POWER BOARD FINANCES

Poverty Bay Herald, Volume LV, Issue 17241, 24 April 1930, Page 11

POWER BOARD FINANCES

GROSS PROFIT ABOUT £9OOO NOT MUCH SURPLUS EXPECTED Though the Poverty Bay Power Hoard did unexpectedly \vefl in the way <>i revenue during the year just closed, and had a gross profit of about €9OOO. there will bo practically no surplus on the year, the. members of the board wee told to-day. An amount approximating ££SCO has'been spent already on capital construction, and the 'balance of the gross profit, will be eaten up by the necessity of setting aside depreciation as required by the Local Bodies' Loans Board. However, the situation of the board financially is extremely good, according to the chairman, Mr." F. It. Ball, and when the ratepayers are approached in due course for permission to raise a loan for further construction of country lines it will be possible to show that the expenditure is justified. The secretary. Mr. V. L. Sanders, gave the members some approximate figures as to tiie board's linaires. explaining that by next meeting it would he possible to place detailed statements before the members and the ratepayers. The gross revenue last veal 1 was about £48,000, as against £37,006 for the previous year, air increase of about £II,OOO. It could not be expovtcd that this rate of increase would be continued, for the growth of the board's business had been very rapid, and it could not expand at the same rate indefinitely, If the ensuing year showed half the increase <>l the year just closed.'the board should bo well' satisfied. Thjj gross profit was about C9OOO. of which £2500 had been spent on construction, while Hie rest would be almost completely catc:i up by payments into depreciation fund, both for tlie current year a.ti'd for past years. CRITICAL TIME PAST.

The chairman commented that he was absolutely safe in saying that the critical time of the, board's history was past. They would find many problems ahead, But (here could be no fear of making a loss now. The main question now was how soon they could make a general reduction in the cost of* current; they must- build up their business and their reserves, of course, and keep the business on sound financial lines, irji.'luding provision for current and prist years' depreciation on their invest men!. 'l'be\ must, of course, be very careful, but they could go forward will) every con faience unless something most unexpected developed.

The main problem for Iho next six months. Mr. Hall said, would he thai ol raising further money for capital expenditure, carrying on the work of extending the connb'rv services.. If the board could not obtain authority for raising a loan for capital expense, and had to do this work out of revenue, they could not bring the price of current. down, and there would be the necessity, possibly, for a rate. We was fully confident, however, that the ratepayers would sanction a reasonable loan for extensions, particularly in view of the satisfactory results obtained so far. Mr. T. Corson remarked that loans are anathema to the ratepayers just now, but Mr. A. C. Steele countered this remark with the statement that as between a loan and a rate, he would infinitely prefer the loan, as would most people.

The chairman, continuing, said that ho personally had no fear of the result when the hoard asked for a loan. There was plenty of development in sight, and the increased revenue would more than compensate, for the addrtionul expense. Had the board not spent so much of its revenue in past construction, it would have been in a position to make reductions in the cost of current beyond those now in force.

In reply to a question. Mr. Ball stated that hff had no idea yet just how much money would he required. Tim board could do with £15,000, now. 'but might want more laier for • extending the' •wintry services further into the backblocks.