PAEROA BOROUGH LOANS

Hauraki Plains Gazette, Volume XXXVIII, Issue 5140, 17 June 1927, Page 2

PAEROA BOROUGH LOANS

treasury want particulars.

BATHS AND STREET PROPOSALS.

At the meeting of the Paeroa Borough Council on Friday last a> tetter' was received from the Local Government Loans Board, through the Treasury, pointing out that it would be necessary to obtain exemption from the requirements of the -Local Government Loans Board Act, 1926, before the Orders-in-Council might h® issued. When applying for exemption for the swimming baths loan of £2OOO the council was requested to supply copies of the newspapers in which the loan proposals were published; also to state whether the loan was to be repayable by instalments or whether provision was to be made by means of a sinking fund, and if by a sinking fund, the amount of the annual contribution should be stated.

With reference to the Criterion bridge loan of £lBOO, information was sought as to the nature of the mlterials to be used, and also the amount of the sinking fund proposed to be set aside annually. The Normanby Road special rating area loan of £lOOO was also referred to. The Treasury drew attention to the fact that the proposed term of the loan was 30 years, and it was presumed that a sinking fund of 1% P er cent., being an amount sufficient to repay the loan within that period, was to be established. That amount, however, did not appear to be adequate to redeem the loan within tho estimated life of the proposed works, and if possible the sinking fund should be increased so as to provide repayment within 15 years. An amount of five per cent a year would, under such circumstances, be necessary.

THE COUNCIL’S REPLY. In reply to the communication the council applied for exemption by the Minister of Finance from the requirements of the Act, and subsequently for the Order-in-Council already applied for. The swimming baths proposal was for a term of 36% years, with a sinking fund of one per. cent. _ In applying {or exemption from the requirements for the Criterion bridge loan the council advised that the materials used ip its construction were concrete and steel, and it was a Public Works Department first-class standard road bridge. The term of the loan was 36% years, with a sinking fund of one per cent. With reference to the application for exemption for. the Normanby Road special rating area, the council advised that the proposal was for. a sinking fund of 1% per cent, per annum, and it could not be increased beyond tlrnt amount. Also, the council could not agree that the estimated life of the proposed work was fifteen years. In support of this contention the council pointed out that the street in question was exceptionally solid for definite reasons. It was proposed to recondition the surface and seal with bitumen, which, with reasonable maintenance, should give a permanent work. The continuation of Normanby Road had been bituminised ten years ago, but owing to swamp conditions it had a bad subfoundation. Inferior metal was used, which necessitated rather, heavy maintenance. Nevertheless, the asset still remained, and would certainly last longer than another five years. The council was confident that, if properly done, the proposed work should last for 30 years. If it would not last more than 15 years the money certainly should not be spent at all, because, if lasting 15 years only, it woyld be destroyed by that date, and because it would be - destroyed tho annual expenditure of the amount of the interest and sinking fund, namely, £llO, would not be sufficient for maintenance of the existing street. In practical experience a street approaching the end of its life would receive considerable expenditure in maintenance. Thus the annual charge on Normanby Road would be something greater than £llO, and still it would break down if it lasted oply 15 years. For the expenditure of £llO a year four inches of metal could be laid on Normanby Road approximately every five years, so that a new wear course in macadam could be placed three times during the suggested life of the proposed pavement, and it w"s quite certain that the street would then exist. It appeared to the council from that reasoning that either its proposal was economically unsound or that the life of the road would be much longer than 15 years. Being forced by hard economic facts to consider permanent reconstruction of highways in the borough, the members desired to know if it was to be the Loans Board’s policy to consider bitumen-sealed streets to have a life of 15 years only, if that was the position the council would have to abandon its scheme. As it was desired to avoid any unnecessary expense in preparation, an early reply would be appreciated.