Insurance reserves to finance pool

Press, Volume CXII, Issue 32874, 24 March 1972, Page 1

Insurance reserves to finance pool

The $476,000 reconstruction of the Centennial Pool may be financed partly from the City Council’s self-insurance reserve for its public risk and motor-vehicle cover. The reserve at present stands about $750,000.

The City Council at its meeting on Monday agreed without dissent that from March 31 its public risk and motor-vehicle insurance cover would be placed with the New Zealand Municipalities Co-operative Insurance Company, Ltd.

The chairman of the finance committee (Cr D. R. Dowell), questioned last evening, said that because financial reserves were being eroded by inflation, it was sound business to use the reserves for

capital works. The City Council, he said, had shares in the Municipalities Co-operative Insurance Company and that company had offered terms which would mean a substantial saving in the amount the council at present was put-

ting aside for premiums at the current market rate. In fact, there was an amount being funded by the council in premiums in excess of claims. “We are convinced that it is better business to take advantage of the terms offered by the municipalities insurance co-operative than to continue to provide our own insurance. "As I -said at the council meeting, the use of reserves for capital works is proper; but I also said that the use

of reserves to relieve rates is not right In committee, I think I am entitled to say, the opposition members of the council did not question the proposal provided reserves were used for capital works.” Cr Dowell was emphatic that the reconstruction of the Centennial Pool would not be financed solely from the insurance reserve. The pool project would be financed over two years, and it might be that some of the insurance reserve would be needed during the next financial year. "However, as Isaid in open council meeting, the reconstruction of the Centennial Pool, for the use of both the city and greater Christchurch, will not be a burden on the city ratepayers and will not be a cause for increasing rates,” he said.

Not all used Cr Dowell said that it was not intended to use all insurance reserve on any financing of the reconstruction of the Centennial Pool; nor was it intended to exhaust that reserve on any other capital works.