Council property funds use deferred again

Ruapehu Bulletin, Volume 9, Issue 404, 17 September 1991, Page 3

Council property funds use deferred again

In a second 'workshop session' the Ruapehu District Council discussed the use of funds derived from the sale of property and assets within the district. At this stage no end use has been determined for these funds and the fundamental issue to be addressed is whether the funds in question should be used for the general benefit of the Ruapehu District or the benefit,

in particular, of the area which originally provided the assets. In a paper prepared for councillors to consider general manager Cliff Houston explained that the term 'property and assets' in this context covered all types of property including land, buildings, plant, machinery, shares, investments etc. In the past there had been a difference in ap-

proach to the question of property and assets by the former Taumarunui Borough, Taumarunui County and Waimarino District councils prior to amalgamation. The Taumarunui Borough made a decision to realise its energy undertaking and staff houses and invest the proceeds in special funds which were locked into projects that would benefit the former Taumarunui

Borough. The Taumarunui County and Waimarino District did not take any such action prior to amalgamation and, as a result, their properties and assets were carried over to become the property of the Ruapehu District Council on an 'un-tagged' basis. Therefore, whilst each authority was entitled to take the actions it did, it could be argued that the Turn page 5

Property fund

From page 3 'playing field' was not level as the former Taumarunui Borough Council ensured that a substantial part of its assets was not available to the Ruapehu District for general purposes. Mr Houston explained that if councillors were of the view that separate special funds should be creatcd from asset saies the question then has to be addressed in terms of the Waimarino Community Board's recommendation of 4 July 1991 that money resulting from the sale of District property and assets should be set aside as a general reserve for that (particular) ward except that each ward would pay its proportion of ward rate of the total rate of the $250,000 borrowed for amalgamation costs. If councillors adopted that approach Mr Houston pointed out some of the difficulties which would arise in trying to determine the area of benefit. "For example, funds realised from the sale of properties disposed of within the Waimarino Ward might, at first glance, be considered for application towards projects within that Ward but this begs the question of who provided for the cost of those properties and assets in the first place, the options being the Ohakune Borough, the Raetihi Borough or the Waimarino County." I would urge the Council to give serious consideration to moving away from the 'piggy-bank' approach whereby discrete amounts of funds would be invested for use on specified projects instead Of investing funds in the Council's general

reserve on a neutral basis to be used in future on projects considered to be the most meritorious," he said. "The major disadvantage in establishing a special funds account is that it tends to prioritise certain projects simply because of the availability of allocated funds rather than having them treated on their merits together with all other demands for funds at the time funding decisions are made." "By prioritising funds in the past some essential work has not been done because special funds have been allocated to certain projects - recreation etc - and what we need to lcnow in future are the total funds available to Council and what the prior ities are," said Mr Houston. Councillor Ken Malcolm said that what had happened in the past (viz-a-vis the separate borough and county councils) were now history and that "we are now one district" (and should act accordingly). However, Councillor Doug Bennett, suggested that each ward should be able to retain some portion of the , general funds within their own areas to service local demand. "Perhaps the total pool could be divided up on a proportional basis," he said. Councillors agreed to adopt Mayor Garrick Workman's suggestion that as an interim measure any funds resulting from the sale of property and assets should be invested in an account from which no monies can be withdrawn until, at some future date, a decision is made about how these funds may be spent.