Investment ‘morally wrong’: RD director Kulesha

  • Dec. 15, 2003 2:00 p.m.

Queen Charlotte’s sewer and water surplus money could have earned almost $53,000, but didn’t because of the way the Regional District administrators invested the money.
Carol Kulesha and regional district administrator Janet Beil, have been checking the regional district’s books to see what happened to the money and how much interest it earned. Ms Kulesha told the management committee Dec. 3 that the surplus earned considerably less than it could have.
In 1991, the sewer and water accounts had a year-end surplus of $150,000, which was deposited in a surplus account. In the years since, the surplus has gone up and down. Some years, water and sewer had surpluses to deposit. Other years, the surplus was used for capital projects. At present, the combined surplus accounts have just under $700,000.
The management committee believed the money had been invested with the Municipal Finance Authority, which manages money for many municipalities, investing it to get a good rate of interest. However, administrators before Ms Beil put the money in a bank account where it earned less interest than it might have. They did this so the regional district could use the money as a line of credit to decrease its’ expenses. The surplus money did earn some interest, but not as much as it would have with the Municipal Finance Authority, said Ms Kulesha.
At the regional district meeting in Prince Rupert Nov. 21, Ms Kulesha brought the matter up and asked the directors to pay the $52,873. The directors refused, arguing the regional district never received the money in interest, that the previous administrators behaved legally and using the money this way kept administration fees low.
“The local government act allows the regional district leeway to place our money in bank accounts, MFA funds, bonds etc. So though the community’s money was used for the purposes of administrating the regional district, it is legal,” says Ms Kulesha.
“Though legal, I feel that this was morally wrong,” she said. “Unincorporated areas depend on their regional district to look after their best interests. In this case it was the regional district’s best interest as they used the community’s monies as a line of credit, decreasing their expenses.”
Earlier this fall, the regional district created capital reserve accounts for the management committee’s sewer and water accounts, but the Area F director will have to work closely with the district administrator to make sure future money is placed in the those reserve accounts, said Ms Kulesha.