The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1889-03-16
THE SINKING FUND.
The Report of the Commit
tee Appointed to InVes-
tigate 1t Made This
Morning.
FINANCE METHODS APPROVED,
The Board Favor the Creation of a
Specific Sinking Fund Commits
sion.

- =
Specific Sinking Fund Commits
sion.
The Board of Finance held special
meeting this morning to receive the re-
port of Allan L. McDerinott, E. f. c.
Young, John ID, Carscallen and George
| W. Clerihew, the committee appointed
to learn just what the facts concerning
the city's sinking funds are.
The report reads as follows:-
There have been established by law sew
eral sinking funds, but with the excep-
| ton of the fund of 1878. and S144OO in a
! have been any moneys collected for their
| benefit. Summarized, the present condi-
| tion of the various funds may be stated as
! follows:
FUNDS OF 1879, 1889 AND 1884.
For the payment of bonds, these funds
! are without other than contingent assets.
| As to each of them the law requires the
| annual inclusion in the tax levy of GER
| tain per centum of the respective issue of
| bonds, to meet the same at maturity. The
law appears to have been complied with
| so far as placing the amounts in the tax
levy, but the payment into the funds
Will evidently be postponed until the col
| lection of the LAST arreaTages of each levy.
THE FUND OF 1884.
By the provisions of an "Act concerning
cities" Qaws of 1884, page 107), the amount
of annual expenditure for all city pul-
poses is limited to ninety per centum of
| the amount raised by taxation. The re-
naming ten per centun1 is directed to be
appropriated to sinking fund for the
purchase or payment OF bonds. The OBJ
| ject of this act is evidently to prevent an
nually recurring deficiencies This fund
| has not received any money, and pay
ments to it will probably be postponed
until after the collection of over ninety per
centpm of the levies made after its enact
| lnent.
| twill he seen that under the present
| system of fiscal management the only fund
which we may look for items of credit lex
| cept the item of S14, 400 in the year 1882,
| before the collection Of over eighty EIGHT
| per centum of a tax levy, is the fund of
| 1873 Payment to the other funds is as
| above noted, postponed until the collection
of the last eleven and twelve percentum
| of the levy. This method of postponement
| Of payment to these funds is, in the
opinion of your committee, legal, and, if
properly graded consistent with sound
financial policy. 70 sequester earlier col
lections would necessitate the payment of
| interest upon unnecessary leans The
sinking fund of 1873 is the only one, with
| the exception above noted, which appears
| to have received any credits. This fund
received from the inception to the 9th
| day of December, 1883, the total sum of
| 81, 49,, ,69916. OF this amount 81 ,045, OPS has
been used for the payment of bonds, and
| the balance appears, by the testimony of
the City Comptroller, to be distributed as
| follows:-
Temporary loans 81, ,25s, 900 90
| Bonds purchased. =. .......... 267 go II
Taxes and license fees returned, !. 12,158 Sc
Transferred to general account to cor
Cash rget on Inland hand ....'''. aaS 1SsS7 sS =
Total III, ,674 16
| Since the creation of the fund of 1873. it
| has been customary for the Board of
| Finance and Taxation to borrow money
therefrom, upon what are known as tenn
| porary loan bonds. This course was evil
IDENTIFY induced by the non-payment of
| taxes and assessments, the alternative
being the finding of annual differences
between expenditures and collections
Whatever merits may be credited to this
custom must rest on the ground of con-
venience, and its continuance will, in our
opinion, prove destructive to the integrity
of the sinking funds.
NEW COMMISSION SUGGESTED.
It means, in the light of custom, that
these funds are to be eventually used for
the retirement of bonds, provided the
temporary loan bonds are paid from fu-
ture receipts, and Those future receipts are
not, in turn, borrowed. The fact that the
assets of this fund are now almost wholly
composed OF these Temporary loan
bonds demonstrates this proposition, and
the further one that, practically, the only
day the unpaid taxes and assessments.
AS these are hereafter collected, they
should be devoted to the reduction of the
bonded debt of the city, except SO far as
they are collected on account of the levy
Of the present fiscal year. In order that
this may be properly done, it is evident
that the sinking funds should be rescued
from the intermingling, which has taken
place, of their identify with the other fiscal
affairs of the city. If these funds are to
be of any use in the conservation of the
city's credit, it can only be by keep
portance, the object of their creation
They are to be used to pay and pur-
chase and retire bonds. If loans are to be
made from these funds to the city it
should be because such loans are to the
advantage of the funds, and not because
of the necessities of general municipal
management. In order that this may be
done, q enforcement should be had of
these funds from all other city depart
ments, and we suggest to your honorable
Board Une prOpflely OIL taking SpepS TO
have these funds placed under the con-
troll of commissioners who will have their
custody and Investment as their sole muni-
cipal function.
THE WATER TAX MONEYS.
There is yet another fund to which the
owners of bonds may look for payment,
it's assets consisting of certain taxes under
the Martin Act" 10 the 1st Of January.
1889, about $4,000 had been collected of
taxes and assessments adjusted under this
act, of which about SIS, 600 were used pay
the current expenses of the city govern
ment. During December last, ,as appears by
the testimony of the City Comptroller,
special fund was created, to which collec-
tions under this act are now credited.
This course should have been adopted in
the first instance. During our investi-
cation, we have been attended by the City
Treasurer and City Comptroller and their
assistants, and have received from them
every possible aid in the examination of
their accounts.
The Board passed resolution re-
qucsting Corporation Counsel Blair
to draft bill divorcing the care of
the Sinking Funk from the other
duties Of the Board of Finance.