CITY FINANCE

Dominion, Volume 20, Issue 65, 10 December 1926, Page 12

CITY FINANCE

SATISFACTORY LOAN ARRANGEMENTS SURPLUS FROM TRADING CONCERNS STATEMENT BY THE MAYOR Several matters concerning civic administration were referred to by the Mayor (Mr. C. J. B. Norwood) at the annual meeting of the Civic League last night, particular mention being made of the excellent financial arrangements that had been made during the past year and the city's trading concerns. ■ Air. Norwood stated that during the past twelve months the city had made

financial arrangements for £330,000 on loan. The minimum rate of interest was secured, this being £5 Bs. 4d., inclusive of all costs in Wellington, while at the same time the Government was paying 5J- per cent, over the counter. He could congratulate (he council and the ratepayers that the money they were using was available at the lowest possible rate. Christchurch rnd Auckland were paying a higher rate of interest, while Sydney and Melbourne bad not got through as well as Wellington had.

Referring to the trading concerns, the Mayor said there was a big matter of policy involved. The councillors and lie himself were not quite sure as to what would do the greatest possible good with the surplus money available from these concerns. The present policy was to place the surplus from these sources at the disposal of general city’ improvements relating to the whole of Wellington. The electricity’ department was run at so small a margin of profit that the slightest change of cost might produce a loss of £20,000. He was satisfied that, due to the extraordinary conditions in respect to tramway extension work, the council’s policy- in the past had been a wise one. Notwithstanding, they’ would have to think seriously before they followed the lead that was universal elsewhere, as capital was invested 'in their trams in sinking and renewal funds. Mr. Norwood went on to say that old loans would soon begin to run out. starting in 1928, and that this -would mean the saving of £44,000 to £45,000 per year by sinking funds coming back in part payment of loans. The city, he riggested, was at a peculiar period. The benefits of the old loans had long since gone, but the interest and sinking fund still went on. There was a time coming when the council in office would be in the position of being able to do something without raising the rates.