Chapter 29:15 URBAN COUNCILS ACT (a) all councillors who were present at the meeting at which the resolution to borrow the money was passed and who did not record their dissent; and (b) all councillors who otherwise purported to authorize the borrowing of money; shall be jointly and severally liable to repay the money so borrowed and all interest payable thereon, and the amount may be recovered from such councillors by action in any competent court: Provided that a councillor shall not be liable under this section if it is proved that— (a) he did not know of the contravention; and (b) his lack of knowledge was not the result of a failure on his part to exercise reasonable care in the matter. 295 Repayment of loan A council shall, except where it is operating a consolidated loans fund in terms of section two hundred and ninety-seven, provide annually for the repayment of loans by— (a) sinking funds as provided in section two hundred and ninety-four; or (b) equal fixed instalments of principal and interest; or (c) equal fixed instalments of principal; or (d) such other method as the Minister may approve. 296 Sinking fund (1) Whenever any moneys are borrowed by a council and are repayable at the end of a fixed period, the council shall, unless otherwise directed by the Minister or except where it is operating a consolidated loans fund in terms of section two hundred and ninety-seven— (a) establish a sinking fund for the repayment of each loan; and (b) subject to this section, pay every year into such sinking fund from its general revenues such equal annual instalments as will, with accumulations in the way of compound interest, be sufficient to pay off the loan concerned within the period for which it was borrowed. (2) The annual instalments payable in terms of subsection (1) into the sinking fund shall— (a) unless otherwise directed by the Minister, commence within twelve months from the date on which— (i) the moneys were borrowed; or (ii) the work or purpose for which the moneys were borrowed was completed; as the council may determine; (b) be computed on the basis of accumulating interest at an assured rate equal to the interest rate payable on the moneys borrowed less one and one-half per centum per annum. (3) If the average rate of interest earned by the sinking fund established in terms of subsection (1) is— (a) less than the assured rate, the council shall make such increased payments each year to the sinking fund as will cause the sinking fund to be sufficient for the purpose; (b) more than the assured rate, the excess of earnings over the assured rate shall be refunded to the general revenues of the council. (4) The council shall invest the moneys in the sinking fund— (a) in the manner provided in section three hundred and two; or (b) with the approval of the Minister, in advance for capital projects for which the council has borrowing powers. 297 Consolidated loans fund (1) A municipal council may, in accordance with a scheme prepared by it and approved by the Minister, establish and operate a consolidated loans fund which shall be used to account for all moneys borrowed, the redemption or repayment thereof and the payment of interest thereon. (2) A scheme referred to in subsection (1) shall make provision— (a) for the purpose for which payments are to be authorized or required to be made out of the fund; and 118