BOROUGH LOANS.

Taranaki Daily News, 24 October 1921, Page 8

BOROUGH LOANS.

OPINIONS OF RATEPAYERS. MEETING AT FITZROY. TWO PROPOSALS APPROVED. The loan proposals of the New Plymouth Borough Council, upon which a poll will be taken shortly, were discussed at a meeting of the Fitzroy Ratepayers’ Association on Saturday night. The loans which the ratepayers will be asked to sanction Ire one of .£142,000 for the refloating of loans falling due in 1922; an amount of £lO,bOO for providing additions and extensions to the waterworks, and a loan of £9OOO to meet extraordinary expenditure on t'he hydro-electric works. The meeting endorsed the first twp. proposals, but deferred passing a definite opinion on the hydro-electric loan.

Discussing the £1142,000 loan, the ehairman (Mr. R. L. Parkin) pointed Out that if the loan schedule was analyse! it would be seen that a good part of the money had been spent on departments which were revenue producing, such as electric light and water supply, which meant that these investments were self-supporting. At the outside there, would not be more than £60,000 of it “dead money,” namely, the portions spent on streets. All the suburbs that were merged into the borough at the time of the greater New Plymouth scheme had not been paying interest on this loan, but it was a condition that when this was refloated it would be spread over the whole borough.

A DEBT OF HONOR. Further information on the subject was given by Mr. J. Kibby, who said this was practically a debt of honor. It had been an understanding that the suburbs were not to pay interest on the loan until it was refloated in 1922, and he thought they ought to meet the obligation. On that occasion he had argued that in 1922 the extra charges would not hurt the ratepayers. Had the rate of interest continued at 4A per cent., and the money was raised at this figure and paid for over greater New Plymouth, the ratepayers would not have felt the extra cost at all. Coming at the. present, however, it was a little more serious, but the advance in the rate of interest was something no one could have foreseen. Personally, he was going to advocate every suburb voting for this particular loan, and he hoped it would be carried. During further discussion it was stated that the rate of interest would probably be 7 per cent., and with a sinking fund of iy 2 per cent, this would make a total of B.L A proposal will be put before the ratepayers asking them to sanction the payment of the increased

Mr. C. S. Foote said his* impression of the matter was that the loan had been borrowed and spent by the inner New Plymouth, and while the suburbs had not had any benefit, they were being asked to stand the cost. He noticed that the proposed rate was 3d in the £, or 1J per cent., which meant that a person with a property worth £l6OO would have to pay another £l2 10s in rates. BENEFIT TO SUBURBS. In reply to this Mr. Kibby said Mr. .Foote must be quite aware that the stipulation of a 3d rate was merely a le<>'al necessity, or, in other words, that the rate mentioned would meet the interest on £142,000 if there was no other wav of paying it. It was really a mort<ra"e to the bondholders, ana no more of°it would be collected than was absolutely necessary; it would be for the latepayers’ representatives on the council to see that they were not levied up to £l2 10s. Nir. Kihby said that though the previous' speaker had contended they were being called on to pay for something from which New Plymouth bad derived the benefit, he was personally of opinion that the suburbanite* had got great advantages, notably in the matter of water and lighting, and had not the borough invested to*' bring these undertakings up to a certain stage before the suburbs came in. they would not have the facilities they bad now. Mr. Foote said he had been referring to the portion of the loan which had not been revenue producing. He did not infer that they were going to repudiate the liability, as they were now part of New Plymouth.

Some particulars were elicited regarding the sinking fund. It was stated that now the loan was being refloated' it would be good business to make proper provision for repayment. At present there was a certain amount of sinking,fund, on a small scale, but it was understood this had been placed in the hands of trustees, and was invested. It was affected by the moratorium, and it might not be possible to obtain the money just when required. A resolution was carried endorsing this proposal and promising support at the poll. “We have got to pay it,” said Mr. Kibby. “We can meet it honorably this way or we can do it dishonorably by turning the proposal down.” WATERWORKS LOAN. The meeting also carried a resolution in favor of supporting the proposal to raise £lO,OOO for the purpose of extending the water mains. It was explained that it was essential that further additions should be made, as owing to the rapid growth of New Plymouth there were some localities in which numbers of houses were without v! equate protection from fire because there were no mains in the vicinity. The Borough Council hope to raise the loan at £5 12s 6d per cent including sinking fund, having decided to divert money which was intended for housing loans to this purpose. Although as one speaker said, the borough could do with a bigger loan for this purpose, the opportunity of securing a certain amount at a cheap rate was one that should not be missed. HYDRO-'ELECTRIC WORKS. The hydro-electric special loan of £ 9000 xas the subject of a good deal of criticism. The objects of the loan are to provide for the enlargement of Ko 2 tunnel and to- cover the cost of ascertaining by survey what further water (if any) is available for use in connection with the works. The chairman said lie was not in -fax or of this loan, as he thought the size of the tunnel, as previously decided on by the Borough Council, was capable ot carrying all the water which could be concentrated into the Mangamahoe valley from the western side. The tunnel was already capable of carrying sufficient water for the development or “000 h.p., and it was proposed to enlarge it to carry water tor another 3000 hn The consulting engineers had based their estimate of the supply from

the Waiwakaiho river on a flow of 150 cubic feet per second, but last year this river was down to below 90 cusecs. Mr. Parkin said that the Borough Council had secured a visit from a Government engineer (Mr. Kissell) to report on the question o-f a survey, but as yet the report was not to hand. After reviewing various developments in connection with the construction work, Mr. Kibby said that the capacity of the tunnel on the smaller .size would be sufficient to cope with 450 cusecs. The consulting engineers admitted that they could not calculate on more than 150 cusecs from the Waiwakaiho river, and there was room in the tunnel for three times this amount without any enlargement. During part of last summer the flow of the river was under 90 cusecs, and on this basis the tunnel could deal with five Waiwakaihos. When the question had come before the council he had voted* for keeping the tunnel at the smaller size and was still of this opinion. In regard to the negotiations with Messrs. Summerson and Sons, they had the opinion that the. Waiwakaiho was incapable of producing the minimum amount that was required by this firm even supposing that the power now devoted, to trams and electric light was also included. Therefore the people of the town must get it out of their minds that power for the ironsand works could be supplied from this quarter. He believed there was a source in the district which would suit Summerson and Sons and where they could carry out their proposals, namely to design, erect and run a plant. The firm should do this themselves, however, and it was not for the ratepayers to undertake. Mr. Foote pointed out that recently a. large public meeting in New Plymouth had endorsed the proposal to have a survey made. Mr. Steed:’ “But bow many at that meeting really understood anything about it?” The association had men on the executive who were more acquainted with the project. AN OPINION DEFERRED. The chairman expressed regret that Mr Kissell’s report had not come to hand, as no doubt it would have helped the meeting to come to a decision. As regards the proposal to divert water from the Mangorei stream, he doubted whether the council would be allowed to tamper with this stream. He understood the idea mooted was to divert it at Korito to the Mangamahoe valley.

Mr. Foote: My opinion is that the public are led by the newspapers a lot. Mr. A. J. Perrott thought it was quite premature to put the loan before the public until the survey had been taken.

The chairman pointed out that the council had a large amount of money invested, and they wanted this to be revenue producing as soon as possible. In his opinion plans and estimates in connection with the survey would take at least three months to prepare. The works were now costing about £3OO a week in interest alone. Tr the course of further discussion Mr. Parkin said that the council could not use further streams from the eastern side of the Waiwakaiho, as this would necessitate enlarging the No. 1 tunnel, this being the means of entry into the Mangamahoe basin.

It was eventually decided, on the mo tion of Messrs. Foote and Merron, tha' in view of the insufficient data avail able at present, the meeting defer giv ing an opinion on this proposal. The chairman said he presumed tha if the Government engineer’s repor was favorable the council would be ii duty bound to make r .rvey.