POWER LOAN POLL

Sun (Auckland), Volume II, Issue 510, 13 November 1928, Page 18

POWER LOAN POLL

LEGACY FROM CITY COUNCIL “This is not tbe first chicken come home to roost,” said Mr. W. J. Holdsworth. chairman of the Auckland Elec-tric-Power Board, at yesterday’s meeting of the board, when he informed members that the first of the loans totalling £25,000, taken over from the City Council when the board was formed in 1922. fell due that day. The chairman further stated that although the board had been called upon to meet two separate loans, each raised in 1907 in connection with the City Council’s electricity undertakings, 1 both were liquidated together. One loan of £I.OOO had been raised by the council at 4 per cent., and the other loan of £24.000 at per cent; Each loan carried a sinking fund of h per cent. As the sinking fund had been inadequate, the board had been faced with considerable liability in meeting the payments. Whereas the sinking fund provided

by the City Council totalled only £11,459, the board had to meet the balance of £13.540, which had been duly paid that day. This sum had been paid out of the reserves, and that was one of the reasons why the board was earmarking reserve funds for special purposes until 1931. There would be further loans falling due, which the board had take!} over from the City Council, and which could not be met from the sinking fund on maturity. The board would have to make up the differences on these also. Since the inauguration of the board sinking funds sufficient to wipe out loans on maturity had been provided, and as far as the board’s own loans ■were concerned, there was no possibility of such a position arising as had been the case with the council loans.

Mr. Holdsworth concluded by saying that no local body could in future attempt a financial policy similar to that adopted by the City Council for electricity purposes. The Local Government Loans Board insisted upon adequate sinking funds being provided in order that all loans could be liquidated at maturity.