LOAN PROPOSAL PROCEDURE

Taupo Times, Volume IV, Issue 194, 14 October 1955, Page 4

LOAN PROPOSAL PROCEDURE

As reported elsewhere in this issue, the Local Government Loans Board has notified the Borough Council of its approval ; of the CounciTs application for sanction to borrow £130,000 for the purpose of establishing a water supply in the Borough. In doing so the Board has intimated that it was prepared to sanc- j tioir. a 30 year term for the loan, in place of the 20 year term applied for, on certain conditions, a change that is of advantage ; in that it would reduce annual charges. Following on public discussion of the proposed electric I power loan, cnquiries made to the Times inclicate that many | ratepayers are not conversant with procedural details in loan | matters, and an outline of these at the present time may there- J fore be of some public interest. Following public notification bv | the Council that it propcses to consider a motion to apply to the 3 Loans Board for sanction of a loan, such motion comes before the J Council at the advertised meeting, and on its being passed the | application is sent to the Loans Board, as in the recent case of | the proposed electric power loan. With the application go anv | objections received in writing from ratepayers. The Loans Board then considers the application, and mayf ask for any further information it deems necessary. It Hiay| either decline the application or grant it, with or without modi-j fications. If it sanctions the loan, it may require a poll to be taken. J If it does not require a poll to be taken it authorises the Council 1 to proceed by passing a resolution by way of special order. This | is the case with the present water supply loan. If a poll is order- J ed it is held after due statutory notice has been given by adver-J tisement. | If the special order method is approved, the Council holdsf a special meeting and passes the resolution, which gives full de- j tails of the amount to be raised, the purpose of the loan, the ratel of interest, term and security rate. This resolution has to bel confirmed at a later ordinary meeting, the date of which is adver- 1 tised and which must be not less than 28 days, nor more than 421 days, after the first meeting. The advertisement must appear| twice, between the two meetings, and contains the text of the | resolution and also gives notice that a poll is required to be taken 1 if five per cent. of the ratepayers so demand, in writing deliveredj to the Town Clerk before the date of the meeting at which the | resolution by way of special order is to be confirmed. 1 The foregoing provisions thus ensure that a loan proposall can be required to run the gauntlet of a poll, even if the LoansJ Council does not order one in the first instance, if five pei cenLJi of the ratepayers demand one. The advantage ot the special order 1 method, of course, is that delay in raising a loan is avoided if| no poll is asked for by the ratepayers. As reported in this issue,! the Mayor, Mr J. E. Story, has stated that the resolution m con-| nection with the water supply loan will come before the CouncilS after the scheme has been explained at a public meeting. |j