Town Council

Haraldur Þór Ólason then took the floor. Gunnar Svavarsson made an intervention, to which the speaker replied. Gunnar Svavarsson made a second intervention, to which the speaker also replied. Jón Páll Hallgrímsson then took the floor. Rósa Guðbjartsdóttir made an intervention, to which the speaker replied. Rósa Guðbjartsdóttir made a second intervention. Almar Grímsson took the floor. Lúðvík Geirsson asked a question. Almar Grímsson left the meeting and María Kristín Gylfadóttir took his seat. Haraldur Þór Ólason took the floor. Gunnar Svavarsson asked a question to which the speaker replied. Gunnar Svavarsson made a second intervention, to which the speaker also replied. Jón Páll Hallgrímsson made an intervention, to which the speaker replied. Lúðvík Geirsson made an intervention, to which the speaker replied. Rósa Guðbjartsdóttir took the floor. Gunnar Svavarsson asked a question which the speaker answered. Gunnar Svavarsson asked a second question, to which the speaker also replied. Gunnar Svavarsson made a brief remark. Also Rósa Guðbjartsdóttir. A short break in the meeting. Rósa Guðbjartsdóttir left the meeting. María Kristín Gylfadóttir took her seat. Almar Grímsson returned to the meeting. María Kristín Gylfadóttir took the floor. Then Lúðvík Geirsson. Maria Kristín Gylfadóttir intervened with a point of order, which the speaker answered. Haraldur Þór Ólason left the meeting and was replaced by Skarphéðinn Orri Björnsson. Maria Kristín Gylfadóttir intervened with a point of order for a second time. Gunnar Svavarsson took the floor. Then Skarphéðinn Orri Björnsson. Gunnar Svavarsson made an intervention. The First Deputy Speaker, Guðmundur Rúnar Árnason, took the chair. Ellý Erlingsdóttir took the floor. The Speaker took the chair again. Then Margrét Gauja Magnúsdóttir. María Kristín Gylfadóttir made an intervention to which the speaker replied. Almar Grímsson took the floor and responded to Lúðvík Geirsson. Margrét Gauja Magnúsdóttir took the floor, followed by Almar Grímsson. Gunnar Svavarsson responded. Guðmundur Rúnar Árnason then took the floor and responded to Almar Grímsson. Haraldur Þór Ólason took the floor. Gunnar Svavarsson replied, to which the speaker responded. Gunnar Svavrsson replied. Guðfinna Guðmundsdóttir took the floor. Then Almar Grímsson. Gunnar Svavarsson intervened with a point of order. Haraldur Þór Ólason took the floor. Guðfinna Guðmundsdóttir made a point of order, to which the speaker replied. Margrét Gauja Magnúsdóttir made a point of order. Gísli Ó. Valdimarsson took the floor. Almar Grímsson made a point of order, to which the speaker replied. Almar Grímsson made a second intervention, to which the speaker also replied. Jón Páll Hallgrímsson took the floor. Then Haraldur Þór Ólason. Gísli Ó. Valdimarsson made an intervention. Lúðvík Geirsson took the floor.

A vote was taken:

Capital items (210,395)

Annual results 235.945

Shareholders“ Equity at Year-End 7.521.969 8.315.307 9,621,727

Investments 235.000 235.000 250.000

“The budget for 2009 from the Social Democratic Alliance's majority is incomplete and full of uncertainties. This is a direct consequence of the Alliance's reckless financial policy over the last 6 years.

Some key points that are necessary to bear in mind when dealing with this incomplete plan of the Social Democratic Alliance are:

- In the 2008 financial forecast, a capital gain of 6 billion krónur is expected from the town's share in the South-West Geothermal Power Company, but this amount has not yet been paid and there is great uncertainty about the outcome of the matter, which is now before the courts.

- The city's 2009 budget provides for 1 billion króna in interest income from the capital gains. This is a deliberately misleading presentation to beautify the city's accounts by 7 billion króna.

- Since 2003, when the Social Democratic Alliance took over the city's government, debt has increased by 22 billion króna, or has nearly tripled.

- <SPAN style=“LINE-HEIGHT: 115%; FONT-FAMILY: ; FONT-SIZE: 12pt“ lang=IS Roman?? According to the City of Hafnarfjörður's forecast for 2008, the municipality's liabilities increased by 50% year-on-year, or by 13 billion króna, from 21 to 34 billion.

- During the Social Democratic Party's time in government, the municipality's revenues have only been enough to cover its running costs, while construction projects have been financed solely through borrowing.

<SPAN style=“FONT-SIZE: Another key point in the Independence Party's proposals in recent years has been to find ways to save money in operations and through the sale of assets to address the City of Hafnarfjörður's heavy debt position. Thus, in the summer of 2007, we proposed that Hafnarfjörður's stake in the South-West Heat Company (Hitaveita Suðurnesja) be sold at the earliest opportunity. The Social Democratic Party squandered this opportunity, and now there is great uncertainty as to whether it will be possible to realise that significant benefit, amounting to around 8 billion króna. How much will each resident of the municipality owe if that happens?

“Hafnarfjörður will place primary emphasis on strengthening the well-being of its residents and protecting the municipality's core services in the current special circumstances in the nation's economic and employment affairs. The clear message from the councillors of the Social Democratic Alliance and the Left-Green Party in the adoption of the 2009 budget for Hafnarfjörður is to protect the welfare and services for the town's residents, and on that basis the budget is founded.

In order to achieve those main objectives despite a significant reduction in the town council's income, it will be:

• Positive operating result for the municipal treasury targeted for 2009
  
• All general service charges in schools and basic services will remain unchanged in nominal terms.
  
• <SPAN style=“FONT-SIZE: 15% to help with household and business running costs
  
• Power to increase council tax used to offset a reduction in revenue from property taxes.
  All new projects will be fully completed as funding is secured.All new projects will be fully completed as funding becomes available.
  
• The investment and implementation plan has been revised to date in accordance with the general state of the economy.
  
• 
  

<SPAN style=“COLOR: black; New collective agreements will increase the city's wage costs by 300 million króna in 2009. To offset this wage increase, a saving of 200 million króna is expected in salary and vehicle costs in 2009. This saving will be achieved through a reduction in overtime hours, a change to shift patterns, shorter opening hours for institutions, a reduction in the highest salaries, a reduction in payments to committees and boards, and the termination and amendment of vehicle allowance agreements.

Operating cash flow for Sector A in 2009 is estimated at 860 million króna, and the combined total for Sectors A and B reaches 1,617 million króna.

The main objectives in the financial and operational plan of the City of Hafnarfjörður for 2009 will include, among other things:

· Rely on the fundamental pillars of family, school, youth and sports affairs.

· Defend the jobs of general staff.

· To ensure equal status and opportunities for all residents of the town, young and old, to participate and have access to services and social activities.

· Complete the planned new projects, as funding becomes available.

· Strengthen the business community by all available means; including extensive cooperation with the parties to the labour market and support for innovation, idea generation and development work.

· Utilise the human resources available in the municipality through active cooperation between residents, associations, businesses and organisations.

· Place as strong an emphasis as before on consultation and cooperation, both within the town council and with the town's employees, residents and stakeholders, in order to achieve broad consensus on actions and key priorities.

· To ensure the public welfare of the town's residents and to provide support and services to those who require special assistance.

<SPAN style=“COLOR: black; The budget for 2009 is prepared and presented under the special circumstances now prevailing in society following the economic collapse and the bankruptcy of the banking system. A complete turnaround has occurred in the nation's economic and employment life in just a few weeks, and great uncertainty prevails regarding the progress and development of these matters in the coming months and quarters. These circumstances will undoubtedly have an impact on the council's plan as presented here. This situation will be addressed through even more targeted operational and cost monitoring, and regular reviews of the current plan. This will be done, amongst other things, through monthly reports that will be presented to the council's advisory group and the council. Furthermore, the budget will be reviewed for reassessment and revision as circumstances require.

During periods of great pressure in recent years, the internal strength of the administration, staff and elected representatives has been tested. The success of that great work is clear for all to see. Now, this strength and our human resources will be tested even further under completely changed circumstances, where above all, endurance, perseverance, resourcefulness and foresight will be put to the test.

We would like to thank all the staff of the municipality, as well as the elected political representatives and officials in the local authorities throughout the capital region, for their part and involvement in the consultation and cooperation under the special circumstances that currently prevail.