URBAN COUNCILS ACT Chapter 29:15 (6) Except in the case of a municipal council which is operating a consolidated loans fund in terms of section two hundred and ninety-seven— (a) all moneys borrowed by a council shall be applied to the project for which they were borrowed and, if not immediately required for that project, may be invested in the manner provided in section three hundred and two; (b) if the loan moneys are not expended in full on the project for which they were borrowed, then the unexpended portion shall be applied to— (i) the reduction of the original loan or advance; or (ii) any other purpose for which the council has borrowing power; or (iii) any other purpose approved by the Minister. (7) The council shall, within three months of the end of each financial year, prepare and submit to the Minister a statement showing the borrowing powers which have not been fully utilized. (8) Where a council has obtained a borrowing power which it has not exercised, the Minister may, after giving the council concerned not less than twelve months’ notice of his intention to do so, cancel that borrowing power, either wholly or, if the borrowing power is by nature divisible, in respect of any portion thereof. 291 Short-term borrowing The council may borrow money by means of bank overdraft or short-term loans or both from any person for the purpose of temporary financial accommodation: Provided that— (i) the aggregate of the money borrowed in terms of this section shall not at any time exceed the aggregate of the income of the council in the preceding financial year from rates unless the approval of the Minister for the borrowing of the amount in excess of that figure has been obtained; (ii) no money shall be borrowed in terms of this section for the purpose of financing capital expenditure unless a borrowing power for such capital expenditure has been obtained. 292 Salaries of permanent employees to be met from revenue No capital or loan account of a council shall be used for the purpose of meeting the emoluments or any portion thereof of a permanent employee of the council unless the Minister has authorized the council to meet from such account the emoluments or such portion as the Minister may specify of the emoluments of that particular employee or class of employees of which he is a member, as the case may be. 293 Security for loans (1) All loans made to a council, whether before or after the date of commencement of this Act, shall be secured and charged upon the assets and the income of the council and all securities granted by the council in respect of such loans shall rank equally without priority. (2) Whenever any council has failed to pay any sum due by it on account of interest on any loan or the repayment of any loan by instalments or otherwise, the Minister may direct such council to remedy its default within a period of one month, and if the council fails to comply with such direction within one month the Minister may— (a) direct the council to make and levy a rate on property within its area sufficient to produce the sum due; and (b) if the council fails to levy such rate within one month of such direction, the Minister may himself levy the rate as if he were the council. (3) Any rate referred to in subsection (2) shall be levied in all respects as if it were a rate levied in terms of section two hundred and seventy-two or two hundred and seventy-four and the moneys collected shall be applied in payment or repayment, as the case may be, of the sum due. 294 Illegal borrowing If a council borrows any money in contravention of this Act— 117