Operational improvements yield good results
A 300 million króna surplus from the operation of the City of Hafnarfjörður
According to the proposal for the 2016 budget for the City of Hafnarfjörður, which was presented at a town council meeting today, there will be a surplus of 300 million króna in Sections A and B. Operating cash flow is projected to be 15% of total revenues, or 3.3 billion kr., which is a prerequisite for successfully reducing the town's debt. Operational improvements and austerity measures are expected to ensure that service levels remain unchanged and that there is scope for debt repayment. Hafnarfjörður's debt ratio is forecast to be 177% at the end of 2016, compared to 202% at the end of 2014 and 216% at the end of 2013. The municipality's foreign debts will for the most part be repaid by the end of 2015, so that in 2016 almost all of its debts will be in Icelandic krónur.
Major operational improvements are planned for the Municipality of Hafnarfjörður. Some have already taken place, while others will be implemented next year. For example, operating costs will be reduced by making greater use of tenders. The plan provides for a balanced operating budget for Section A next year. For the second year in a row, fees for nursery schools are not expected to increase. Council Tax will increase, but this will be offset by a reduction in water and sewerage charges, so the overall burden on residents will not increase.
The plan provides for the allocation of plots to begin at the start of the year in Skarðshlíð, a new residential area in Völlunum. Preparations for a new nursery and primary school in the neighbourhood will also begin. The proceeds from the sale of plots in the estate are intended to cover this cost. Furthermore, construction is expected to begin on a care home on a building plot at Sólvang. The construction of a new nursery school, Bjarkarvellir, for up to 100 pupils is also expected to be completed, with the facility opening in autumn 2016.
A campaign is planned to sell industrial plots on Völlunum. The proceeds from the sale of these plots will be used to pay down debts.
„If the plan is approved in this regard, I believe that the underlying problems in the town's operations have been brought under control. If things are managed correctly, bright times lie ahead for Hafnarfjörður. So far this year, a great deal of time has been spent reorganising the operations with the aim of reducing costs, which appears to be achievable if this plan is implemented. It is now possible to turn our attention to various other matters that have hitherto received less focus. If the plan is successful, Hafnarfjörður's debt ratio will have been brought down below the 150% stipulated by the Municipal Government Act by 2017,“ says Mayor Haraldur L. Haraldsson.
The Mayor will hold a meeting at the Town Cinema at 8 p.m. on 10 November, where he will present a proposal for the budget.