1983 — Page 82

Page 82 of 194

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HONG KONG URBAN COUNCIL

HONG KONG URBAN COUNCIL

Page 82 of 194

133

1984-85 Budget

For the 1984-85 financial year, the Council has budgeted for an expenditure of $1,752 million, with a revenue figure of $1,556 million, indicating a budget deficit of $196 million.

Expenditure

On the expenditure side, of the total of $1,752 million, 56.8% or $995 million represents personnel emoluments and allowances. This compares favourably to the 57.4% or $910 million for the 1983-84 financial year, as it means that a larger percentage of the Budget will have been spent on operational and non-recurrent expenditure, and capital works.

The provision of $995 million includes:

(a) 5% salary revision awarded in early 1983 by the Government; and (b) the staff costs for capital works projects to be completed within the approved capital works programme, and for manning new vehicles and equipment to be delivered.

The City Services and Cultural Services Departments have an establishment of about 18,000. Although a total of 196 proposals for increase of staff involving 1,579 new posts, an increase of 8.7%, had been requested by the Departments, the Urban Council has decided that the maximum increase for the coming year will be limited to 5%. In other words, as against the original request for increase in staff at N.A.M.S. value amounting to $79.4 million, the Council proposes to limit the increase in 1984-85 to $47.3 million, except under very exceptional circumstances.

As much as possible, the Council aims for increased efficiency and productivity and zero growth of staff for existing services and facilities. It is obvious, however, that additional staff would have to be recruited for newly completed capital works projects and for manning additional equipment soon to be delivered. In order to achieve better management of the Urban Council's wide-ranging services, facilities and venues, and to optimise utilisation of resources, a Management Services Unit will shortly be set up. Once established, it will conduct management services reviews on all activities of the Urban Services Department so as to improve management/operational efficiency and achieve cost effectiveness.

With the close co-operation between the Council through its select committees and the Urban Services Department, I expect that there will be continuous monitoring and a tight control over next year's Urban Council budget on both the income and expenditure sides, as has usually been the case in past years.

On capital projects expenditure for 1984-85, the Council has budgeted for $333 million, which compares favourably with the sum of $276 million for the 1983-84 financial year. This represents an increase of 21% and shows the Urban Council's commitment towards its building programme of the various types of district complexes, swimming pools, libraries, refuse collection points, playgrounds etc. for the ten districts in the urban areas.

Revenue

On the revenue side for 1984-85, the Council has budgeted for $1,556 million, out of which $1,175 million will be the income from rates and $381 million from fees and other income.

From our recent discussion with the Financial Secretary, we understand that the Government has provisionally agreed to a rate income figure for the Urban Council of $1,175 million for the 1984-85 financial year, subject to the approval of the Legislative Council. This sum is 17.8% more than the Council's current year's rate income of $997 million.

I would add that for the 1984-85 period, the Urban Council will not be seeking any increase in its rate percentage, which is currently 8%. However, members will recall that the Government not so long ago indicated to the public that it intended to have a revaluation of properties for rating purposes. When this will take place and what will be the new rate percentages are entirely within the Government's sphere of responsibility and not that of the Urban Council.

Council's Fees and Charges

The budget which is presented for adoption today makes no provision for a review of additional revenue arising from any revision of the Council's fees and charges for the next financial year. The additional revenue expected, however, will not be substantial, and in any case, such adjustments will be kept to the lowest level possible. In fact, the total income from the Council's fees and charges is secondary and will be less than 25% of the Budget expenditure.

Urban Council reserves

It is estimated that the Council's total reserves as at the end of the current financial year on 31 March 1984 would be about $267 million. Our best estimation for the reserve as at the end of the 1984–85 period on 31 March 1985, after taking into consideration some underspending and further revenue from fee revisions, should be about $130-150 million.

This amount of $130-150 million represents about one month's Council expenditure during the 1984-85 period. Members are aware that it has always been the Urban Council's view that our reserves should be to the order of three months' Council monthly expenditure to enable the Council to confidently plan ahead its capital works programme without adopting a stop-go approach, which will not be in keeping with the Council's responsibilities to the community. This is what I said when introducing last year's budget, and today, such is still the view of the Council. The Government's view, on the other hand, is that the Council's reserve could be maintained at as low a level as one month's expenditure.

Capital Works

In August this year, the Urban Council drafted a Five Year Forecast covering the period 1983-84 to 1987-88. The forecast included expenditure on major