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HONG KONG URBAN COUNCIL
cushion. And now I can tell you the good news which is that we do have that cushion. Members will remember that in my statement to this Council on 8 December last year I forecast a projected surplus HK$128 million mainly as a result of unbudgeted additional rates revenue then advised by the Government and also anticipated savings in staff costs. I am very pleased to be able to tell members that in fact our expenditure during the year was held successfully well below the original budgeted figure and that we saved HK$85 million on personal emoluments, HK$29 million on operational expenditure, HK$16 million on special expenditure and we did not have to spend the HK$28 million we had budgeted for additional commitments. We had to, however, increase our capital expenditure by HK$22 million over budget. That means that our total expenditure was HK$136 million lower than originally budgeted, amounting to a total of HK$2.119 billion and I want to congratulate members of the various committees and also the Urban Services Department for the savings which were achieved during the last financial year.
In addition to these excellent expenditure figures our revenue increased by HK$157 million because, not only did we get the additional rate revenue I mentioned in my December speech, but Government during the last financial year issued its rate notices earlier than customary and because, as you know, we now receive a share of the rate from the Government as soon as Government receives them, and ratepayers in their wisdom sometimes pay them early, we received an advance payment of rates amounting to HK$87 million on the 31 March, i.e. on the last day of the financial year.
If we were using commercial accounting we would, of course, have taken this advance payment into this year's income figures. However, under Government regulations we must stick to cash accounting so the HK$87 million appear within the total figure of HK$157 million unbudgeted extra income in the 1987 financial year I have mentioned. But, of course, that means that our income for this present financial year will be reduced by that HK$87 million.
Anyhow the net result is that we estimate a surplus of HK$308 million for the year which will give us a reserve totalling just over HK$700 million which means that we have the desired three months reserve we have always said we need which we hope will protect us from any possible unpleasant surprises.
Now that's a very good looking figure and the surplus is something to be pleased about. However, please remember what I said. From the surplus of HK$308 million you have to deduct the HK$87 million advance payment which really belongs into the present financial year, plus the HK$70 million unexpected pay award to our staff which, although being paid in this financial year belongs partly into last year's figures and the balance is not budgeted for in this year's figures, so that the real surplus is about HK$150 million and that HK$150 million has been achieved by savings in staff emoluments and other expenditure and the additional rate income which was properly due to us last year. Our financial position therefore, as of now, is satisfactory and, subject to the usual unforeseen circumstances, should remain so also in this financial year.
MOTIONS
1. MR. SAMUEL P. W. WONG, CHAIRMAN OF THE RECREATION SELECT COMMITTEE, moved the following motion:—
'RESOLVED that the Pleasure Grounds (Urban Council) (Amendment) (No. 2) By-laws 1988 be made under section 109 of the Public Health and Municipal Services Ordinance, Cap. 132.'
He said (in Cantonese): Mr. Chairman, as Chairman of the Recreation Select Committee, I rise to move the motion standing in my name:
'RESOLVED that the Pleasure Grounds (Urban Council) (Amendment) (No. 2) By-laws 1988 be made under section 109 of the Public Health and Municipal Services Ordinance, Cap. 132.'
I would like to explain something of the rationale behind the revision which features a system of differential charges to take effect as from 1 May 1988.
Hire charges for tennis courts were last reviewed in July 1986. Recently the department completed a costing review on tennis courts from which certain significant points emerged.
Not only staff costs but also costs for maintenance, equipment, fuel, light and power have continued to increase. Floodlighting costs alone already amount to about $11 per hour.
As a result, the overall deficit on the operation of tennis courts went up from $3.93 million in 1986-87 to $4.11 million in 1987-88. If hire charges remain unchanged, the loss will rise to $5.08 million in this new financial year, with the subsidy level rising from 39 per cent in 1987-88 to 43 per cent in 1988-89.
The general usage patterns for tennis courts show that the highest periods of high demand are on weekdays after 5 p.m., as well as all day on Saturday, Sundays and public holidays. However, during less popular periods, usage of the courts falls to 42 per cent.
Differential hire charges for tennis courts during peak and non-peak periods are not new. They had to be introduced before 1 April 1984, but were abandoned from that day because usage rates had become generally high at all times.
However, since 1984 the number of tennis courts has increased from 67 to 98, and the result has been a significant decrease in demand during non-peak hours. In short, we are back to the pre-1984 situation, and therefore the differential charges system is to be re-introduced so as to encourage the public to use tennis courts during non-peak hours and thus achieve better cost-effectiveness.
Under this system, charges for non-peak hours will remain unchanged at $17 per hour, but hourly rates during peak hours will be increased from $17 to $25. In other words, if there are two players, each of them will have to pay an