SEADOWN DRAINAGE SCHEME

Timaru Herald, Volume CXLV, Issue 21156, 1 October 1938, Page 8

SEADOWN DRAINAGE SCHEME

Repayment of Guarantee

Definition from the Auditor-General

Council Refers Matter to Mr Semple

According to a telegram from the Auditor-General, which the Levels County Council considered at a special meeting yesterday afternoon, the Council can lawfully enter into a contract with the Public Works Department to provide a share of the cost of the Washdyke Lagoon Drainage Scheme, but he could not guarantee that such Share could be paid out of loan. He added that there was no authority to pay off a liability already incurred and that liability arises when the contract to pay the £lOOO is entered into. After a consultation with the Council’s solicitor (Mr W. D. Campbell) it was decided to forward the correspondence and telegrams to the Minister of Public Works, the Hon. R. Semple, and invite him to show the way open to the Council to meet his wishes in connection with the commencement of the work.

“The Minister has got it into his head that we are not doing what we should in regard to the scheme, and he seems to think that there is political bias on the part of the Council," said the chairman, Mr T. B. Garrick. “I can assure you that as far as I am concerned such is not the case.”

“Have you any political bias?” the chairman asked the Council’s solicitor, Mr W. D. Campbell, as he entered the room.

Mr Campbell: No, I am not a bowler, so I have no bias at all. (Laughter). The chairman (continuing): I did not reply to Mr Semple’s remarks, but Mr Clyde Carr rubbed it in so much that I was fairly flabbergasted. The treatment I got at the inauguration of the Downlands scheme on Tuesday was not a fair thing at all. The outcome is that I instructed the County clerk (Mr S. B. Bird) to send a telegram outlining the Council’s position to the Auditor-General. The clerk then read the following telegram which had been forwarded to the Controller and Auditor-General of the Treasury Department: “The Public Works Department have approved of £lO,OOO scheme for drainage of Washdyke Lagoon and adjacent land, the Department providing £9OOO and a special rating area to provide the balance of £lOOO. The land is in a bad "state and the Minister of Public Works is prepared to start work immediately, providing the Council give a guarantee that the £lOOO will be raised. Legal formalities in connection with the formation of a special rating area have been commenced, but would take up to six months to complete. Difficulty may be experienced in raising money after the loan had been authorised. Can the Council give a guarantee that the money will be paid? A special Council meeting will be held on Friday to discuss the question of guarantee. Please wire reply.” Auditor-General’s Reply The Auditor-General replied the following day as follows: “The Council can lawfully enter into contract with the Public Works Department to provide a share for the cost of the work, but cannot guarantee that such share will be paid out of the loan. There is no authority to raise a loan to pay off a liability already incurred, and that liability arises when the contract to pay the £lOOO is entered into." The chairman: According to that we are out of court altogether and cannot grant a loan. Mr W. D. Campbell: The opinion is not that of the Treasury Department, -but is from the Auditor-General, who is the highest authority. The chairman: Don’t you think that the reply prohibits us from doing it? Mr Campbell: It prohibits you from granting a loan for that area. The chairman: Mr Semple has said that If we give our guarantee he will go on with the job. Cr. R. W. K. Munro: I take it that we will have to guarantee that the ratepayers will put it up. The chairman: Mr Semple said the other day that he was willing to take a guarantee from any specific local body. Mr Campbell: Yes, but if the Council grants £lOOO you could not raise a loan to pay it off. Cr. J. Scott: If the settlers failed to back us up, how would we get on then? The chairman: We cannot start the work until we know who is to be responsible for maintenance. Are we to be responsible as a Council, or will a special rating area provide for maintenance? These things have got to be definitely arranged. Mr Campbell: If you raise £lOOO over the whole district the rate would be the same throughout the whole area, but maintenance rates would vary according to the value of the settlers’ property. Onus on Council The chairman: We do not want to lose the £9OOO subsidy. Mr Semple threatened that Mr Armstrong might withdraw his £3OOO subsidy. Subsidies have been withdrawn in other cases. The whole onus in regard to t’ - matter

has been put on the Council. We have gone as far as we can go, and if we find the £lOOO from revenue .e cannot raise a loan with which to repay the revenue.

Mr J. Scott: What will be the position if some of the settlers in the area refuse to be a party to the scheme? I know of one man who holds 800 acres and he will have nothing to do with the scheme.

Mr Campbell: If the Council declares a drainage area all the settlers would be In it.

Cr. J. Scott: Is there no right of appeal? Mr Campbell: I would not express an opinion off-hand on such a point. Clauses in several Acts would have to be consulted. Cr. Munro: If we gave the guarantee and the settlers did not come to light how would we get on? The chairman: If the Seadown

settlers defaulted, the whole county would have to find the £lOOO. Mr Campbell: According to the Auditor-General If you give the guarantee you cannot raise a loan to replace it. The chairman: We dare not do that.

Mr Campbell: No, under the terms of that telegram; unless, of course, you like to make a gift of £lOOO to the district.

Cr. Munro: There is not a man at this table who is unsympathetic to the settlers.

The chairman: We wish to show the public that we are not opposed to the scheme.

Cr. R. G. Cleland: How could any man who has had any experience in working stock fail to be unsympathetic in regard to the conditions in which the Seadown settlers are wor’ tog? After further discussion, Mr Campbell suggested that the Council could send the correspondence and telegrams to the Minister of Public Works and, in face of the reply by the AuditorGeneral, ask Mr Semple what was the way open to the Council to meet his wishes. It was agreed to take this course.