ANSWERS SUPPLIED

Hawera Star, Volume XLIX, 17 August 1929, Page 6

ANSWERS SUPPLIED

RATEPAYERS’ ASSOCIATION’S QUESTIONS. POWER BOARD’S INTENTIONS. MR MURDOCH REPLIES AT AUROA.

Questions, put to the South Taranaki Power Board by the Hawera Ratepayers’ Association were dealt with by Mr J. B. Murdoch, chairman of the tioard, in ills address at Auroa, last night. Altogether, 16 questions were asked, and these were replied to categorically, the questions and answers being as follow:

(]) ON WHAT BASIS AND RELEVANT RESTRICTIONS, HAS THE PROPOSED BOARD’S RR\ EM E BEEN ARRI VED AT ?

Answer: The board’s estimates of revenue have been based on: (a) The company’s income as disclosed in its balance-sheets. Though this business | will unquestionably increase, present day figures for revenue have been adapted. Tile [present, business is a rapidly glowing one, as is evidenced by tho increased sale of current disclosed in the balance-sheets, and by! the increasing profits. The present business will increase very materially in tho future and will show increasing sales of current. In the board’s estimates (which are conservative) nothing is allowed lor the increased revenue from the increased business to he secured in the future, (lb) A;s to the estimates re areas at present not reticulated at all, the estimates are based on the experience of our consulting engineer, 'whose estimatesi lbr. other boards have been amply justified by experience. He went thoroughly over the areals in question some time ago>. His work for other boards have proved conservative. The real point is that in the process of electrical load development, adequate sendee must be given to the public, and the board is out to give the public that, service.

(2) WILL THE BOARD PUBLISH ITS LAST TWO YEARS' BALANCE SHEETS : J

Answer: The board is ready and willing to make any of -its figures public. The following puts the matter in a nutshell : (a) The board’s expenses of formation and preliminary matters wez-e £2,261 Ills; (b) then came the Arbitration —we have paid £1,323 17s Sd, and we have still to pay accounts incurred which are still outstanding, £6,331 10s sd. The total cost of the Arbitration was accordingly £7,655 17s Id, and including the preliminary expenses, the total expense to date is £9,917<s 8s Id. Some time ago the board collected a rate of one-eighth of a penny, which yielded £3,223 6s 9d.

(3) HAS THE BOARD BEEN APPROACHED BY ANY DISTRICT OR. GROUPS OF RESIDENTS ASKING TO BE ALLOTTED TO LINK UP WITH: OUTSIDE SUPPLY AUTHORITIES!' IE SO, WHAT HAS BEEN THE RESULT ? Answer : (a) The board was approached by part of the outer area (which is nob affected by the present loan proposal) and with, the consent of the board and approval of the Government Mm land between the Waitotara and WJiemiakura, Rivers was added to the Wanganui - Rangitikei Board’s area, (b) Another portion of the outer area desired to follow suit, hut the Government was unwilling to further curtail tho outer area, and also thought the Wanganui-Rangitikei area was large enough without more being added. The hoard itself was not inclined to see its outer area further diminished, (e) At various times the board received requests from the Taranaki Power Board for permission to link up a schoolhouse and several residences. These appeared to be desirable and were granted (1926-1927-1928). (d) More recently one application was declined an the ground that the board would soon be in business, (e) In 1925 there were negotiations between the Kaponga and Opunake supply authorities and this board, but nothing came, of them. The board’s policy is to preserve its district intact as allotted by the Government to secure the important advantages of : (a) Load diversity; (h) lower average cost of electricity; (c) lower average cost of administration.

(I) SINCE' THE BOARD CAM 10 INTO OPERATION HAS IT VETOED OR LIMITED THE COMPANY IN EEOARiD TO ANY PROPOSED RETICULATION r Answer: J. liars personalis l arrangell I for various companies and individuals I to bo served by tile company, and this |is well-known. The company has not oil, any occasion brought the board any specific proposal to reticulate any street or load. Prior to the arbitration, there was correspondence between board and company as to certain matters not dealt with in the Statute and requiring adjustment on settlement. The company sought a free hand to make such capital expenditure as it thought fit, for which the board would have to pay. The board, as the prospective purchaser, had, of course, a direct interest in the style of work to ho done and whether it would be profitable or not, and accordingly invited flic company in any case where it propciscd to extend its reticulation to submit particulars to show the cost of erection, details of design and prospective revenue to be earned, so that the hoard would be in a position to decide whether or not it would he desirable to do the work. (o> WHAT PARTS OF THE BOARD'S area not reticulated has THIS BOARD DECIDED TO RETICULATE out of loan MONEYSf Answer: The main area to lie considered is the unreticulated portion of the V aim ate West. There is a small portion of Hawera County also. The board’s policy is to reticulate and to .establish efficient and economical electrical service wherever same will prove sell-supporting. Where an assured and profitable load can be secured the board will put, in the line. In the Joan proposal ,sufficient money is provided j which will be uplifted when required. The hoard is not raising all the loan money at the -start, thus saving interest as far as possible. (d) IE THE £200,OOf) (£187.000) LOAN BE RAISED MAY THIS BOARD raise further moneys:Answer: The loan is. for £1.87.G00. The board would have power to raise only an additional £5,000 (approximately) being 10 per cent, on that part of the loan other than the cost of the company s undertaking and expenses. This could be raised only after the whole £187,500 had been raised, and it is moist unlikely that it would be required. The exact amount would require to be settled with the auditorgeneral. No other loan moneys can be raised without a- statutory proposal being submitted t.o thei Loans Board and] a' poll q>f the ratepayers

rHE board ex plain ‘HE EFFECT AND INCIDENCE C* ITS RATING POWERS? and (8) DRAWN SwfwW™ holdings OWNER B 1 ONE OWNER AND MnW EEK PROPERTIES RR QLIRING ELECTRICITY AND other;wdse? aiv,j Aiworsi : No rate of any kind wiiil ovor be collected ‘by the board it the Joan is carried. The rate mentioned in the proposal (SSS/1000th.s of a penny) js :simply -pledged a-s the statutory for iiie .loa.n. Every power board has power to levy a general rate .and an availability rate. The. general rate may lie struck over the whole area, but here no rate will ever lie collected. Tile object of the. availability rate is to force people to take current, and it is used Where a board has to create a m.n ket for its electricity. This doe.s not- apply in South Taranaki, because the people are taking the current—£26,ooo worth—and because the market is created. This bogey was exploded by Mr Rone.. In no case will the South laranaki Hoard force anyone to rake current—that is the settled; policy of the boards in any case (9) AS BETWEEN BOARD AND company, which will still S I AND DEPRECIATION OF COMASSETS SINCE SEPTEMBER LAST, AND W r HO WILL GET THE PROFITS SINCE SEPTEMJJiIiiu.:' Answer: The company, of course gets its profits, till it goes out of business. It would; be most unfair to the comp any if it were otherwise. While they run the ‘business they should get the profits As to depreciation, on settlement the company is to allow the board, an. agreed sum'for depreciation ot its- assets. CO) DOES THE BOARD PROPOSE TO CHANGE VOLTAGE; OF THE PRESENT SYSTEM? IE SO ™-VT WILL BE THE RESULT IN COST TO (a) BOARD- <k) OCCUPIERS? ' * (J Answer: The board’s settled policy to give to the people of its district an efficient and adequate electrical service. As the load increases and requires it, the present- high tension system will be gradually changed to a standard 11,000 volt system. This is ■u hat the ‘board proposes to atm at, bat! the completion period is indefinite. Thei estimated cost to the board of doin this in they future is £6OOO and is' allow ed lor ju the- estimates under the Rem of “cost of alterations," etc. No expense will bo incurred by occupiers. This policy is a progressive one. and "ill result in improvement of the svs--•eiu generally. (H) MR BONE SAYS THAT OFFER OF £67,000 WAS MADE; AFTER CAREFUL CONSIDERATION BY ENGINEER, MR PACEY HAS SAID THAT IT WAS MADE TO BRING ABOUT A BREACH IN NEGOTIATIONS AND' WAS NOT \ RDOT OFFEIE WHO ls COR-

Answer : The board’s offer was £67,000. plus the value of stock and tools, thus : £67,ooo, plus stock and tools, £5,625, of £72,825. This covered only physical assets and nothing was included for goodwill. Remember: (a) Tlie board had then no access: to tho company’s records; (b) the board knew of certain 'liabilities (later tlie company in their second offer asked an indemnity in respect of these). At the hearing, the board contended £85,903 should bo the price for the iilivisioal assets, RUT THIS FIG UR El INCLUDED ASSETS 'UNKNOWN TO THE BOARD WHEN THE OFFER. WAS HADE— and the £85,90S was after full investigation. Both the gentlemen referred to were right—the offer was made after careful consideration—-and the object in the event of non-a.coe.pt-aiu'(> was to create a breach to make the arbitration possible, and get ahead with the business.

12) IS IT LAWFUL FOR THE HOARD TO LICENSE THE COMPANY TO DISTRIBUTE ENERGY ? IF SO, HAS BOARD EVER. CONSIDERED DOING SO? Answer: It would not be lawful for the .board to license, the company, as already explained in the Press. Even if it were lawful, it would be bad policy from the people’s point of view, as the goodwill of an increasing business grows each year. It is now or never; if the company is not bought out now, it never will lie. Yes, the board considered the matter and was advised by its solicitors The board’s policy of buying out the company and oi functioning in the interests of the people has been very well known lor some years. Recently there was] an election of six of our board members, and every one was returned unopposed. The statutory advertisements of the fact that the board was going to place its proposals before the Loans Board called for objections to be sent in. Not a single objection was received. The board’s policy is and lias been to function for the people and to give service. The people are with us, as the uncoil tested election and absence of objections and general public opinion unquestionably shows. (13) IF THE POLL BE TURNED DOWN. MAY THE COMPANY APPLY' FOR A LICENSE TO RETICULATE AND S UPPLY WAT-1 MATE WEST? Answer: The poll will not be turned down. Tt will be carried by a substantial majority. The company could apply for a license all right, but it- would not get it. The board will look after the interests of Waimate West. (14) CAN THE BOARD GIVE A GUARANTEE THAT NONE OF THE COMPANY’S CHARGES WILL BE INCREASED? Answer: Of course the board can give no assurance of what the company will do in the future. The company has spent more than the Ivoai-d in the arbitration : T hear over £IO,OOO (i. 0.. more than the whole expenses of the board since its formation in 1026. Our oxnonscs of the arbitration amounted to only £7665). The company is authorised Ivy statute to charge up to Is a unit. Will thev want to get their £IO,OOO bach from

the people? if the poll is not carried, it is qinte possible that the company verl Ji lC, ' e?Se c , harges - TJle board 1 will 1 educe nnces from time to time This rs an absohite fact. First, the board u H not increase any of the present di,ce^ S r SgP ° + Ik1 ' tlle board will reto time S<?S to from time (I Vm'TtSnrn B ™^ ,D SETTLED WTNr\m\F5K -F WIEE MARE A EOT? 1 PER MONTH DOES it PROI’ER rronsir^i ? rLAT BATE Answer: The board’s policy will be actnitr* for 7 f* amount of electricity 3S""’ zf'iVsr r u ™ * Sf Pm?nf?TT W RUNNING WILL NOT EXCEED THOSE OF THE COMPANY? Answer : While the hoard is simply running the same business as the compam the board \s expenses of running the business will not exceed those of the company. As the business increases. and as the reticulation is extended on the lines already indicateil. t!ie hoard may haye to employ a Further meter reader or an additional * - v . r4<3r - C or so- Whatever increase or start is rendered necessary to give efficient attention to the ' groans business will certainly be arranged FIN A NCIAL STATEMENT.

v "o '!? eourso of answering question 7 - lr Murdoch presented details of Hie hoard’s receipts and expenditure t”!' n the tEr ee years ended on March 31, 19-29, as follow: 1027 (includes all expenses prior to and since constitution of board viz.. April 00, 1925). —Expenditure: Legal expenses £3BO 3s lid, Hawera borough (preliminary expenditure) £3O 2s 7d. secretary £l6l 13 s 4d, engineer (salary) £124 12s, engineer (travelling expenses, etc.) £59 16s 4d, engineer (salaries of assistants) £lO3 ss, engineer (travelling expenses of assistants) £-6 16s 2d, members’ travelling expenses £62 Os 3d, members’ remuneration £39 15s, chairman’s allowance - £lO5, car hire and benzine for engineer and assistant £36 7s 3d, printing advertising and stationery £6 16 s . 6d. association -subscription £6 6s, bank interest. and 'charges £4S 3« 6d, sundries Nd' ( ’s <id: totai £H9S Ss 4d - Receipts:^"'

1928.—Expenditure: Legal expenses £IS3 16 s 4d, secretary £IOS 6s Sd, engineer (salary) £-50, engineer (travell:ug expenses) £67 14s 7d, members' tra\oiling expenses (three to Wellington) £4S. .members remuneration £37 10s, chairman’s allowance £lO5, association subscription £6 G iS Gd, bank interest, and charges £74 2s Gd, sundries £7 4s, balance .brought forward from prior year £ll9B 8s 4d; total £IBB6 8s lid. Receipts: Rates collected bv loeal bodies £2424 llg 2d, less icharges £l2l 4 S sd; total £2303 6s 9d. Balance £416 17s lOd.

1929. Legal £ISI 10. s IQd, engineer salary, on (account)' £SS Is 4d, engineer (travelling expenses) £lO9 ISs Bd, .accountant (fee) £l9 ss, accountant (travelling expenses) £23 6s Sd, members’ travelling expenses £lO 18s, members remuneration £l3 10s, (travelling expenses (engineers, etc-.) £36 3s 4d, wages £267 15s lOd, ear hire £34 ISs 4d, accident insurance £l2 Os Od. sundries £7; total £BOI 8s Od. Receipts: Balance brought fonward from prior year £416 17s 10. rates collected 'by local bodies £76 7 4s 9d. less charges £39 6s lid; total £1144 15s Sd. Balance £343 7s 2d.