the responsibility being spread over the whole county. Care had been taken, however, to see that the county had power to collect over the area in question. Cr. Hayes: Is any Crown land involved? Voices: It is all Crown land. Cr. Whatman said that the Council had power to distrain f~ m the ordinary way. Cr. W. Lindsay expressed the opinion that the loan should be ac-

cepted. It might be an only chance. Cr. Rattray said he had every sympathy with the scheme. As the Council was responsible for striking a rate, he suggested that, as a measure of protection for the rest of the ratepayers, a slightly higher rate than necessary to meet the loan charges should be made. When the reserve fund thus raised should reach £2OO in. say, 10 years, the extra rate could be remitted. The principle of the matter was important. The clerk said that the sum of approximately £220 collected each year was, according to legal provision, 10 per cent, above the minimum to meet the loan charges. This would in 10 years provide a sum sufficient to pay the rates for one year. Cr. Rattray agreed that the rate provided a reasonable contingency and withdrew his objection. Cr. H. B. S. Johnstone remarked that they must remember they were dealing with Crown lands. The clerk said thai special rates were always paid by the Crown. After further discussion it was agreed that Cr. Whatman should conduct a personal canvass of the ratepayers, and after consultation with the chairman and clerk, to accept the loan, provided a substantial majority of the ratepayers acquiesced.