SPRING CHICKEN.

Auckland Star, Volume LIX, Issue 269, 13 November 1928, Page 20

SPRING CHICKEN.

COME HOME TO ROOST.

INADEQUATE SINKING FUND.

LEGACY FOR POWER BOARD.

"This is a case of the first chicken coming home to roost," said Mr. W. J. Holdsworth, chairman of the Auckland Electric Power Board at yesterday's meeting in reporting that the first loans raised by the City Council in 1907 for providing power plant had reached maturity and the board had found it necessary to meet portion of the sinking fund out of reserves owing to inadequate provision having been made in this respect.

Mr. Holdsworth referred to two loans, one for £1000 raised at four per cent interest and the other of £24,000 at interest of four and a-half per cent. The accumulated sinking funds in the hand* of the public trustee for the redemption of these loans was £11,459, and the board had to meet the balance, £13,540. out of the power fund account. Tile board had not followed the procedure of other local bodies in raising a further loan to meet the deficiency in the sinking fund, but had met it out of reserves. That was one of the reasons why the reserves had been earmarked up to 1931. He expected there would be other and similar cases of inadequate sinking funds coming along, and the board would have to meet it. Ever since the board came into existence, however, it had provided sinking fund that would be adequate to wipe out the loans as they matured. "There will be more of this*'' he added.

Mr. M. J. Bennett: It is some finance! Mr. Holdsworth said a recurrence of the position in the future would be impossible because the Public Bodies' Loans Board insisted- on adequate sinking fund to meet loans on maturity. Mr. E. H. Potter: You provide a little more than the sinking fund. Mr. Holdsworth: That remains to be seen.