WAITEMATA COUNTY COUNCIL

Kaipara and Waitemata Echo, 2 June 1921, Page 3

WAITEMATA COUNTY COUNCIL

THE FINANCIAL POSITION

At the May meeting of the Council a long discussion took place on the county finances, A report submitted by a committee set up for the purpose of investigating county finance reported that the total liability at date (May 24th, 1921) was £11,839. Takapuna riding's liability was £1893 (the highest), Mairetahi riding being the second lowest — £438. The treasurer presented the following report: —

Finance.—Some weeks ago I endeavoured to impress upon the council the seriousness of the financial position in the dominion and its natural reflection on local body finance. I then pointed out the heavy liability of the council and the necessity of having funds to carry on with during the winter. The system of your riding balance statement furnished each month is that there should be no overdraft on any riding account at the end of the financial year, and the bank overdraft would thus be available to enable the council to carry on with till the new rates come in. This system has been ignored since the date of its inception. In a measure the fault lies in the riding balance sheet crediting the year's rates before they are, even struck. Such credits are only paper opes, and the cash is not actually in the bank till almost the end of the financial year. Councillors therefore set to work to spend money which is not even collected, and the finances drift on. However, the financial position of the council needs more than a passing nod, and I ask that some serious consideration be given to the matter.

Briefly, the position is that the bank has offered to advance £10,000 by way of overdraft, and an arrangement was made for an extra £2000 a few months back. This latter advance was only temporary, as the bank, made it clear that the money was advanced only until such time as the Government grants came in, The liability to the bank was £7102, and you are asked to pass accounts to-day totalling £4000 odd. Your trust account credit balances at the balance amounted to £5300. As the new rates cannot be even struck until the new valuation rolls are confirmed by the Assessment Court, I do not anticipate any revenue in the immediate future, and would respectfully ask the council to provide the money necessary to meet current commitments, let alone the monthly flow of accounts. I might state that-each mail brings showers of accounts, and Mr Williams informs me that he has even now some £849 worth of unpaid and unchecked ac/s on his file. In addition there are amounts due for contracts let, and payment must be made sooner or later.

The council is" now drifting back to its old ways of spending grants without the monetary authority to do so being first received from the Public Works Department. Further, loan monies are being spent before the debentures are actually sold, and such expenditure as this has cost the council many hundreds of pounds in the past, as the Department declines to pay on any grant money charged up prior to the date of issue of the monetary authority to expend. 1 saw the bank authorities and tried to get the overdraft increased to £15,000, and they are in communication with the Board at Wellington on the subject, and I expect to get their decision to-day. Assuming that the council do get this increased accommodation, your expenditure has averaged £4000 per month, and it is safe to assume that no rates to any appreciable extent will come in until November next. This leaves seven months to finance, and it promises to be a hard winter. Seven months at this rate will absorb £28,000, and your overdraft to-day will be over £11,000. Say you only spent £1000 per month, the legal limit must surely be exceeded. So in these circumstances the most prudent course to adopt would be to cry a halt in most of the expenditure, as, if the"council issues cheques in excess of the limit allowed by law (which is the amount of general rate revenue for the preceding financial year), they are jointly and severally personally liable, and are open to be sued by the Auditor-General for such excess. I make this report with all due respect to the council, but feel sure that the position for the future must receive consideration and prompt action.