WATER AND DRAINAGE LOAN EXPENDITURE.

Manawatu Herald, Volume XLIV, Issue 2452, 11 July 1922, Page 2

WATER AND DRAINAGE LOAN EXPENDITURE.

MAYOR REPLIES TO CRITICISM. At last night’s Borough Council meeting the Mayor replied to certain statements which he said had been made verbally and in the Press, adversely criticising the “cautious” policy of a section of the Council in carrying out the water and drainage scheme. Referring to the statement that there is little use in prolonging the work at the i-ate of expenditure of £5,000 per year the Mayor said the loan proposal was carried on the Bth of September, 1920. There was a great deal of preliminary mattei's to be undertaken before the actual work could be commenced, “viz., negotiations with the State Advances Office-in securing the first instalment of the loan, also detailed surveys and plans of the whole scheme had to be prepared by the engineer. The Council had little or no control in speeding up these works. The first sod was turned on or about -the 11th of March 1921, or 16 months ago, and the expenditure to date is approximately £20,000, being at an average i-ate of £15,000 per yeai’, or an average i-ate of expenditui’e from the date of the poll of £10,900 per year, and not £5,000 per year as stated. In considering the best way of raising the money to carry out the scheme the inembei-s of the past Council had two courses open. (1) They could have recommended the loan to be secured iri v a lump sum, or as required at- a minimum rate of 54 per cent, interest with 1 per cent, sinking fund. Had that course been adopted, the whole work could probably have been completed three months ago. After mature deliberation the Council decided to favour the second course, viz., the l-aisxng of the whole sum in yearly instalments of £IO,OOO per year from the State Advances Office at 4$ per cent, interest per annum. The ratepayers with all the facts before them very wisely endorsed this proposal at the ballot box, carrying it by three to one majority. The Mayor said he wished to emphasise the -aving to the ratepayers of one per cent interest per annum -on the principal spread over the whole period of the loan, 36i years-. This direct saving works out in simple interest to £12,775. In addition to this sum, compound interest over the period would amount to over £12,000 or approrimately £25,000 total saving in interest. Further, under the present policy of the Council of the judicious purchase of materials on a falling market the completed cost will be by at least £7,000, as compared with the cost of materials at peak prices. In other words said the (Mayor, had the' work been completed quickly it would have meant an additional expenditure of £7,000 more than the finished sost under. v the present pi-ocedure. In support of this statement the Council rercntly ai-cepted a tender for pipes ; at a price £3,400 below the price tendered 12 months ago. The total saving to the Borough as.compared with the first course outlined is as follows: —Savng in interest on £35,000 at one per cent, for 36$ years, £25,000, plus interest anr sinking fund in repayment of same at 5$ per cent, per annum, £7,035, making a total of £39,000, representing an average saving of £1,068 per annum.

The Mayor considered this is a very handsome retnm for the exercise of a little patience which is not always rewarded so liberally. In regard to the employment of labour the Mayor said it has been and is the policy of the Council to give work to our own citizens. Had the work been prosecuted rapidly to completion we would have been compelled to engage a large number of men from other centres. Probably a fair percentage of wages paid would have been taken from the town, thus adversely affecting local business, and the work being finished we could not have given any assistance to the unemployed in the form of labour during the present winter months.

The Mayor’s explanation was endorsed by the Council, i- The Mayor also gave details of Jiis recent visit to Wellington and >.' his interview with the Minister of Finance re a further increase of £5,000 out of loan for the current year. The request would be favourably considered in four or five months time. In order to carry on he suggested raising the £5,000 by short-dated debentures. Cr. Ross said as there was a doubt about securing the extra £5,000 for this financial year, only a—portion of the order for pipes should be executed. It was useless to have all the pipes dumped when such portion of the loan money could be used to prosecute a definite portion of reticulation. He would like to see a defined portion of the borough, preferably the more thickly populated area, reticulated, and to complete the balance when the money was available. > Cr. Walker agreed with this proposal. The Mayor said that the Council . could not break its contract with Messrs A. D. Riley for supply >o£ pipes. Such proposal might lead the Council into difficulties. Shortdated debentures for £5,000 at six per cent, could be arranged until they could obtain the loan money. Cr. Ross said the money would only be required for three or four months. He gain urged that the work be proceeded with at once. A letter was received from Messrs Riley and Co. Ltd., re cast iron pipe contract, agreeing to a reduc- vtion of £172 11s 3d as a result the Mayor’s interview with the firm's ~

ft: .representatives, and-asking to have ■ >' the Council’s-confirmation of same. -- The Mayor’s action was endorsed. SEWER.-AND WATER ' CONNECTIONS. / ' FINANCING THE RATEPAYERS. REPLIES FROM OTHER MUNICIPALITIES. A number of Replies were erceived from other municipalities as to what financial assistance, if any, is • provided to assist ' ratepayers to instal the water and sewerage connections in their residences. The Feilding Council intimated that no provision was made. Petone included a sum of £6,000 jiutheir loan, which was advanced on the instalment system, repays able in five a years in half-yearly payments, bearing interest at 6 per cent/, with a recommendation that the Council undertake the. work as against private firms, in order to keep the cost within <jue limits.. The Palmerston Council made arrangements whereby ratepayers ~ were to be assisted under certain safeguards, but ratepayers made arrangements with plumbing firms, who carried out the work on the system, charging an additional 5 per cent, above the actual cost, and saved registration of .documents under the Council scheme. This scheme was recommended for Foxton. LEGAL OPINION. The following legal opinion was received from the Association’s solictor re loans for the above purpose : ;“(I).There is no statutory provision under which the Council could raise a loan for the purpose of assisting householders to instal water service connections. The Municipal Corporations Act, 1920, which provides for the raising of loans to assist householders in the matter of drainage and sanitary works under Part 22 of such Act and in, the matter of connections contains no similar power as to water connections, see 228 and 283. It is particularly to be observed that s. 228, notwithstanding that it mentions sanitation works, refers to moneys payable by owners under part 22 of the Act, and that although a water eonnectipn maw be cla'ssed as a sanitation work, it does not fall within the enumeration of work given in s. 224 under the same part of the Act. Further, the raising of such a loan would not come within the Local Bodies’ Loans Act, 1913, s. 3 or "the Health Act, . 1920, s.s. 22—24. jb< 2, The Council cannot raise a loan to assist householders tojnstal drainage and sanitary,, connections and appliances under the said s. 228 without taking a poll of the ratepayers. S. 228 does not provide that the steps under s.s B—l2 of the Local Bodies’ Loans Act, 1913, need not be taken so the ease does not come within s. 16 of that Act nor does it come .within the said s. s. 22 —24 Health Act, 1920, which reter to sanitary works to he provid- ... ed by the local authority.” The Mayor said a loan.for assisting householders to connect appeared to be a burden rather than a blessing. Foxton had made a big concession to ratepayers in laying the mains and sewers up to the boundaries, whereas in other .centres a charge of from £4 10s to £7 had . been made for this work. It would be necessary to ascertain how many ratepayers -required as-r sistance to put in their connections. More definite information was required on this point. ( Cr. Martin said it was compulsory for ratepayers to connect. Cr. Walker said some assistance to householders would be necessary. The Mayor said an 'outside firm of plumbers was- willing to undertake the work on similar, lines to Palmerston, provided the Council . gave a guarantee as to payment. A Councillor; “That alters the easel” . It was decided to hold oyer the matter until further information was obtained.