POWER LOAN POLL

Bay of Plenty Beacon, Volume 1, Issue 98, 8 December 1939, Page 4

POWER LOAN POLL

A poll of ratepayers is to be taken ,by the Borough Council on Wednesday next on a proposal to borrow £7, 500 for purposes connected with the Borough electricity scheme. This sound and progressive trading undertaking finds need for additional capital to enable it to keep pace with needs consequent upon the exceptional development of the town. Electricity extension work is costly and there is a limit to which the ordinary revenues of the undertaking can meet this cost; also in sound business practice there is a limit to which revenues should be called upon for such purposes. In the case of the local- electricity scheme, this limit now has been reached and the Council finds that recourse to borrowing becomes necessary. In the same way as the owner of a progressive private business would enlarge his premises and extend his plant by recourse to borrowing, recognising that by this means of finance his business and returns will profit, so the Council must also borrow to meet the cost of the further development and expansion of its electrical undertaking. In this instance the expenditure will become revenue producing immediately it is incurred and no question of rating or increasing charges for electricity,, to meet the annual costs on the loan, arises. Indeed, in the course of a short time, the benefit of this method of finance should become apparent, when by the relief of the existing strain upon the revenues of the Department, (caused solely through the lack of capital loan funds) the Council will be enabled to give consideration to the matter of reducing its charges to consumers. It cannot be conceived that there should be any opposition to the proposal in which there arises no matter either of controversy or contention. In the matter of this proposal the Council follows the procedure which universally has for years been adopted by other electricity supply authorities throughout the Dominion.