SINKING FUNDS

Press, Volume LXXI, Issue 21646, 3 December 1935, Page 9

SINKING FUNDS

CHRISTCHURCH CITY POSITION

REPORT OF COMMISSIONERS Funds amounting to £368,420 2s 5d were under the control of the Christchurch City Sinking Fund Commissioners at March 31, 1935, according to the annual report of the commissioners, which was read at the meeting of the City Council last evening. This sum is £35.737 10s 7d more than last year's total of £332.682 lis lOd. The commissioners are the Hon. W. Hayward, M.L.C., and Mr Arnaud McKellar. The repayments on account of the council's loan liability- amounted to , £30,341 Is 3d, of which £27,641 Is 3d 'was applied in the liquidation of the £25,000 public works loan, and £2700 on account of the abattoirs land purchase loan of £2900. In addition, , £B2oo' of debentures in sundry loans, held by the commissioners .as an investment, were applied in reduction olf the Council's indebtedness in respect of those loans by the cancellation of the debentures in terms of the loans conversion order.

The • interest receipts amounted to £17,726 .10s lid, an increase of £4511 Is, compared with the previous year's receipts, which amounted to £13,215 9s lid. The receipts gave a return of 5.203 per cent, on the available funds, an increase of .803 per cent. The expenses amounted to £164 0s lid, equal to .9254 per cent, on the interest receipts. Interest in Arrear The accounts disclose that Interest actually in arrear and within the days of grace on March 31 last amounted to £Blsl 17s 7d, all of which sums had accrued in respect of the commissioners' mortgage investments. The arrears referred to have since been reduced to £3406 13s 9d, by a sum of £4745 3s lOdVmade up as under: £, s. d. Payments .. .. 3791 19 0 Capitalisation of interest .. 808 4 10 Remissions .. .. 145 0 0 £4745 8 10

Interest remissions during the last four years total £2C74 18s 7d, which is only slightly in excess of 1 per cent, on the total of the mortgage invest-' ments, or one-fifth per cent, if spread over the period of five years in which the arrears of interest have accumulated. The average rate of interest being earned on the investments held on March 31 last was 4.579 per cent, as compared with 4.6.per cent, in 1934. "Through the conversion of a substantial portion of the council's loans it has been necessary for the commissioners to review the position of their investments in view of the large commitments which they have to meet during the next 21 years," the report states. "Ah investigation of the position already made has satisfied the commissioners that during the period of approximately 10 years ending on March 31, 1945, they should have no difficulty in providing funds for the redemption of debentures maturing during that period. "In 1946 and in the following years up to 1954 large sums will be required year by year, involving the realisation of all the existing investments. This will probably compel the commisioners on occasions to hold moneys on deposit with the bank at low rates of interest and consequently the interest returns will not be as good as under, the conditions previously existing. The commissioners are giving the closest attention to this matter." ■

Conncillors' Approval Crs. W. Hay ward and J. K. Archer spoke in warm-approval of the work of the Sinking Fund Commissioners and those associated > with them in their duties. Cr. Hayward mentioned the low cost of management and drew attention to the implied warning in the last paragraph. The council and the city, because of the reasons given there, would have to expect a lower rate of interest from the funds in , future, he said-