The Horse Power Bogey.
The Chairman's Comments. Th'e chairman, Mr. Cf. A. Monk, complimented the treasurer on his report.
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 he 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 balance sheet. During the past year they had taken the opportunity of paying a considerable amoulit 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 reveiled would have been very different to what was found on the provisional balance sheet. The question was —what would -be the revenue in the n'ext 12 months? In the past year the revenue had been £26,000, of which £25*,000 was for sales of current anxl meter rents. As a set-off against this they had to take into consideration that about £9OOO had been paid for current in the past year, but this year the Board would possibly have to pav 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. he actual profit would be considerably loss than that. During the coming year the Board was not’ going to have those sales, therefore there would not b'c the profit. They could wipe out £IOOO there. The Board would also have to take into consideration that it would 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 5 interest and sinking fund out of loan and the sinking fund amounted to £BOO a year, a total of £I6OO that would certainly have to be returned to loan out of revenue. When it was repaid it could be used as needed in the construction account.
One of the things that had worried them, continued the chairman, w T as just how to proceed in regard to loan money. They still had authority to pay a further £4OOO of interest out of loan and they proposed to consolidate their position by doing that. The estimated expenditure on construction was somewhere about £6OOO, so that there was a total of £IO,OOO which 1 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 be 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 diffi- ' cult, and he thought the recommendation of Mr. Goldsmith 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 j Board would have a better chance to consider this question when a report on' the subject was brought down. _ It I 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 Now 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 consumption fell away in June. Payment was made on the April peak, but the consumers took practically nothing in May and June. The position was the same in the other quarter, when the peak came towards the end. It had been felt by some consumers that the power boards were getting something for nothing. That was not so, because the board paid on exactly the same basis for its current. It paid on the peak month of the quarter. Difficult as the position was he hoped they would be able to bring down something that would give satisfaction to the dairy factories. Those boards, who, perhaps, had large lighting loads could afford to give a low milking rate. The Hutt or WanganuiRangitikei Boards could give a low rate for milking, but that did not apply here because the Horowhcnua Board's lighting load was not heavy. If any concession was given to those particular users, and it had been proposed to give to those dairy factories and milking users some consideration, it would have to bo taken into account in dealing with their surplus for this particular year. Two other factors that the chairman called attention to were that in the first quarter of the year under review they did not have anything like the load that they had last quarter. The other point was that they could not expect a great increase of load in this district during the coming year. ~ Plea For Meter ftents. Mr. V. H. Gunning said he would like to have seen the question of meter rents taken into consideration, as a great deal of opposition was put forward in regard to the meter rent question, and people were pointing out that the meter was a very expensive article, as they would be paying for it over and over again. He thought that as soon as the Board was in a position to re- i view the charges and make reductions,
the meter rents should be the first $0 ( come off. He would bs sorry if the Board could not devise some mvthod of reducing this charge. He did not say the Board should cut it out altogether, but there was a good deal of comment on the fact that some of the other Boards did not charge a meter rent. Again there was a good deal of opposition to the charging of a reduced rate for a large quantity. It was said that it was an unfair thing to a man who was milking ten or twenty cows to pay 4d a unit, whilst a man who, possibly, used current in excess of that quantity would, perhaps, only pay 2d. It was a question whether the flat rate was not the fairest thing, after all was said' and done, for the man with the small herd. It.was just as important to the man who had 20 cows as the man who milked a hundred. Mr. Monk said .that the position was, unfortunately, this: That a man might use only a hundred units a month compared with one who used 300 units a month, and yet the former would cause just as high a rise in the peak load as' the latter man. It was the peak that the Board paid • on. ".Regarding the question of meter rents, the Board were entirely In sympathy, but he would warn them, that if any reduction were made they would need to exercise great care. Last year about £9OOO was paid out of loans, for interest, but this year the money would have to.'-be paid out of revenue, and in order to make ends meet the Board would 1 need a revenue of something like £3.0,000. The dairy rate trouble lay less in the matter of a reduction, but more in the nature of putting the thing 911 a level basis. The treasurer had compiled, a list of 70 average dairymen in the. Board's district, and had taken the Horowhcnua flat rate and unit rates and compared them. With neighbouring Boards'*unit rates. -The members would be surprised to learn that , there was very little difference. ' , Mr. G. Ivilsby said he thought the milking rate might be slightly altered to ease the small man with 20 to 30 cows. They should reduce the 4d a unit suggested and add something to the 2d proposed for the big man, who, it was to be remembered, milked his herd much cheaper than the small man.
The chairman: You must not forget that the small man bumps up our peak load just as much as the big man. Mr. Ivilsby remarked that, possibly, there would be a deputation waiting on the Board at its next meeting to urge that the big man should pay as much as the small man. Mr. Barber: All the complaints that come to me are from the small man. The ; chairman: The endeavour > would be to adjust that. Mr. A. Ross considered it was such a big question that, he felt indisposed to make-any comment until ;the report had b'een brought down. These reductions depended-on the nature of the report. Mr. Seifert agreed that it was a matter requiring very careful consideration as the Board must be careful not to give service at a loss. The lightingman did not want to pay the industrial rate, and the industrial man did not want to pay the lighting. The Board -did not want to make money out of the small man, but at the same time it could not chose to deal with the subject from a sentimental stand point and say, "We will give this to these men." The speaker \ said he did not like the idea of meter rents, and his belief was that if lighting users paid 8d a unit, the Board should wipe out the meter rents in the future. As soon as they, were able to see the estimates for next year, they would have a better idea of what to do. The Board had done remarkably well, and both it and the staff were to be congratulated. Mr. Mackay said there had been good judgment shown all through, but the Board was now getting to a point where it could sec the results and the Board would be very foolish if it did anything without being sure of the position. The treasurer (Mr. Goldsmith) said those in the office could feel the pulse of the consumers better than perhaps the members of the Board or the engineer, and they found that there was a prejudice amongst farmers, who regarded the horse-power rate as a tax. When they came in to pay their accounts they said: "When is this tax going to be taken off—why should we pay that?" Undoubtedly, the unit rate was satisfactory to the farmers of this district, of that the speaker said he was quite certain, but whether the unit rate was quite the fairest way was a matter for debate. If some such rate were fixed after the manner he had suggested, itwould mean a concession on the present rate.
Mr. Matheson said that the figures showed that the Board's flat rate was little different from the unit charge. He thought it was a very dangerous thing for the Board to get away from the flat rate they had laid down. Thcy had no evidence that the change would satisfy consumers. / - - ' Mr. Goldsmith, in reading soine of the accounts included in the 70 under review, said that, the first four were those of small men who used their separators only/ The first, under the Board's plan of a horse-power charge and unit rate on top of that paid £1 Kg 2d, the second £1 5s lOd, the third £1 10s 3d, the fourth £1 13s 2d, as against £1 13s 4d that they would pay if charged on a unit rate alone, as under a neighbouring Board. The horsepower charge was more of a bogey, but if they could get rid of it so much the better. No Power Board had gone from a unit rate to a horse-power rate, but some had gone the other way. v The proposed charge was* in a measure to fight the farmers' prejudice. This being all the discussion the treasurer's report was adopted, and the following motion was passed:— "That a committee consisting of the Finance Committee, the secretary and engineer, be set up to consider and report at n'ext meeting re milking plant rates, also dairy factory rates, with a view to a revision. "That the engineers be requested to bring down a report with reference to the reduction of the outside staff."
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Shannon News, 27 April 1926, Page 2
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2,211The Horse Power Bogey. Shannon News, 27 April 1926, Page 2
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