AN EXCELLENT YEAR.

Shannon News, 29 April 1927, Page 3

AN EXCELLENT YEAR.

Horowhenua Power Board. SURPLUS OF OVER £6OOO. ■ • ■(_ POSSIBILITY OP REDUCED CHARGES. A healthy condition of affairs was disclosed by the annual report presented to the Horowhenua. Electric Power Board by the secretary (Mr P. W. Goldsmitty) on Tuesday. This showed that there was . a nett profit for the tfear of £6055, and the sales of electricity totalled £33 889, the total income for the year being £37.581. Following upon the reading of the report, favourable comment was made by several members of the Board, and on the Chairman’s motion a committee was set: up to investigate the finan--1 cial position With;, a view to con>'Sidering whether it is» advisable to bring about at reductiph of charges to consumers arid to .establish a fund for renewals. The secretary reported as follows: — I am now able to .-present for y:ur consideration a provisional statement of accounts which will show the present position of the Board and the resuit of the operations of the Board as from the Ist April, • 1926, to 31st March. 1927. The accounts thus presented are provisional only in the sense that further details and information will bo available later. ■ ' The accounts reedy for your consideration are . the ./following:—Trading ad count, reven'u’e Account, nett revenue account, balance sheet for year ended 31st March, 1927. A perusal of these show that, the total — • • . o Income for the year is ...... £37,581 Total expenditure for year .. £31,520 Nett surplus for year ... i £6,053 The particulars :of the income ,as stated are made up under the following heads:— Electricity sales £33.889 Meter rents/ •• • 1,696 Penalties • • • 424 Supervision • • If® Sundries .. 32 Trading acc. gross profit Interest on. advances, etc. .. . ’ 83d Cottage'rents ...“17 £37,5,81 ELECTRICITY SALES. It will thus .be seen that the elec* tricitv sold amount to £33,889 13s 4d. The following table will show how this amount is made up .and also how it

cil, then they had no footpaths, lights : or many other conveniences that they ,• have to-day. When they took ovei i they had lots of pluck but no money * and the results to-day say a great deal ’ in favour of the administration. He advocated doing as much as possible to : beautify the town. Six or seven years ago the cemetery was a wilderness; today it compared favourably with others of a similar size. He recommended’ that a certain sum be placed op the estimates each year for this work. Therating to-day was solid, but it would probably be heavier and it behoved them to do their best to safeguard the interests of the ratepayers. If elected he would do his best, as Shannon is the town he looked to live in and believe in. He would'always try to further its interests and yet keep withm its means. CR. RICHARDS. Cr. Richards stated he was not pessimistic about the being satisfied that it had progressed during the past two years. He was in favour of the main highway through the borough, and footpath improvements. He advocated £IOO being placed 1 on the estimates for improvements at the Domain. He was opposed to an extensive sewerage scheme, but thought .pub?ie conveniences should be erected. If re-eleeted or not he would always try to further the interests of the Borough. In reply to a question he said he would be in favour of fencing off roads yriot used. Also that he would be in ‘favour of forming the road into the cemetery if it could be fi-aiiced. CR. HOOK. Cr. Hook said his policy would be a progressive one. He would like to see the rates spent all over the borough, not only in a portion. He supported the formation of a fire brigade, and favoured the Council’s scheme. The question, of swimming baths cannot be dealt with until it goes before the ratepayers. He said he would like to be a member of the Council next term as lie considered his interests as great as any ratepayer. CR. RICHARDSON. Cr. Richardson said hq would not make a lot of promises, but he would promise to keep down the rates. On the retiring Council he had been a ' member -if the Cemetery and Reserves 1 .Committee and later on tjie Roads Com--1 mittee. In conclusion he said the les3 promises he made the less he would : have to keep. 1 THE MAYOR. The Mayor (Mr. E. Butt) said Councillors had given a fair view of their work during the past twelve months. He said he was not going to promise a 16t of loans and rates. In deciding between himself and Mr. Murdoch, he o .would say that which ever was elected, a if they had a good team behind them, 1- they will do good work. The retiring i Council were a croditrto the borough, g A hearty vot# of thanks to the > chairman moved by . Mr. Murdoch, - bringing the meeting to a close.

compares with the last, two years’ rales’respectively: — I 1926-7 1925-6 1924-5 £ £ £ Lighting .... 12.192 “ t 77rT* Heating .... 3,746 11,260 “N 97 Power 14,548 11,864 L 33/ Waterheatcrs 2,173 “ Street lighting 1,228 1,150 o2» Totals . £33,889 £24.277 £4,357 (In 1925-26 and 1924-25 the lighting and heating receipts arc combined in the above table). METER RENTS. Income for the current yeah ... £1696 Income for the year ended 31/3/26 108 * Income for the Year ended 31/3/25 236 It will be seen that meter rents af ford a considerable source of revenue, and if the future policy of thej, Board is to abolish ■ them, it will be a very substantial concession to consumers. • ’TRADING ACCOUNT. The purchases and charges for the vea'r amounted to £1975 19s 9d and the sales t0.'£2931 7s7d. The stock in hand on the Ist instant amounted to £540 15s 9d as against £B4B 6s 6d a-t the same iieriod last year. The gross profit for the vear carried to revenue account is £647’17s Id. It must not be overlooked that this is gross profit only. OTHER SOURCES OF REVENUE. It will be further seen that the interest on advances, cottage rents, penalties, supervision fees, etc., have produced in round figures £1347. EXPENDITURE. As already. shown, of the total expenditure of £31525 13s lid, £14,019 1-s has been paid for electricity. The following appear under the different ings:Distribution & operating charges .£3634 Management and general • . oßl ° Audit," rates, commission and sundries Meter reading Street lighting, renewals, etc £8,276 Interest and sinking fund .... 9,22$ ' £17,506 Electricity 14 > 019 £31,525 - NOTHING YET WRITTEN OFF.

An estimated sum of £2OO has been placed on the balance sheet to provide for bad or doubtful debts. The position at present is' that in the Board s operations nothing has so far been written off. There have been however some losses, and, whilst the amount named is perhaps a liberal provision, it is well to provide against contingencies of this nature. Them the peculiar''position of the Board until regard to its consumers, losses should be very small indeed, hut it is doubtful if ■a business, of any magnitude can be carried on. without some losses, even it thev are comparatively very small- in proportion to the'size of the undcrtSlkll,pLOAN EXPENDITURE. The expenditure was larger than was anticipated at the beginning of the vear, owing in some respects to -new vork being undertaken and the buiblin’n- of-another house. It now appears that the loan money has all 11,0 total loans raised being £lbO,Uim. At the close of the • year there were stmks of material on hand (chiefly xvire poles and transformers) to the value of £SOOO, but otherwise there is no money left. It. will be remembered that tuo years’ sinking fund on the A.M.r. Soem , 'v’s loan and a portion of the sinking fund of the Government Luo loan of" £20.000 ha:, been paul cat oi in ' ai .,_th c total being in round, fguro.s (17.10 A repayment of principal has also been paid ‘out of loan in respect to ilit' oilier Government Life loans itmounting to £6.38.' Together _ these payments come to £2374. It is n compulsory to refund this amount, bm undoubtedly this sum should be refunded out of revenue if the Board deenithat the financial position warrants it . I .it' wilt assist the loan to that extern ' a nd would be quite the right tiling UI ( [o if the Board is convinced that the -ini'’ is opportune for the transact ion. UuXDBY CREDITORS AND SUNDRi • DEBTORS. The amount's owing to sundry credo ■ n ,.~ at the 31st March 3027 are show:. «t 1 £4461 3s 7d. as against £3870 0s lOd Under sundry debtors, the total under this head comes to £10,614 5s 5d o which over £6OOO is owing for eU-etr:*. - ity. The 31st March is the end of ;■ quarterly period, and the quarterly a< count.s both large and small are then due and outstanding, hence this it on will always. appear as a large amonn: (Oi every ’ yearly balance sheet. Sun dry debtors in last year’s accounts stood at £22, 647 Ss 3d. ISiiTT REVENUE ACCOUNT. It will be seen that the balance brought forward fiom last year, £SIOS 12s 9d, added to the surplus for tlu-m-eseut vear of £6055 16s 7cl, makes a total of £ll, 104 Os 4<l, to be carried to Ihe balance sheet unless .it. is decideu out of the surplus of the year fl)_to establish a renewal or depreciation, fund, and-(2) to repay to Loan tne bin king fund and the principal as hereinbefore mentioned. . The latter proposition would reduce the.surplus for the year to £3681 18s 7d. If it. is further decided either to_ establish a renewal fiind or write "off an amount for depreciation in either ea-e to the extent of £2000,. the surplus left of £J6SI 18s 7d, plus last year’s balance of £5048 12s 9d, makes a total of £6720 Us 4d. to carry forward for the year The Board also has an interest reserve of £BOOO which is available when wanted. RENEWAL FUND.

It doubtless is essential at this stage of the Board’s history to either write oi'f mi amount for depreciation or to establish a renewal fund. The lat.er commends itself to me as. being the more desirable way of meeting the situation. A very large reserve is not necessary, seeing that the sinking fund or instalments provide for the repayment of loans, and the lines and works have to be kept up to date and emc:

ient from maintenance charges. Still a certain reserve is essential, and if the Board decides on the policy of establishing such a fund £2OOO would mean a little over l per cent, on the capital outlav. The money so set apart could at present he left in the 'business, but when the money for installations comes in, the fund should be invested with the Public Trustee or dealt with in such other way as the Board may determine subject to the consent of the Apdit Department . CONCLUSION. In the revision of rates which the Board will undoubtedly make it, must lie remembered that the ~ year upon which we have now entered will be a testing .year, as the whole of the interest and ‘sinking fund must be paid out Of the revenue, in round figures amounting to £12,000. There are other charges also which will naturally increase with the close of loan expenditure, and whatever reductions are made should receive careful consideration. The Board is in the fortunate position, firstly of not being under the necessity of striking a general rate, and secondly, in dealing with its customers, whenever charges of rates are made, they can be reduced and not increased. Seductions however, even if small, must be based on fairness and equity —as between the Board’s various classes oi consumers.

The year has* passed without any very serious happenings, and the large majority of our consumers seems satis : fied with the service given. There is always room for improvement in methods and bitter ways of administration and work, and I think I may confidently assert that the officials oof the Board are constantly on the look-out for more efficient, economical and better methods, both in service to the Board and in the service rendered to the public. In many respects. Power Board undertakings are travelling:, new roads, and the best and more suitable tracks can only be found out. after experience.

DISCUSSION OF THE REPORT.

' THE BOARD’S TEST YEAR

lhc Chairman congratulated Mr. Goldsmith on his report, and complimented the Board on the success of the undertaking. There were two mattes in w hieh he felt particularly interested —the question of a possible reduction in the rate charged to consumers and the establishment of a renewal .fund Whether there should be abolition or partial abolition of meter jents he wanot prepared to say. This was-.really the Board’s test year. The times were not too good, and any reduction they could give, to the public would be appreciated: but they must be careful not to do any injury to, the Board financially. It was always easy to reduce charges, but once tlmt was done it ivould be Very very hard to reinstate •hem. The sales mf electricity had exceeded the estimate; but the Board had had a large loan expenditure in .reticulation. More lines had been built than rhey had thought they would have to build in the 12 months. That was responsible for more expenditure and increased revenue. Ho thought they had built lines which in each case had bee.nj p'avablo. They had to consider tlm question of lines in thinly populated districts where they might, not pay fm a year or two, or where they might never pay the amount of interest the Board was at present earning. In considering a reduction of charges, they should take that point into considcra- ‘ tion. He would suggest that a spccia committee be set -up to report, to tin next meeting of the Board. They conn: go into the whole financial position am' report to the Board on the advisabi: jtv of a reduction of the charges an i rlie establishment of a renewal fund. He moved that Messrs A. Seifert, W 11. Gu lining, T. G. Vincent, .and him '-elf be a committee for tliis purpose. Mr..O' W. Mat-heson seconded tin motion. He said- that the report wm a most pleasing one, and all eoneenu-i. deserved congratulation. The Chair man’s' recommendation appealed strong lv to him, and he hoped that, when ; rare fill analysis w‘a* made, a reduetiw in the charges would lie found possi ule. He thought it should be pc si d

to make a -reduction in the charge fm ilK .;ors. The Board had an increase '> something like 35 per cent, in income •ind the increase in expenditure >1 not appear to be anything like thiThev were going to have an increas ul ! revenue, and that indicated that i would be possible to make a reduction At no time would a reduction be mo:acceptable than, at the present, takin he position of the country from a fin micial point of view. The qo.estiw was one calling for care, however, r hey were starting a reserve for re iewal , and more up-to-date appliiiue.es At the same time, any reduction tlm vould be made should be made. i. was glad that ihe Board had oxpt - : euced such success and had such sue ■ess and had such good service fron ;lie staff.

Air. A. Seifert congratulated tin -raff and the Board on having had sue a successful year. He thought the pro (it indieated* that the Board would liable to make a reduction in cases when, it. appeared that they should do so, pro vided that the finances of the Boar-: would permit this. Although then was a profit of over £OOOO this year, ihev could hardly anticipate the savm

result next year. He thought, however that a reduction in charges could l>c made without doing any injury. Re ferring to the future, Mr. Seiferi pointed out that- the life of the pole:was from 25 to 30 years, and by tha; time tlie renewals would be extremely heavy. The Board was now having the best time that it would have fo;

a vear or two, because everything was now. They had a sinking fund tv wipe out; their loans in 36£ years. It they went a little further and made provision for 20 to 25 years to wipe out the loans, they would be working on a very satisfactory and sound footing The trading account showed a gross profit of £647 and farmers might think that the Board was making too much; but this did not take into account transportation and interest on money. Mr. Seifert called attention to the clause, -showing t,hat there was over £19,000 outstanding from sundry debtors, of which £6OOO was owing for elec-' tricity. . . „ The Secretary: That is mostly tor installations. , , Mr, Seifert congratulated the Board

on its very successful year. He had taken down figures showing that the .4. Board, although it only originally contracted to take £5200 worth of electricity from the Public Works Department; actually bought over £14,000 worth ; during the past year. This showed how the business had grown upon what tae ,j Board thought it was necessary to contract for. ' , - , . v 4 Mr. T. G. Vincent said he was picas- i od that the Board had had such a satisfactory year, and he was very grateful for the foundation that was so solidly laid by the original members of the Board. He did not think . they could do anything in regard to the new proposals Without a meeting of the , Board. , , The Chairman said that what he-par-ticularly had ir. mind was a reduction >; in the commercial lighting charges, p i The Board would have to consider en- -■» couraging the greater use of electricity as far as the lighting of shops waa \ concerned. He added, that a considerably increased load would come on their j present mains, and the Board still had to consider seriously that any one ox k the industries that was taking a large a amount of current might get a set-back; ■ so the Board had to make some provia- ■ iou in that direction. The figures .1 quoted by Mr. Seifert went to show | how rapid the growth had been cn the Mangahao system. Except in the •. Hut-t Valley, it had not been more rapid in any other board’s area. He felt | very pleased with the result, but he .■ r. realised that it could not have been" ob- . tained if they had riot had a very good staff find the*hearty support of the pio- .j plo who were paying for the service. ’ j The Chairman’s motion was carried, and the report was adopted. - j ' During the past month 32 applications for electric current were received by ’ ! the Horowhenua • Power -Board from new consumers, and 27 applications ) were received for extensions. These include 8 ranges, 9 water-heaters, 3 industrial motors, 4 milking motors, and •3 pumping motors. Thirty-eight new consumers and 24 extensions have been connected, which include 9 ranges, 0 waterheaters, 5 industrial motors (total 50k h.p.), 2. milking motors, and *i pumping motors (total 17$ h.p.) .