Page 55 of 195
JA
80
2.
HONG KONG URBAN COUNCIL
THE CHAIRMAN, URBAN COUNCIL, moved the following motion:--- 'RESOLVED that this Committee resumes business as the Urban Council?
He said (in English):-
'RESOLVED that this Committee resumes business as the Urban Council.
MR. H. M. G. FORSGATE, VICE-CHAIRMAN, URBAN COUNCIL seconded (in English)-Mr. Chairman, I second the motion.
The question was put.
The motion was carried unanimously.
3. THE CHAIRMAN, URBAN COUNCIL, moved the following motion:--
'RESOLVED that the audited Statement of Assets and Liabilities and Statement of Receipts and Payments of the Urban Council for the year ended 31 March 1985 be adopted.'
He said (in English):-In accordance with section 36(4)(c) of the Urban Council Ordinance, I move the adoption of the audited Statement of Assets and Liabilities and Statement of Receipts and Payments of the Urban Council for the year ended 31 March 1985.
Members will note that the Director of Audit's Certificate on the Statements is not qualified by any observation on the manner in which the Council's accounts have been kept and rendered. However, he has raised two points in his Report which is also attached. Statements in clarification of these two points provided by the Director of Urban Services, which were fully discussed by the Standing Committee of the Whole Council, are attached to the Report.
Also in accordance with section 40(4) of the Urban Council Ordinance, one copy of the certified statements will be forwarded to His Excellency the Governor.
MR. H. M. G. Forsgate, VICE-CHAIRMAN, URBAN COUNCIL seconded (in English): Mr. Chairman, I rise to second your motion.
I would like to elaborate further on the accounts and comment on the overall financial position of the Urban Council. A 'paper' surplus of $32 million arose in 1984/85, instead of the anticipated deficit, as a result of a timing in billings and an increase in income from secondary and miscellaneous sources. The turn-around from the anticipated deficit to a surplus was mainly attributable to the $126 million underspending on capital projects, a large portion of which will remain a commitment since it must be carried forward to the present financial year. The surplus increased the Urban Council's reserves from $289 million to $321 million.
HONG KONG URBAN COUNCIL
Page 55 of 195
81
Following the re-rating exercise, the Urban Council reduced its rate percentage from 8 per cent in 1983/84 to 24 per cent (likely error, possibly should be '4 per cent' or another correction) in 1984/85. The Urban Council's yield from rates this year is expected to increase by 9 per cent to $1,237 million. The deficit is expected to amount to $106 million and it will reduce our reserves to about $215 million or the equivalent of approximately one month's expenditure. Based on the Five Year Forecast, a deficit of almost $240 million is expected in 1986/87. This increased deficit is mainly due to the additional cost of salaries arising from the 1985 Government salary revision and increased expenditure on capital projects.
It will be necessary to draw on the reserves in 1986/87 to cover the forecast shortfall between revenue and expenditure. The cumulative effect of the expected deficits in 1985/86 and 1986/87 will completely exhaust and exceed the reserves by $22 million. Additional revenue will therefore be required in 1986/87 so as to maintain reserves at a reasonable level. For this and other financial reasons, the Council's Working Group on amending the Memorandum of Administrative Arrangements with the Central Government is continuing its dialogue with the Finance Branch in respect of the Council's financial future.
The deficits now facing the Council emphasise the importance of the regular annual reviews which the select committees conduct of the various fees and charges under their control. Even though these are recognised as being only secondary sources of revenue, in the present financial climate the Council cannot afford to overlook any revenue source no matter how small, if it is to continue to maintain the standards of its services.
Furthermore, the Urban Services Department is exploring, as an on-going exercise, the introduction of more modern and cost-effective techniques to keep pace with changing circumstances. It is also actively pursuing management services studies and based on the detailed reports that have already been prepared, substantial cost savings and improved efficiency are expected. The Council's position is that while exercising all reasonable economies we do not wish the Council to reduce the manifold services that the 4 million (likely error, possibly should be '4.4 million' or another correction, but '44 million' is kept as per original) urban dwellers of Hong Kong have become accustomed to, and are in our opinion entitled to continue receiving.
May I second the motion.
The question was put.
The motion was carried unanimously.
4. THE CHAIRMAN, URBAN COUNCIL, moved the following motion:-
'RESOLVED that the Urban Council Annual Report 1985 be approved.'
Page 55
Page 56
Page 56 of 195
J
82
HONG KONG URBAN COUNCIL