POWER BOARD AFFAIRS.

Timaru Herald, Volume CXXV, Issue 18615, 10 July 1930, Page 6

POWER BOARD AFFAIRS.

WAIMATE CRITICISM. NO SUPPORT FROM GERALDINE. At a meeting of the Geraldine County Council on Monday, and of the Geraldine Borough Council, that evening, letters were received from the Waimate Borough Council, asking the support of the Geraldine Councils in a request made to the South Canterbury Power Board, that an independant qualified accountant be employed to inspect the accounts of the Board, and prepare a balance sheet of the revenue and capital accounts of each district, allocating to each its due proportion of general capital expenditure and proportion of overhead expenses, based upon the percentage to capital raised. The letter, which claimed that Waimate was not receiving justice at the hands of the Board, was on the lines of a statement recently published. Power Board Case. The chairman of the South Canterbury Power Board (Mi* J. Kennedy) wrote as follows: — “I understand that you have received a somewhat extraordinary memorandum, issued by the Waimate Borough Council, in which the South Canterbury Electric Power Board is arraigned on account of many alleged acts of commission and omission. Maybe my beat course would have been to entirely ignore the effusion, relying upon the good sense of those to whom it has been addressed to assess its value, and to consign it to the wastepaper basket as being a mere flight of imagination, rather than elucidation of facts. However, on this occasion I think I should draw attention to a few of the facts which it contains, and ask those who peruse the precious document by what right the Waimate Borough Council comes into the picture. I maintain it has no standing in the matter as a Council. The members of the Council, as private individuals, and as ratepayers, have, of course, the right to make any representation to the Board which they desire, but I piaintain that as a Council, elected for entirely different purposes, it has no standing, whilst the demands made indicate most clearly that members take themselves far too seriously, and are endeavouring to usurp dictatorial functions to which they are not entitled to aspire. As far as the Board is concerned, I can say this at the outset —that from its inception it has consistently maintained the policy set out at the beginning. There has been no deviation in the smallest degree; the accounts have again and again received the endorsement of the Government officials; no statement presented has ever been questioned; the policy laid down has been followed in every particular, and I think that I can claim further that the work of the Board has met with the cordial endorsement of the ratepayers; otherwise it is impossible to believe that there has been no change in the personnel of the Board through the years. Although the Waimate Borough Council arrogantly claims to speak for that part of the district, what of the three members who represent the district on the Board. They are in entire agreement with the other members of the Board. Does the Waimate Borough Council claim that it is better entitled to speak the voice of the district than are the freely elected members who represent Waimate on the Board?

“But let a few facts speak for themselves: The Waimate Borough area is part of the combined district of 'Waimate County and Borough, and is represented on the Board by three members, namely, Messrs Fitch, Hayman and Mills, and therefore Waimate Borough Council does not represent the ratepayers in connection with electrical distribution, and the Council as a Council, has no vote at the election, although, of course, each Councillor has; they are in just the same position as other voters. The Waimate members of the Board have always been in perfect accord with the other members of the Board.

“The Board’s accounts are kept in strict conformity with the requirements of the Auditor-General, who, up to the present, has taken no exception to the methods of allocation. The allocation of (a) administration, (b) meter reading, (c) maintenance, is as follows:—(a) in accordance with the revenue in each area, (b) and (o in accordance with time-sheets. The greater the revenue, the greater the cost of these three items. If applied in accordance -with the capital expenditure, one district would be gaining at the expense of the other. The Councillors of Waimate Borough appear to think that they have £1416 above their quota invested in the Board's common burdens, but by taking the matter back to 1925, it will be found that in the years prior to 1930, they were considerably below quota. “The figures given by the Waimate Borough Council in respect of the Timaru property £5193, and the common burden of £643; are quite correct. This, however, should be placed alongside the total burdens over a period ‘of five years. The figures, however, given in respect of the £SOOO and £12,175,. are hopelessly incorrect, being pure manipulation to bolster up a bad case, land and stock, etc., not having been considered. If the Waimate Borough area quota in the Timaru property were reduced from £5193 to £2OOO of the £3193 returned, only £1416 would be available for distribution purposes, and the statement that other districts are being loaded with £215 as interest on £3193 is hopelessly incorrect. “The facts given to the Waimate Borough Council were purely an internal analysis of the expenditure from revenue in each area. This is not required by law, but is kept in view in case any particular area is not sufficiently financial to meet its commitments when depreciation becomes due, and so that no area then making a profit will be penalised. The further figures given were never supplied by me or the engineer-secretary, and are therefore an attempt on the part of the Waimate Borough Council to sift out our balance sheet and put up misleading figures to your Council. “Even though the overhead expense of the Board (one of the lowest in New Zealand) in respect of administration, meter reading, maintenance and depreciation are approximately £5/5/2 per cent, on the capital expenditure, the said expenses cannot be allocated in accordance with Waimate Borough Council’s idea, but are allocated under (a), (b) and (c) depreciation, of course, being a direct charge. “The Waimate Borough Council appears to think that it has been penalised by £1 per cent, on the year’s working, but the fact is that our balance sheet is taken as a whole, and there is no such thing as legitimate profits by any particular area. a fair allocation has been given for internal analysis, taking the matter over a period of five years.

“The Waimate Borough area has not had its full quota invested in the Board’s permanent burdens over a period of five years. The Council state that the money so invested is £30,439 including the Fairlie township electrical undertaking, it should be quite clear to the Waimate Borough Council that the Fairlie electrical dis-

tribution is a work in the Mackenzie County, exactly the same as the distribution in the Borough of Waimate. The amount therefore in round figures comes to £21,518, which is equal to £7/1/9 per cent, on the total capital expended, and not £lO/5/10 as stated. “We must, however, add to the amount of £21.518 the sum of £6959, representing movable stock, making a grand total of £28,477. Of this amount the Waimate Borough area has for the time being an investment of £7112, instead of £5696, being £1416 over quota. This only represents last year’s figures, but if taken over a period of five years, it will be seen that the present allocation is not by any means unfair. “Waimate Borough area investments in permanent burdens over five years: 1925 Under quota £2842 1926 Under quota 2293 1927 Under quota 220 Total Under quota £5355 1928 Over quota £412 1929 Over quota 725 1930 Over quota 1416 Total Over quota £2553 “For the period under review, if we get down to watertight compartments, Waimate Borough area would have to find another £414 interest and depreciation. “The Board are further accused of plundering £325 from the Waimate Borough area profits. This matter has also been carefully looked into over a period of live years, and it is found that Waimate Borough area has short paid in respect of: —Cost of current from Government, administration, maintenance and meter reading, an amount of £l2Bl. This, added to the £414 in the previous paragraph, shows that the total amount underpaid is no less than £1695.

“The above figures are from the actual analysis of the expenditure from revenue in each area. The Board, however, has taken everything into consideration with regard to line rentals and many other matters which necessarily must overlap in many ways. An internal analysis of the expenditure from revenue in each area is kept to give an indication of the earning power of each district. This, however, does not appear in the Board’s regular accounts, as the revenue and expenditure from same is taken over the district as a whole.

“As long as the South Canterbury Electric Power Board district as a whole shows satisfactory results, the strong should help the weak. It would be inconsistent with the policy which has been consistently honoured by the Board, that the districts should be hived off into watertight compartments. The Board feels that such a policy would be disastrous, since it would seriously militate against the success and progress of the great area lying between the Rangitata and Waitaki rivers, which must ever be regarded and treated as a whole. If, however, it comes to the question of a rate to make up a loss, the internal analysis will be referred to, and no district making a profit will be called upon to contribute to the liquidation of such a loss. I would ask your Council to consider the matter from all angles, and would be pleased to have their endorsement of the Board’s policy, which has been in operation since its inception.” Members of the Geraldine County Council expressed the opinion that the Waimate complaint was no concern of theirs, and they doubted if they had any right to interfere. It was decided to receive the letter. Confidence in Representatives.

When the matter came before the Borough Council, the letters were received.

Councillor Miller: “I hardly think it is necessary to discuss the matter. We should express full confidence in our representatives. If Waimate are dissatisfied, it is up to them to get someone else.”

On the motion of Councillors Miller and Bell, it was unanimously decided to express confidence in Geraldine representatives, and the Government Auditor.” WAIMATE’S REJOINDER

CHAIRMAN’S FIGURE 3 UNRELIABLE. At this week’s meeting of the Waimate Borough Council the Finance Committee’s report stated that at the monthly meeting of the South Canterbury Power Board, the request of this Council that balance sheets be made up showing the position of the accounts of each area, with the correct amount of profit and loss fairly made by each area, was acceded to. The accounts will not, however, be made up, as we desired, by an independent auditor, but are to be compiled by the Boards own office staff. “ We are glad,” continued the report, “ that the Board has admitted the desirability of having such accounts made up. It has repudiated tacitly the attitude of the chairman that this Council had no standing in the matter; and has agreed to have compiled the necessary statements to show where each area stands in regard to capital investments and revenue accounts. We suggest that this Council tender its thanks to the representatives of the combined districts of Waimate County and Borough, Messrs Fitch, Hayman and Mills, for their support of the request of this Council. We would have preferred that an outside auditor had been empl6yed for the purpose, as our confidence in the figures presented so far by the chairman and secretary-engineer has been much shaken by their contradictory nature. After this Council sent its letter to the local bodies of South Canterbury, Mr Kennedy sent the local bodies a retort, and to-day in his chairman’s statement to the Board further dealt with the criticisms of this Council, but adroitly avoided the sections most damaging to his case. We would prefer to pass over the silly charges of Mr Kennedy concerning alleged lack of courtesy on our part, but since he so determinedly stresses this aspect, w’e would remind him that we have handed nothing to the Press that has not been posted to the Board’s office. We have not received from Mr Kennedy any copies of the interviews given by him to the Press. We must give him point blank contradiction when he charges our Mayor with launching an attack against the Board through the Press. Once again we repeat that this Council is the only source of action in this campaign to secure justice for the Waimate Borough special area. We would commend Mr Kennedy to be less childish, and to deal more with the figures and facts, and less employ his time in setting up imaginary troubles against which to fulminate.

“It is useless for Mr Kennedy to refer to any figures given by us as hope lessly incorrect, as our figures are based on the balance sheet supplied from the Power Board office. Mi' Kennedy’s figures attempt to show that the Waimate Borough special area has underpaid its share by no less than £1695. Mr Morrison’s letters state that he is also charging to other districts current supplied to Waimate Borough special area, making a possible total robbed from other districts of between £2OOO and £3OOO. In reality his further

contribution only gave figures which place deeper in the mire the allocation described. “ In referring to our comment on his reference to £12,175 being a sum in which other districts are paying sinking fund, Mr Kennedy says the figures are ‘-pure manipulations to bolster up a bad case.’ Mr Kennedy should be an authority in this, as the £12,175 was his own figures. In our endeavour to be even a little more than fair to Mr Kennedy, we included the purchase money for the Fairlie electrical installation in the overhead expenses. Mr Kennedy points out that this is a charge solely on Mackenzie, but does not observe that if so it places the wrong treatment of Waimate in a stronger light. Take out Fairlie, and Waimate should carry a due proportion of £2590, but we carry £7012, or £4422 more than our share, or £IOBO more than we said whjien we generously included the Fairlie purchase and as we pay £6 15s per cent, on this sum or £3OB more yearly than we should in interest and sinking fund. Mr Kennedy asserts that administration is charged on revenue. This is not borne out by the balance sheet for 1930. The total revenue is £51,189, and the administration £3455, which is approx. 62 per cent. Waimate should pay in this namely £4BO, but is charged £694. Mr Kennedy must try again. We have had no opportunity of investigating Mr Kennedy’s statements concerning our position over five years, but if his figures here are no more reliable than those he has so far given they have no value.” The report was adopted.