HOROWHENUA ELECTRIC POWER BOARD.

Manawatu Herald, Volume XLVIII, Issue 3030, 1 May 1926, Page 1

HOROWHENUA ELECTRIC POWER BOARD.

THE HORSE POWER BOGEY. THE CHAIRMAN’S COMMENTS. The chairman, Mr. G. A. Monk, ■complimented the treasurer on his report the context of which was published in our last issue. It was concise and to the point, and it made the whole matter very easily understood. At first sight it might appear to members of the Board, and to the general public, that a huge profit had been made during the past year, but lie would like to point out that though the position was highly satisfactory, the Board had not quite made the profit that the figures showed in the balancesheet. During the past year they had taken the opportunity of paying a considerable amount of interest and sinking fund out of loan monies. Had the interest and sinking fund payments been made out of revenue the £12,000 profit shown would have been reduced by £9OOO, and the position revealed would have been very different to what was found on the provisional balance sheet. The question was —what would be the revenue in the next twelve months? In the past year the revenue had been £26,000,

of which £25,000 was for sales of current and meter rents. As a setoff against this they had to take into consideration that about £9OOO had paid for current in the past year, but this year the Board would possibly have to pay about £13,000 although, of course, there would be a 'corresponding increase of revenue. Another point was in connection with the revenue account and the gross profit on sales of £1477. The actual profit would be considerably less than that. During the coming year the Board was not going to have those sales, therefore there would not be the profit. They could wipe out £IOOO there. The Board would also have to take into consideration that itwould be necessary to return the sum of money which had been paid into the Public Trustee as sinking fund out of loan money. No trading concern could expect to carry on if they drew from capital to establish a sinking fund. They had been granted permission to pay two years’ interest and sinking fund out of loan and the sinking fund amounted to £BOO a year, a total of £IOOO that would certainly have to be returned to loan out of revenue. When it was repaid it could be used as needed in the construe-

ion account. One of the things that had wor-

■ied them, continued the chairman, vas just how to proceed in regard ;o loan money. They still had au.hority to pay a further £4OOO of nterest out of loan and they pro-

posed to consolidate their position by doing that. The estimated expenditure on construction was somewhere about £6OO, so that there was a total of £IO,OOO which would have to be found (all out of loans) within the next twelve months. There was some money in

hand, and some coming in, and Mr. Goldsmith had suggested (that a certain amount of loan money could he returned out of revenue and it

did seem that, by being careful, the Board would be able to get through without borrowing any more money direct from the lenders, with the exception of a small overdraft towards the end of the year. At first sight the position did not appear difficult, and he thought the recommendation of Mr. Goldsmth was a satisfactory way in which to proceed, and if the revenue was buoyant he had no hesitation in saying that the Board might be able to get through without paying any Bank interest at all. REDUCING CHARGES. The chairman went on to say that there were difficulties in connection with the milking plants and dairy factories rates. It certainly had been suggested that if any reduction was made the first would be given to the dairy farmers, but the speaker thought the Board would have a better chance to consider this question when a report on the subject was brought down. It required very careful consideration. There were so many different points attached to it, some of which affected one board without affecting another, but practically every board in New Zealand was up against different factors. In one district, for instance, there might be a large lighting load without a dairying load. In another district it might be wholly a dairying load. At the present time it was being stated that boards other than this were giving a cheaper rate. So far as the dairy factories were concerned, two quarters of the year were alright, the other two were not. For instance, there was a peak in April, but the consump(Concluded on Page 4).