“WAKE UP”

Timaru Herald, Volume CXLIX, Issue 21998, 25 June 1941, Page 4

“WAKE UP”

Appeal To Users Of Electricity

Should Protect Their Rights

“To the users I say wake up and protect your rights; you are in a majority. Look after yourselves, for the Council won’t, and I must say i am disappointed in, the attitude of the new chairman of the department. Surely it is his duty to look after his department first instead of leading the raid for the further £BOO, and being the pro-

poser of the motion to take a

further £soo.’’ These Were remarks made by Cr. P. B. Foote in presenting a statement on the estimates at Monday’s meeting of the Timaru Borough Council. Cr. Foote said that he did not propose to vote against the estimates since they hid been approved In committie by a considerable majority but there were at least two matters on Which he Wished his objection recorded. (1) No atnpuht had Been placed on the estimates fOr hose ordered for fire protection and (2) the amount taken from the Electricity Department. As regards the first amount, quoting from the minutes: ‘‘Councillor Hall pointed out that the fire Board had ordered hose costing approximately £l5OO and that this expenditure which would require to be met by the Council was additional tb the levy already made." It would be seen the order had been given and not a penny placed on the estimates to meet It. There was a suggestion that it might not arrive this financial year, but it was sound business practice io provide for actual commitments. and he considered the Council to be wrong In the action It had taken. He also objected to the amount taken from the Electricity Department particularly the increase of £BOO, and since he was in a minority pt one, he proposed to tell the story to the users Of electricity in the hope that they might become concerned and watch more closely the pernicious practice that Was growing Of overcoming difficulties in the General Account by raids On the Electricity Aceount, This was to his mind the more necessary ds the report of the council m committee showed that motions were proposed to increase the amount in one instance by a further £1309 w> *3BOO, and Ih another by £6OO to £2BOO and had the factions who wanted the £5OO and the £l3OO compromised one with another at least the £9OO would have been carried making £2BOO this year.

PMt Practice Or. Foote went on to say that in the past, arid for some years, the Council had taken £l5OO from the department in support of the rates, and while not being satisfied with the practice, he had not unduly objected and of the £BOO extra, £3OO of it was arguable as to whether It was a charge on the General Account or not though his opinion was that shading street lights was a matter for the General Account arid not for the Electricity Department, and he was sure Government Audit Would support this view.. Users of the electricity would not doubt be pleased with the bonus provided of 71 per cent, though this was no more than their due since the amount would be paid from a cash balance arising from overcharges for electricity in the past. Their pleasure at the bonus, however, would ne considerably reduced by the raids present and future that were being and would be made on them to avoid showing the real amount spent tar the General Account. The users had with but very little assistance from the general account carried the whole burden of the department and what they had done represented a staggering total and one which he aid not appreciate till now. While it was, true that the users of to-day were not entirely the users of yesterday, so also were the ratepayers of to-day not the same as those of yesterday.

Whai Has Peen Don* "Het* Is what users have done ih the past,” continued Ct Foote. “On income Account—(l)They have paid all the cost Of maintenance, repairs, upkeep, overhead charges, administration, etc., and where a conflict arose as to whether the department hr General Account should pay, the department has paid at least its full share. (2) It hits provided for the full renewal of any nan of the undertaking which required renewal. On Capital Account—l have said that all income charges have been met but in addition users have done this: (1) They have paid off loans to the extent of £63,700. It is true that some Of thfe amoi .it is interest on sums set aside by the users for Sinking Fund but it was their money that earned the interest. (2) They have provided further Sinking Funds of £27,060 to pay off existing loans and again interest comes into the matter but the same argument applies. (3) They have provided for direct capital expenditure lor the improvement and extension of the system no less a sum than £47,488. (4) They have provided a depreciation fund of £5347 in addition to meeting ail renewals to date out of inepme Account. (5) They have found a cash balance Of £15,166 and this balance is looked on with envious eyes by the General Account. (6) They have had taken away from them to support the General Account no less a sum than £23 477. Summarised the totals were: Loans paid off, £63,700; sinking funds, £27.060; capital expenditure, £47,488; depreciation fund, £5,347; cash balance, £15,166; tor reduction of rates £23,477, a grand total on capital account of £182.238; a truly staggering total. “These figures are up to Match 31, 1941, but they do not tell the whole story,” said Cr. Foote. "(1) Users must be overcharged for their electricity for this vear to find £2300 for the general account and hr future years so much as the Council may consider expedient. (2) Users mUst find for the next six years £3302 (apart from interest on loans) to repay the existing loans. (3) Users must find from £4,000 to £6,000 a year (this year £5,990) for improvement and extension of the system. These three items alone total £11,592 and represent more than 20 per cent, of the amount estimated to be received this year from users, £52,755. “What I have shown above represents truly a remarkable achievement and surely if there are surplus funds In the department It is the users and none other who should receive the benefit and that benefit should be based not on rates but bn usage of electricity. I have shown above that the general account has taken from the users £23,477 for reduction of rates and here is what the ratepayers did for this. They agreed chiefly for their own convenience to get electricity for themselves and their tenants to the raising of the loans and the general account advanced £8796 which was repaid plus interest so that the cost was repaid, interest was paid and ratepayers are £23,477 to the good plus in the present temper of the Council further benefits to follow. It is a fallacy to say in this matter that users and ratepayers are one and the same. There are four main classes. (1) Ratepayers who use no electricity in Tlmaru. (2) Ratepayers Who pay less for electricity than they pay for rates. (3) Ratepayers who pay more for electricity than they pay for rates. (4) Tenants who directly pay no rates but who pay considerabe sums for electricity.

Mere Matter of Business

“Class one includes absentee landlords; class two represents in the main some business premises and homes built on highly valued sections; class three represents the less valuable sections particularly where an electric stove is used and class four includes tenants of all kinds, business and residential and includes Government

houses. I have no complete information as to how many, tenants there ire but there are 1800 individual tenants’ deposits held by the department, and it is known that there are more than this but how many is not certain at the moment. I can set hb reason, users having already fotihd £182.238. WhV benefits should be given to Masses 1 and 2 at the expense of classes 3 and 4, and i object and will keep oh objecting on behalf of the Users, and surely it is a inert matter OfBUMneM that for the; advancement of industry and of ernbioymont in the town that we should use every endeavour to cheapen electricity. I know that other towns and cities have dime much more injustice to users of electricity than has Tiniaru but that others have done wrong does not justify us in following suit and that no more has been taken lit the past is due to some considerable exftnt to his Worship the Mayor and niyself. There art dotens of speeloUs arguments why rates should be reduced by raids oh the department biit none of them overcome the main principal that the Users have Paid for the Whole cost of the department and are entitled to any benefits that may be cr.°Foote said that it was true that the ratepayers authorised the loan but they did it because they wanted electricity for themselves or their tenants and, so far as they used electricity, were entitled to benefits, but no further and even if they were entitled to anything for their guarantee that had passed away since only a fractional amount of the loan was now outstanding. It was true that If a company owned the undertaking shareholders would want a dividend and income tak would be payable but a company did not own it, the community did (not the ratepayers) ana the community was entitled to the benefits of community ownership and in pis opinion ‘n direct ratio to each individual’s usage of electricity, it was argue ! that the Bus and Electricity Departments should be taken as one and loss on one charged to the profit of the other. He did not agrte with this, though It had more forge than some arguments. But if It Was so, then the Bus Department received In the vicinity of £lBOO a year from, the rates, mostly for interest and slrtkhig funds, and the rates had received for some years £lBOO from the Electricity Department and this year would receive £2300. This coUld only apply,, in any case for a few years till the bus loan was paid off. Cost Camouflaged “It is true that various amenities are provided for the town out of the rates or from other fees and charges, and these should be prodded, but such provision should not camouflage the cost of these services by annual or spasmodic raids on the Electricity Department,’’ continued Cr. Foote. “I could go on indefinitely defeating the arguments of those Who want to raid the department for them own pet hobbies m for reasons of mere expediency but - know in any case that no argument I advance will have any effect On the council as at present constituted. My appeal is to the users of electricity. I am a minority of one against the increase of £BOO this year, and still m the minority, but not of one only on the general question of a further Increase, and I have to thank the Mayor on Behalf of the users rot his refusal to go further than the £2300 for this year. “To the' users I say wake up and protect your rl-lits; you are in the majority, look after yourselves, the Oouhcil wdd’t, and I must say I am disappointed in the attitude of the new chairman of the department. Surely it was his duty to look after his department first Instead of leading the raid for the further £BOO and being the proposer of the motion to take a further £500,” concluded Cr. Foote. “And finally, lest it bo considered that I have an axe to grind, I personally pay less electricity than I do rates and my business interests are very much more concerned with ratepayers than with users of electricity.” Cr. J. M. Jenkins said that he had no knowledge of the history of the Electricity Department, but the point which struck him was why the problem had not been tackled two or three years ago. He was not sufficiently conversant with the figures to express an opinion as to Whether the proportion of the profit Which was going to the ratepayers was adequate or inadequate, but he was certain that Whatever profit was made should not be sawn up by the Council, but should •be returned to those to whom it belonged. Cr. J. R. Hart said that one of the reasons why 71 per cent Was being given back to the consumers was because of an error of Judgment on the part of the previous Council and officers, and he was glad to know that the new chairman of the committee was rectifying the matter. Cr. A. E. S. Hanan made reference to the conditions of the streets and paths cracking up. He knew of paths which for 30 or 40 years had had nothing done to them, and the cracking up of the main street had been going on for the past five years. The whole cry was money, and his contention Was that citizens would have been happier if more money had been spent oil the roads and less on the reserves.

Cr. A. S. Kinsman said that he could not understand why the streets could not be kept in better repair, and they should endeavour to ascertain the cause of the trouble. He admitted that perhaps they had gone a little too far in the Reserves Department. If they got back to normal conditions they would not be able to maintain all the reserves they had.

Cr. M. H. Richards considered that they were still living In the primitive age in some of the back streets, for the grass was still growing there the same as it was when the land was taken from the Maoris.

The Mayor explained that for two or three years the cash position of the Electricity Department was poor, and the Council was forced to take steps-to rectify the position. Gradually, the position was restored, and now the action of the committee was justified by the cash position.