The Waterbury Democrat., 1938-05-20
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pertinent, paving of street, for the same years, over-expended approxi- mately 1,275 900; for the Street De- partment, paving of streets, for the streets, for the same years over-ex- pended approximately $102,000; for the City Comptroller, administra- tion and compensation, for the same years over-expended approximately $95, ,000; for the City Comptroller, in- terest on floating debts, for the same years over-expended approximately $160,000; for the City Comptroller, interest on city funded debt, for the same years, over-expended approxi- mately $65,000; and for Legal De- partment for payment of verified claims against the city for dam- ages or injuries to persons or prop erty for the same years over-ex- pended approximately $160,0O0.
 In each year of the Hayes-Leary administration, portion of the city'S current expenses has been paid through the illegal diversion of funds from the Surplus Resource Sinking Fund and through the il- legal use of proceeds received from sale of bonds intended solely for funding purposes. Section 99 of the charter sets forth the purposes for which the Surplus Resource Sinking Fund may be used and specifically provides that the fund shall not be used to pay current expenses.
 Charter Stipulation
 Section 96 of the charter provides that the fund shall be managed and controlled by Board of Sinking Fund Commissioners consisting of the members of the Board of F- nance, and that the Board of Sink ing Fund Commissioners shall ap- point treasurer of said sinking funds. During the eight-year per- iod Comptroller Leary has been also the treasurer of the Surplus Re- source Sinking Fund. It is an ac- cepted principle of sound financing that when fund is established of whatever amount and for whatever purpose, there becomes trustee ship, and the assets of the fund, in- cluding the cash portion thereof, should be kept separate and intact from any other assets. Notwith- standing this principle and notwith- standing the specific language of the charter, the Comptroller has drawn upon the Surplus Resource : Sinking Fund at will for the purpose of paying current operating ex- penses, and at no time since 1881, has the Surplus Resource Sinking Fund been segregated from other funds or assets of the city in the various Repositories. All receipts were co-mingled, thus making it possible to draw checks without re- gard to the fact that an overdraft might exist in the general funds. It becomes apparent, therefore, that any checks which ordinarily would represent overdrafts were paid by th9 bank out of the Surplus Re- source Sinking Fund balance, al- though, of course, the bookkeeping entry on the city books would not reflect such a condition. It is in- conceivable that the auditors of the city's books could have permitted such a condition to continue with out comment.
 The laxness with which the board of Sinking Fund Commissioners, dominated by the Comptroller, handled this fund is illustrated by the following vote at a special meeting of the Board of Sinking Fund Commissioners held on De- cember 30, 1881:
 Sinking Fund Vote
 'Voted: That use be made of so much of the Surplus Resource Sink ing Fund, First District as is neces- sary to pay the following described floating indebtedness of the City as provided by law (SL 1925, Oh. 339, Sec. 6)
 Legal Department Ex-
 penses $27,325. .35 Auditing Expenses, c. P. A.
 Comptroller's Office 3,587.58 Cleaning Scovill Company
 Canal Expenses 2,718.58 Purchase of land, American
 Brass Company 2,003.O Bureau of Tax Com-
 missioners 13,4OO.oo
 49,034.51
 The City Clerk is hereby instruc- ted to notify the Treasurer of such fund to deposit with the City Treas urer, the total amount called for by this vote and the City Comptroller Is authorized and required to draw and the City Treasurer to pay the necessary orders for payment in ac- cordance with this vote."
 An analysis of the vote as passed by the sinking fund commissioners discloses. first, that use be made of the sinking fund to pay floating in- debtedness of the city as provided by law, and then reference is made to the Special Acts of 1925. The re- vised city charter was approved by the legislature at the 1881 session, and after the date of such approval all financial transactions of the city should have been governed by the new charter. Therefore, it appears to the Grand Jury that the sinking fund commissioners could legally make appropriations only as pro- FAoCA AAA AVNAVOAA OV O4 VAAC NAldk VCk |, one of the provisions of which is to pay floating indebtedness of the city. The question then arises as to whether the items voted to be paid from the Surplus Resource Sinking Fund were in fact such as might be considered floating indebtedness.
 The item of legal department ex- penses, in the total amount of $27,- 325.35 was recorded on the books of the city under date of December 31, 1891, after the vote was passed by the sinking fund commissioners to pay the same from the Surplus Re- source Sinking Fund, but the items had in fact been paid by check many months prior to that vote and prior to their entry on the books.
 Following is list of payments so made:
 Sinking Fun