KAITAIA WATER SUPPLY

Northern Advocate, 31 October 1936, Page 6

KAITAIA WATER SUPPLY

LOAN OF £12,360 TO BE f RAISED

A special meeting of the Kaitaia Town Board was held yesterday to consider a letter from Messrs Francis and Company, financial brokers, of Wellington, in which they stated,the terms on which they were, prepared to act in an endeavour to raise a loan of £12,360 for the purpose of carrying out the proposed water supply: scheme for Kaitaia. Mr J. T. B. Taaffe presided, and other members present were: Messrs j. Thornton, D. Archibald and Lloyd Peace. It was proposed, the letter stated, to raise the loan on a table basis,’ for a period of ten • years, with a halfyearly charge of £359 10/11. This would mean twenty half-yearly debentures of £359 10/11 each, and a final debenture of £8752 13/9. , The last debenture would mean a renewal loan in ten years’ time. Their brokerage fee would be i per cent., the printing of the debentures would cost about £4, and solicitor’s expenses, exprcximately £3O. The instalments of £359 10/11 involved interest and a return of capital. The chairman said the payments would be about the same as would have to be made on a long-term loan. At the end of ten years they would have to raise a fresh loan, but considering the rate at which the town was growing, one did not need to be very optimistic <to expect that in ten years the population would be doubled, and, possibly, trebled. The growth during the last three years showed the rate at which the town was moving. At present, the town could meet the terms stated by Messrs Francis and Company, and at. the end of ten years the people would be in a much better position to carry the responsibility for the balance of the loan. More revenue would be coming in from the water, and there was no reason why the board should not set aside, out of revenue, something for a reserve fund. In this way .they could have a substantial sum in hand at the, end of ten years in further reduction of that part of the loan which would have to be renewed. He was in favour of the proposition put before them by Messrs Francis and.-Co. v Mr Peace said he agreed with* Mr Taaffe. The only ''alternative to the offer they were considering was an offer from someone financially interested in carrying out the,scheme, and the acceptance of which would interfere with competition. This kind of arrangement, Mr .Peace said, he did not like. The payments under Messrs Francis and Company’s offer were exactly the same as would have to be made if the*-loan was for 'a period of twenty-six years at 3£ per cent. There should be no difficulty* at the end of ten years, in raising the balance owing. Trie only question. was * whether they could not have raised the loan on their own initiative, without going to financial agents. ‘ Mr Thornton said he was prepared to support the scheme without further discussion. ’

On , the * motion of Mr; Peace, seconded by Mr Thornton, the offer of Messrs Francis and Co. was accepted.