CITY FINANCE

Dominion, Volume 13, Issue 225, 17 June 1920, Page 6

CITY FINANCE

REDUCED RATE STRUCK

DEFICIT TO BE FACED

MAYOR PROPOSES SPECIAL RATE

The city rates were further considered at an adjourned meeting of tho Wellington City Council last night. The council at. tho preceding meeting had struck, a general rate of 3d. in' tho poun<f on tho unimproved value, but discovered subsequently that this rate exceeded the legal limit. The Mayor (Mr. J. P. Luke, M.P.) presided, and Councillors Bennett, Thompson, Forsyth, Wright, Shorland, Burn, Burns, Dale, Float, Fraser, Glover, Chapman aiid Hutchison were present

Tho Mayor said that the council at its last meeting had struck a general rato of M. in the pound on the unimproved value. He had to report now ihaF tliis rate was in excess of the limit of rating power imposed upon the council by law. He was not making a«f apology and he was not going to say anything as to where the email mistake had occurred. Ho would take all the blame for the, position. He and others had recognised many s years ago that tho time would come when, owing to increasing charges of all kinds, the .rating power possessed by the council wouTd be insufficient to meet 'the financial needs of the council unless the city wa»_ frequently revalued and was a livo mitt growing city. That time had now come, The city had. not been revalued since 1915. and consequently tho rating limit had becomo insufficient. The council had asked the Government time and again to push on with the revaluation of the city, but tho Valuation* Department had its own difficulties and nothing had been done. The time had come, said Mr. Luke, for a definite move. The City Valuer, Mr. J. Ames, had been to a large extent the Government valuer for tho city, and it would be a very good thing if the Government would now permit Mr. Ames to take over the whole of the revaluation of the city, employ what assistance was require!, and ' get tho work doije. The council would then get the benefit of the increased values, which were very largo. Some people at present were paying too much in rates and very many were paying too little.

The reduction of tho general rate to bring it within the legal limit, continued the Mayor, was going to leave tho council short of the revenue required by -=£9357. The rate of 3d. on the unimproved value could not be collected, but a rate of 2 61-100 d. would be within the limit. This rato would give a revenue of .£138,421. The council; spent, .£BSOO a year on street lighting. It could collect a special rato for street lighting, and if this special rate were fixed at 35-200 d. it would.produce This arrangement would put the council practically in the same position as if it had collected the general rate of 3d. The arrangement would be absolutely within the lour corners of the law, and he thought the council would be well advised to adopt it. The overdraft at present was inoreaeing, and was involving tlte payment of large sums for interest. Tho books were not yet available for the sending out of the rate notices. Ho hoped that the Government would 'accept his suggestion regarding the revaluation. Councillor Dale: What is the lighting rate now? The Mayor replied that the council had no lighting rate. It had paid for street lighting from the general fund. to strike a special lighting rate, and other municipalities had done so. Tho .special rate would be spread over the wholo body of ratepayers. The council was faced with heavy increases in expenditure. It had to consider the question of salaries that night, and other charges were mounting up. It would be far better to face the position and strike the necessary rate than to have a huge deficit at the end of the year. Ho moved that the motion striking a general rate of 3d. in the pound on the unimproved valuo should be rescinded. Councillor Thompson seconded the molion, and it was carried unanimously. The Mayor then moved to strike a general rate of 2 81-100 d. in the pound on the uniranroved value. This motion was carried without discussion. The Mayor moved to strike a special rate of 35-2Ood. in the pound onthe unimproved value for street lighting; Councillor M'Kenzie suggested thatthn rate ought to be reduced if tho unimproved variK) was increased. Councillor Forsyth said he would prefer to accept the reduced general Tate, and leave the estimated debit balance to accumulate until the end of the year. Tho now valuation was going to increase the unimproved values enormously, and then the general rate would produce an increased ravenue. The Mayor: You won't get it this year. Councillor Forsyth thought tho proposal the Mayor had made was hardly fair. The money proposed to be provided by the special rate would not be required until the end of the yeo,v in any case. Councillor Dale said he felt uneasy about the proposal. The Mayor certainly had offered a means of getting round tho corner, but to strike a lighting rate was a difficult matter. Tho Onslow Council had considered that a lighting Tate should be on the capital value, since the man with a'Jarge section got no greater benefit from street lighting than tlie man with a small section. The Mayor said he was 'prepared to let the matter stand over. Ho did not think it would be possible to get tho rate notices out immediately in any case. But the revenue must be increased. Extra expenditure was being incurred under various headings in addition to wages and salaries. Money had to be found for the technical school and for expenditure at Day's Bay. The present council would not bo in office next year, and a substantial deficit would not _bo a pleasant legacv for the new council. Councillor Frost said that tomo of the. council's special rating powers were not being fully used. Interest on Bpccial loans was being paid out of the general fund when it could be covered by special rating, an adjustment on these lines would get the council out' of its difficulty. Councillor Shorland: What will be the position next year if the city is not revalued this year? Tho Mayor: The position will bo worso than this year. I think we can make sure of the city beinjj revoi/ued this yoar.

The motion regarding the special lighting rate was referred to the Financo Committee, and the council then turned to other business.