NAPIER FINANCES.

Auckland Star, Volume LXIII, Issue 259, 1 November 1932, Page 8

NAPIER FINANCES.

; BOROUGH'S POSITION SOUND, '..;. £30,000 SEBENIUBE ISSUE. !,' COMMISSIONERS' ASSURANCE. (By Telegraph.—Special to "Star.") N NAPIER, this day. The inadequacy of the amount of £250,000 provided in the Hawke's' Bay Earthquake Act to meet all the needs of local bodies arising out of damage done by. the disaster of 1931 has led the Napier commissioners to offer a debentures issue of £30,000 in order to •: complete the restoration of the princi- ■ pal services of the town. The original estimate for reconditioning the four main services—sewerage, water supply, storm water drainage, roads and streets ..' — was £162,000, and already over £120,000 has been spent, leaving a sum of nearly £40,000 still to be expended.] The municipal authorities have raised several loans'from the State Advances Department, under the provisions of the 3 ! Earthquake Act, which allows an initial period up to five years, during which the principal sum may be free of interest. Calls made by other local bodies, to- " gether with the Napier Borough, proved l! a'heavy drain on the resources of the State Advances Department, and a few months ago the Napier' commissioners were advised that they. would have to • raise any additional funds required on i the open market. One loan has since been raised from the Public Trustee, and it has now been decided to make a .' debenture issue to complete the work which is in hand. Simultaneously with the announcement of the issue; the commissioners have made a statement regarding the . finances of the borough, which, in view of the circumstances and conditions to which the earthquake has given rise, is an interesting document. Commissionera J. S. Barton and L. B. Campbell state unhesitatingly and without reservation 'that the position of the borough is " pound. The question naturally asked, jgpjr 4agb4*s. "How-will the, position, be

affected when, after five years' freedom from interest, the borough must face the payment of interest on loans which have been raised since the earthquake?"

The answer, according to the commissioners, is that with common business prudence in the management of the borough's affairs there will be no difficulty at all. Several factors can be enumerated to offset this future interest charge. Firstly, amounts spent during the last 20 months on restoration work will not recur arid the work done has eliminated much that would ordinarily have had to be carried out. Secondly, there is the benefit to the borough under the National Expenditure Adjustment Act. Thicdly, a saving of £1000 a year will be made in administration expenses when the commissioners' services are no longer required. Fourthly, the borough, as irom the beginning of next year, may look forward to income receipts from many of its endowments, which, since the earthquake, have produced no revenue. Finally, in 20 years' time the market reserve block built by the borough with a loan of £29,000, and the Criterion Hotel, built on a life insurance scheme involving £20,000, will revert to the borough unencumbered, together with accumulated bonuses of 20 years on life insurance policies worth £20,000.