CORPORATION FINANCE.

Otago Witness, Issue 3006, 25 October 1911, Page 7

CORPORATION FINANCE.

THE CITY'S TRADING DEPART- . MENTS. At last week's meeting of the City Council Cr Stewart, having made reference- to some portions of the Finance Committee's report, said the only other item .was the clause dealing with the balance sheet fox th.> half-year. It was only right the oo lined should* have time to look into that, and probably it was a matter that could be brought -up at another meeting. But it might not be out of place to make a few remarks. The profits of the trading depart- ; ments for the half-year was £15,490. The profits for the corresponding half of last year were £12.850, and for the year to £23,686; but it must not be supposed that the profits for the whole of this year would be double of £15,000, because the halfyear just past was' by far the best for the departments, us a rule. Practically all the departments showed an increase of revenue for the last half-year, more especially the two lighting departments. The profits in the electric power and lighting department the first half of last year were £IOB6, and in the second half there was a loss of £2152. The' gas department in the first half of last year showed a profit of £5195, but in the second half there was a loss of £778, so that the total profit was £4416. The water department in the second half of last year had mad© a greater profit than in the first half, the respective figures being £6075 and £5527, and promised a larger profit this year, the profit for the first six months being £6897. The profits in the first half and second half of last year had been £1223 and £5328 respectively. For the corresponding half of last year it showed a profit of £loß6'. The electric power and lighting department profits this last half-year were £lll9, as against £IOB6 for the first half of Last year. The gas department in the first half of last year had made a profit of £5195, and the six months just expired it had amounted to £6063. Tine profit in the tramways department this year had been £lllO, and for the six months last year is had been £1223. It would be seen that they would have to rely largely upon trams and water for making. up the difference, so as to equalise or go beyond the total profits of last year. It seemed to be safe to anticipate that the lighting department this second half-year would probably give a better return than they did the second half of last year, because during the latter period wo had exceptionally dry weather, which had caused not only a shrinkage in the revenue provided by consumers, but had added considerably to expenses by the running of the steam plant and the purchase of water at Waipori. The position at Waipori had been very much improved, the storage having been increased by the completion of Lake Luolla, and even if the weather was similar to that of last summer and autumn the chances of shortage of water were not nearly so ,Qrreat>He thought it was gratifying that notwithstanding the concessions made i.n the tramwsy department the trams showed a profit for the six months gone by.

The following table will enable a clear comparison between the result of this and last year’s operations to be made:

Ur Marlow said tho half-year’s balance sheet showed that the electric power and lighting department had a credit of £1419, i as against £IOB6 for tho corresponding period of last year This seemed ' very pleasant till they remembered what had happened in the second half of last year, when there was a loss of £2152 or a debit for the whole year of £1066. That left a fear that they might have in© same thing to face in the latter half of this year but fortunately he was able to assure tho council that that would not be so. The loss in the second half of last; year was due to two factors: the increased cost of labour, the procuring of fuel, water, and tho building of a temporary race to get tho power that the dronghi had deprived them of. The same thing accounted for the increased expenditure in this halfyear. Their profit this half-year would have been much greater had it ,not been for the two months’ drought at the commence-

ment of the half-year. During the ensuing half-year, however, with Lake Luella full, there should be no fear of a shortage of water. They divided their electrical business into two parts—lighting and power. The first half of last year the revenue from liahting had been £6745, and in the secarsi! half it was £4352. The first half of the present year it was £7667. The revenue derived from power showed a steady upward tendency. The first- half of last year l it was £9526, and the second half £9696, and the first half of this year it was £10,859. He was satisfied that the department had now entered well upon a profit-earning period of its existence, aiid that at the end of the year there would be a fair balance to credit. Acting upon the authority given by the council at its last meeting. Mr Stark and himself were leaving for Wellington next evening to make additional provision for water to work the present plant, ana to ensure that when a triplication wasinstalled they would not be in the positiort they were in last year-insufficient water for their requirements,—but would have sufficient to run the triplication; and hebelieved that if the matter was fully nut before the Government it would see the importance of this to the city of D-unedin and grant what the department required. The Finance Committee's report was then adopted.

Department. 1910. First half to Sepember 30. Second half to March 31. Total for ve:ir. Gas >• £5195 2 0 £ 778 19 10 £ 4,416 3 3 Water ... . . 5527 10 4 (loss) 6075 4' 1 11,602 14 Tramways ■ 1223 2 11 5378 0 1 6,601 3 0 E. P. and L .. 1086 5 9 2152 16 2 1,066 10 5 Gas 1911. .. £6083 G 5 (loss) (loss) Water .. 6897 7 5 Tramways . 1110 0 0 — E. P. and L.. .. 1419 13 10 — —