Kempten - The reserve cushion is melting, revenues are falling, savings potential is sought, high investments are pending.
Kempten is tightening his belt.
New debt is on the way by 2023 at the latest. However, the city council still has to discuss the necessary further development of the strategic goal of “strengthening financial strength and administrative efficiency” and thus the structuring of debt. A second specialty is the renewed budget consolidation commissioned by Mayor Thomas Kiechle, which is faced with the major challenges in the areas of education, digitization, mobility, housing and, in particular, climate protection.
"We can only cope with these tasks if we succeed in not only making the necessary funds available, but also determining when they are used", says city treasurer Matthias Haugg.
He warned against tackling too many tasks at the same time, as this “cannot be financed” and it also “restricts future financial leeway through high repayments and possibly interest expenses”.
The piggy bank is slaughtered
The surplus in the administrative budget, which is necessary to finance measures in the property budget, amounts to a meager 3.6 million euros in the 2022 financial year. "These additions are far too few for a budget of over a quarter of a billion euros", Haugg made it clear that the additions would also be too low in the following years. “We cannot even come close to financing our investments in the asset budget.” As in previous years, money must therefore be withdrawn from the reserves. For 2022 there is talk of 11.3 million euros, in 2023 of 8.2 million euros. Then the "savings book" is looted. This means that loans will have to be taken out in 2023 to implement construction measures.
In order to solve the problem of low transfers from the administrative budget to the asset budget, after the budget consolidation of 2016, which Kiechle says has been a good experience, another one will be inevitable.
The aim of the consolidation should be an improvement of around three to four million euros, so that the allocation would be at least around seven million euros.
City council wants to be involved
As legal adviser Wolfgang Klaus announced, the administration will first develop proposals for budget consolidation, whereby the parliamentary groups are free to bring their own thoughts. Andreas Kibler (Free Voters) is not only concerned with increasing income, but also with cutting expenses and administrative efficiency. He asked for not just a final report to be presented to the panel, but for them to be involved in the process. Above all, Kibler would like to avoid misunderstandings, such as from press reports in which statements by the mayor gave the impression that it was already clear "what is mandatory and what is optional". The city council decides on this. As Kiechle said, he only wanted to "sensitize" city councilors to the issues.
Consolidation solely through income, as before, "will not work this time", said Alexander Hold (Free Voters), who saw external support as a good remedy for "operational blindness".
He also did not want to imagine that the mayor could have spoken to the media about the triple sports hall as a freestyle, he suspected a misunderstanding.
In his opinion, the additional burden on the administrative budget, e.g. through the out-of-town financing of a city library, can only be absorbed after a successful budget consolidation.
Government of Swabia has to approve budget
As Haugg warned, borrowing must not go wild either. “Debts must be structured”, the annual new debt must not exceed 17 million euros and the total debt in the financing period up to the end of 2025 must not exceed 60 million euros. The loans are to be repaid over a period of 20 years.
In the past, the city budget could be put into effect virtually without the approval of the Swabian government by the city council.
According to Haugg, that is now changing.
The upcoming households are subject to approval.
During the so-called “budget-free” period, only measures that have already been started may be tackled in the asset budget.
New projects have to wait until the government of Swabia has given written budget approval and that could "take months".
Exploding costs
Hold criticized the considerable cost increases in construction projects, which could not be "explained by construction costs" alone.
The costs for the Carl-von-Linde-Gymnasium in 2018 were estimated at eleven million euros, in 2019 already at 17 million euros and now at 29 million euros.
It looks no different with the village renewal Heiligkreuz, in which the costs jumped from 2.6 million euros in 2018 to 23.5 million euros in 2022.
The triple sports hall, which should be completed in 2020, has seen an increase in costs since 2017 of 6.9 million euros to 27 million euros in 2022.
"If we do Heiligkreuz and the triple sports hall after 2025, it may cost three times as much," warned Hold against simply postponing too many construction projects.
According to Mayor Kiechle, an “abundance of topics” led to delays and price increases, for example in Heiligkreuz, and for the triple sports hall, the decision was made “consciously for the most beautiful”, but also “most expensive” planning.
You can also read how the budget deliberations started last year: the start of the budget deliberations