CIVIC FINANCES

Sun (Auckland), Volume IV, Issue 993, 9 June 1930, Page 10

CIVIC FINANCES

UNEXPENDED LOANS LENT TO GENERAL ACCOUNT CR. LUNDON COMPLAINS Complaint is made by Cr. J. R. Lundon that Town Hall officials .have been diverting unexpended loan balances to provide temporary loans to the general coffers of the civic treasury—a procedure which the councillor contends is irregular and should not have been done without consent of the ratepayers. The town clerk. Mr. J. S. Brigham, has replied to certain points Cr. Bundon has raised, and further contentions will be referred to the City treasurer for explanation when the official returns from his leave. Cr. Lundon writes to the editor of The Sun as follows: Sir, — In seconding pro forma Cr. Murray’s motion at Thursday’s City Council conclave favouring civic retrenchment, I submitted the following facts and figures as indicative of the advisability of a thorough investigation by trained experts into the financial aspects of our Town Hall administration. I now ask you to publish them for assimilation by ratepayers and citizens generally. Six years ago the council borrowed £40,000 at per cent, per annum interest fro mthe State Advances Office on which to build workers’ dwellings at Grey Bynn, on council’s property next to the Zoo. Of that sum there remained £3,945 13s lid unexpended. That loan balance has been in the Bank of New Zealand for short periods on fixed deposit (say) 4 per cent. Another loan balance (Remuera Bibrarv loan) of £455 11s, has also been on fixed deposit in the same bank; like wise £1,300 Costley Free Bibrary bequest. Recently it was stated officially in my presence at the Town Hall that the above-mentioned £3,945 12s ldd was then on fixed deposit at the Bank of New Zealand at 5 per cent, for two years. This was subsequent to the Town Clerk's correspondence with the State Advances’ Office as to whether the superintendetn would accept a refund to him as part payment of the £40,000 loan, bearing interest at 4£ per cent. Although the superintendent consented to its being paid into the Post Office to his credit, it was never paid to him. tl has appeared on every tri-weekly report of the Finance Committee, including the one adopted by the council last Thursday, since April 4 last, as being on fixed deposit, and is so certified up t oMay 20 last, by thq City treasurer himself to the Finance Committee and the Council. The stark cold fact is that the workers’ dwelling balance, together with the Remuera Bibrary loan balance, and the Costley Free Bibrary bequest were removed from fixed deposit at the Bank of New eZaland on April 4 a»d April 1 respectively, and all three, totalling £5,701 3s lid, weer apropriated in the terasury as “temporary loans,” and used as such and as so much cash paid into the City’s District Fund Account, out of vr.Moh it passed in paymi Mf'j r . */■»* v > ments as current expenditure. I personally inspected this temporary loan account of the treasury on Thursday last, and extracted a complete copy thereof. The officer in charge frankly admitted to Cr. Murray and me that no part of this £5,701 3s lid has at any time been on fixed deposit anywhere since April 4, and that this money was wholly on “temporary loan” to the City, given at that date (and as to the Costley £1,300 since April 4 last) and also that a City fixed deposit meant money placed for a definite fixed term (in the Bank of New Zealand), while “temporary loan” money invariably went into the District Fund Account. How, therefore, is it that continuously since April 4 up to May 20 this £5,70*1 3s lid has been certified by the City treasurer as being still on fixed deposit? “NO ELUCIDATION”

The treasury officer in temporary charge could offer no elucidation. I asked the Mayor in council last Thursday for an official explanation and also for the statutory or other legal authority for putting those public loans balances into the civic till, disbursing them in the same way as revenue from the district fund. His only reply was characteristic of our chief civic magistrate, and couched in language and tone which- no previous Mayor of Auckland could ever have been capable of. “You don’t expect a councillor to swallow this rubbish,” quoth Mr. Baildon, and that’s that. Some little time ago after I had read to the council the preliminary statutory requirements in seeking to divert unex * pended loans or loan balances and to obtain authority for such diversion, Cr. Entrican declared that if the council spent or appropriated any loan balances on other than the specific purposes for which the ratepayers granted the loan, councillors would find themselves in Mount Eden. • As neither of these two loans was voted with any idea in the minds of ratepayers of balances therefrom ever being appropriated as “temporary loans” to the district fund account, I now invite Cr. Entrican to favour readers with anything he may think up on the subject of Mount Eden in this connection, and perhaps Crs. Hutchison, Campbell and Bagnall would publicly give evidence of their unctions and self-advertised profesison status, and predominance by justifying what they have silently adopted herein. J. R. BUN DON. Councillor. Invited today to comment on the letter the Town Clerk, Mr. J. S. Brigham, said that the object of utilising unexpended loan balances as “temporary loans” was that the money in each case should be readily available and at the same time be earning interest instead of lying in the bank unproductive in current account. Owing to the possibilities of the Workers’ Dwellings money being required it was considered advisable to place this money on fixed deposit in the bank for a definite period. At first there was the idea of asking the State Advances Office to take back the unexpended portion of the £40,000 loan on maturity of the fixed deposit, said Mr. Brigham. Then it was decided to hold the cash when the question of the workers’ dwellings came into the air a few months ago and the money was placed on “temporary loan” to be readily accessible. As for the Costley bequest of £1,500, it had never been on fixed deposit in the bank. , Mr. Brigham said he had no knowledge of the City Treasurer’s, Mr. Andrew Messer, certificates Cr. Bundon mentions. At present Mr. Messer was away on leave. The Town Clerk suggested that Mr. Messer be approached for a statement on his return at the end of next week.