The sun., 1908-12-17
CITY UP TO THE DEBT LIMIT
ne gP1Hr OF CHARTER REvIS-
ER0 TO GOTERNOR HUGHES.
1'fhse 70 Can n Halt. They say--The Best
They Can DO Is 10 Cipher Ont an
nS.0OO. 900 Margin and They Are
More Than Doubtful About That.

M0ke Than Doubtful About That
rhe city has reached the debt limit
according to a report which has been sem
to the Governor by a subcommittee oi
The Charter Revision Commission. afteI
an examination Of the financial affair
of the municipality.
y The report says that under the most
Z favorable view that can be taken the mar
II gin left Is only s.. .5s2. ;05. The committee
+ however, goes further and says that II
( the deductions provided for by the Con
y stitution from the city's assets are made
the borrowing power OF the city has beer
Exhausted. The only remedy the com
mittee sees Is to go to work and collect
( arrears of taxes on real estate. persona
+ property and special franchises and as
sessments for improvements, the whole
amounting to Ss5. 760,05a
The subcommittee is made no of Will.
lam M. Wins, chairman Of the Charter
Revision Commission; T,r. r. r. L, Gould
chairman oil the subcommittee on debt
limit, George j. Duval George Me- neny
and Comptroller Metz The report IL
signed by Mr. Metz, although it criticises
i severely the methods by W hich the Finance
Department has hitherto sought to work
4 out the city's debt margin. Mr.. Metz has
been complaining himself that the anti
squated bookkeeping Of the department
makes It impossible to find out Just where
the city stands
The report says that the Comptroller
.tufgured out that 10 per cent of the assessed
IS valuation of the real estate OF the city
sein 1908 is SS72 ,24i SIS, and that after all
& obligations for funded debt and contract
liabilities are provided TO there is bor-
rowing capacity left OF s37, ,93i GAO Bat,
according to the report this apparent
margin Is obtained only By leaving out
Of the calculations Of the city's indebt-
edness lands which have been ordered
Z 10 be condemned but which have not
been so condemned, and the cost Of i'm
provenents authorized but not yet con-
tracted for. 1t is the opinion of the
{ committee that these authorized expen-
sditres should appear on the debit side
OF the city ledger as soon as authorized.
The obligation is contracted and pro-
vision should be made to meet it before
3 incurring other debts which might run
: over the borrowing margin
The custom of permitting the Comp
Z troller TO withhold from the list of munich
: pal debts the amounts of contracts which
have been made by the city but not actu-
: ally certified to by him is condemned.
Under this system it is possible for the
E Comptroller from time to time. by fail
: ing 10 certify such contracts, to contract
( or expand the apparent borrowing ca
] paoity OF the city, "a practice which we
do not believe was contemplated by the
& Constitution, notwithstanding that no
& contract can be sued upon until so certi-
fed"
Another procedure that should be rec
tified. it is urged by the committee, is
the practice Of the Comptroller to put
to the credit Of the city un expended bal
ances from sales OF corporate stock which
i, have been issued for specifically named
improvements. The committee men
tions also that there are now about rs, 600
I. Ections Tor damages pending against
the city, but that no provision has been
made by the Comptroller in striking his
balance for the judgments which may be
obtained against the city. The report
goes on to say:
In view OF the foregoing, We now call
attention to what we believe to be neces-
sary readjustment of the estimated margin
of borrowing capacity as shown by the
statement Of the Finance Department.
namely, s37.e3i.eto.
Addtional estimated land liability ses, 500 600
Contracts ist but not certiied ,,... s.SccSSS
Total. 50. .S4saSS
Readjusting the Comptroller's figures
by the deduction Of this amount, we have
! remainder OF but 1852, ,705, exclusive
OF contracts awarded but not yet in the
Comptroller's hands. and contracts for the
purchase OF real estate, still unconsidered.
The committee believes that the Con-
etitution makers never intended that
: special franchises should be classed as
real estate and their assessed value reok-
oned with the assessed values Of real
estate against the debt limit. The re-
port says:
This point is now aised that the term
real estate as used in the special franchise
law u not the term real estate" as used
IN the Constitution: that the Legislature
cannot enlarge the meaning Of the Consti-
tution directly by the attribution OF new
meanings to terms used In tho Constitution,
nor indirectly by the attribution to the
Constitution OF new meanings adopted by
the Legislature for purposes within its
power but not referred 10 in the act or fore
seen by the Constitution. IL this conten-
tion be correct, then the assessed value OF
real estate as OF July 9. 1905 will have TO
be reduced by the amount OF s492. 400, 40
thus reducing the basis OF the calculation
for the determination OF the city's borrow
log capacity by 10 per cent. Of such sum,
or tle.2ts.o47. This is a matter OF vital i'm
portance. and as 1t is answered In one way
or the other must determine the immediate
future course Of the municipal authorities
In respect OF the further issue OF corporate
stock.
At the same time it is agreed by the
committee that the Legislature has the
power to prescribe the method by which
the borrowing capacity OF the city shall
be determined, provided it does not
violate the prohibition OF the Constitu-
ton. This may refer to the exemption
OF loans for income paying improvements
from listing in the limited debt. Finally
the report says:
We eafe OF the opinion that when the
borrowing capacity OF the city has been
80 nearly exhausted as IT. appears at the
present time tn he whatever borrowing
capacity remains should be treated purely
ss factor Of safety. That the city is in
its present condition and that the borrow.
ing capacity Is at the moment so limited
is manifestly due, among other things. |
10 the fact Of the city's failure TO collect
its taxes and assessments. There was due
the city as OF November for unpaid "a yes