ELECTRICITY LOAN

Bay of Plenty Beacon, Volume 1, Issue 99, 11 December 1939, Page 5

ELECTRICITY LOAN

* FORTHCOMING POLL

DUTY TO RATEPAYERS

In a circular to ratepayers, the Mayor, Mr B. S. Barry, emphasises the importance of the forthcoming electricity poll. The letter reads:

A poll of ratepayers is to be taken on December 13 on a proposal to borrow £7,500 for purposes connected Avith the Borough electricity supply scheme, and the following remarks are intended to explain why it is necessary to consider borroAving this amount. The development of the toAvn over recent j-ears has resulted, in an exceptional demand for capital expenditure upon extensions and additions to the electrical system; during the year ended March 31, 1938, such expenditure amounted to £2554, in 1939, to £4525, and for the expired seven months of this year to £2368. These moneys thus far have been found from the ordinary revenues of the undertaking (i.e. from the month to month receipts from electricity sales) and the time has arrived when this exceptional

drain upon revenues must be eased by recourse to borroAAing. In the

same fls the tw'per of a-pro-gressive priV&tfi business will- enlarge his premises and extend his plant by recourse to borrowing( so the council must also borrow to meet the cost of the further development and expansion of its electrical undertaking. You may be interested to know that in the year ended March 31, 1938, payments from the electrical account exceeded receipts by £795, and in the following year by £1393. A similar financial trend continues in the present year. The undertaking must, of course, be kept financially sound, and steps jnust now be taken towards finding additional moneys to meet the exceptional demand. Three alternatives in this direction present themselves, and these are (1) increased charges to electricity consumers, (2) raising the necessary moneys by an increase in rates, or (4) recourse to loan moneys. The latter alternative is being adopted by the council and this me-! thod is considered to be qilite sounclbecause the expenditure, while being essential at present, is substantially of benefit for future years. By the means of a loan the expenditure will be spread over an extend ed period, for to expect the consumer or ratepayer of the present day to meet these costs, which easily can be borne by the undertaking if the cost is spread over several years by recourse to a loan, is considered by the council to be quite unreasonable.

No doubt exists in my mind that the annual charges on the loan can be met Avith ease from the revenues of the undertaking, and although a special rate is necessary by law to be struck as security for the loan, that no portion of such rate will ever require to be collected. On the contrary the relief which the raising of a loan will give, will enable the council, within a short time, to consider reducing its charges for electricity supplied.

Should any further information be required yon are invited to write or phone the Borough Office.

As I have endeavoured to point out above, this issue concerns you directly and it is trusted that, at the poll, the proposal will receive your support. Polling date, Wednesday, December 13 from 9 a.m. to 7 p.m. Polling booth at the Borough Council Chambers.