Pukekohe Loan Scheme.

Pukekohe & Waiuku Times, Volume 5, Issue 175, 19 May 1916, Page 1

Pukekohe Loan Scheme.

TO THE EDITOR. Sir,—The ratepayers of Pukekohe will shortly have submitted to them a proposal which powerfully affects both the progress of the town and the amount of rates they may expect to pay in the future,, especially during the next six or seven years. We are facing the ciueial question- shall we attempt to pay for urgent public works out of rates or shall we go in for a loan ? The maximum general rate the Borough Council is empowered to strike is lid in the £, which will bring in £2250. Licenssfcfees, etc, dog registration, and Government subsidy and Hospital and Charitable Aid rate (which has hitherto not; been collected by the Council, but has been paid out of the general penny rate), the maximum lighting rate and library rate, would bring in another £1350. The total possible receipts from all sources is therefore £3600. Of course I am not tuggesting that the above rates should be struck or would in any case be struck. I am merely investigating the question of what is the most that might bo collected. Now we have the advice of Mr T. F. Martin, Counsel of the New Zealand Municipal Association, and the leading authority in New Zealand, that the Council's overdraft limit is governed by the ordinary rule, and is not restricted by reason of a loan having been once raised to pay off overdraft (as has been eironeousdy supposed). That ia to say, on 31st March 1917 our overdraft must not exceed the amount of our revenue for the year ending on that date ; i.e. it must not (on the above figures) exceed £3OOO. In other words we should have £7200 to spend, half of which it: represented by income collected and half by overdraft incurred. Now for salaries, orlice expenses, printing and advertising, lire prevention, valuation and audit fees,

insurauce, Hospital and Charitable Aid, legal .expenses, street lighting, subsidy to band and library, interest on part of an old Pukekohe East Loan and general contingencies, and overdraft from last year wc require £IOOO. Every single one of '.he above estimates is as low as we dare make it; the allowance for contingencies is extremely low. Add £7OO for road work (au amount whicli would not nearly sullico tj keep our roads in repair, and the greater part of which would be required to maintain King Streot alone) and we have au inevitable expenditure of £2300, as the lowest estimate to which the most sanguine can hope to couhne our expenditure. Uut of the above £7200 this leaves a maximum sum of iwOOO, with which new works might be prosecute 1. Of course the lighting rate would have to bo spent on lighting and the library rate for library purposes, and in so far as such rates are not expended for such purposes, the above figure of £SOOO available for extraordinary expenditure would have to be reduced.

Now, there is no one in Pukekohe

who takes any interest in municipal matters who does not understand there are certain urgent works requiring to be done. £BOOO is the

least sum that will cany out such works without doing them in a temporary and unsatisfactory manner, which would reouire further expenditure in the immediate future and involve the waste of the money now to be spent. It is therefore clear that an attempt to carry out such work out of rates is likely to be infinitely less economical and satisfactory than the >4oing of them out of a lean of adequate amount. However, there is another very important point. To do these works out of rates involves an increase of rates to a burdensome degree. You

will notice that it involves an increase of the General Kate by jO per cent and the striking ot separate rates for works now paid for out of General Kate. t This in effect increases the General Kate at least 75 per cent.' If the full lighting and

library rate were added the increase would be approximately 123 per cant. If this were the end of the business it would be bad enough; but even if ordinary borough work were to come practically to a standstill it would take probably at loast live years of such burdensome rates to pay oil' the overdraft and accumulated interest.

Now, it is, of eouiso, the keenest desire of councillors to avoid an increase of rates. All our councillors are ratepayers, and to pay increased rates is no moie joy to them than to other ratepayers. If thoy can possibly avoid raising tho lates they may be relied on to do so, After a £bod deal of consideration the only method the Council can think of for obviating a rise in rates, and tho method which the Council proposes and recommends to ratepayer, is the raising of a loan.

Increased revenue could be obtained by striking the full amount of the Town, District Special Eate in respect of watenvorks (which has bsen 1 educed by more than half by the present Council and the amount of which could by a simple device be made available for general puiposes) but I omit investigation of that matter because I do not think'there is any reasonable likelihood of such a proposal being made. There are also a few other possible sources of income too small to bother about. I am not advocating that any of the above rates should be collected, or advocating anythiffg at all in this letter. lam merely pointing out to ratepayers the greatest sum that can possibly be made available for any extraordinary expenditure if only rates and overdraft are relied upon, in order that ratepayers may better understand the position when fioauancial proposals are before them, as they shortly will.—l am, etc , H. G. R. MASON.