How Oberursel plans to reduce its deficit in the coming years

At the town council meeting last week the town’s treasurer (Stadtkämmerer) , Thorsten Schorr, held what is best described as his budget speech (“Haushaltsrede”) for the coming year. Technically the budget (“Haushalt”) is not actually decided yet and will be discussed by the finance committee in their next sitting so that the council can vote on it in November, but the speech outlined where costs are increasing, where cuts will need to be made, and how the town intends to reduce their deficit by 2018.

The full version of the speech and the draft version of the budget will be available as PDF downloads on the town’s website this week, but obviously in German.

So here is a summary of the main points in English.

The speech started with the first potential saving – the members of the council and the executive will only receive printed copies of the 1060 page budget if they actually request it, otherwise they too will be receiving a PDF version. This should not be a problem, as they have all been issued with iPads, and with other official documents moving to this form as well the investment costs for the iPads will apparently be more than outweighed by the saving in printing costs.

Then came the bad news. If the income and expenditure continue as they are now then there will be a deficit of between 11 and 12 million Euro per year, although the town had a balanced budget only three years ago.

But things change. Costs increase. The personnel costs, for example, have risen by 4.2 million Euro. New and changing laws take their toll, such as providing more childcare places at a cost of €250,000, and the contribution to running the U-Bahn U3 will rise next year by €158,000. In total, costs will increase next year by 9 million Euro.

Since reducing costs over which the town has little or no control is difficult, the money has to come from somewhere else, which is why a savings plan (“Haushaltssicherungskonzept”) needs to be developed.

To do this, a working group has been formed where each of the parliamentary parties are represented to see where there is a consensus on where savings can be made.

For example, although it is not intended to make anyone redundant, the town will consider each case of an employee retiring or leaving of their own accord to decide whether or not they need to be replaced.

They may also decided to use less resources from the town’s own service organisation (BSO).

And then there are the tax increases.

Agricultural land owners’ tax (“Grundsteuer A”) is set to increase by 50% , and dog tax by 20%. However these taxes are not expected to hit the average family too hard if at all.

However from 2014 the other land owners’ tax that house owners pay (“Grundsteuer B”) will increase every two years until it is 50% higher than at present.

A new fee called the “Straßenbeitragssatzung” is also being planned, which basically means that everone pays a small fee each year for the upkeep of their street, rather than being landed with a larger bill when the road needs work done on it.

Even child care fees may start rising again from 2016 if necessary.

Despite the necessary savings, the town still intends to invest just over 17 million Euro in 2013, with the largest amount (€7.2million) being spent on the new swimming pool. Other investments will be made in equipment for the fire brigade, replacing playground equipment, traffic lights, new LED street lights, and extending the car park at the Taunus Information Centre.

The target is to reduce the deficit each year and have a balanced budget by 2018, after which the short-term loans should be repaid. Those short-term loans are needed each year until then to cover all of the costs. Ironically, the town is still paying back long-term loans from previous years. These alone cost 4 million Euro each year – half of which is paying off the loan, and just under half is pure interest.

Residents will have a chance to discuss the 2013 budget at a “Bürgerversammlung” in the town hall on Wednesday, 31st October, 2012 at 8pm.

About Graham Tappenden

Graham Tappenden is a British ex-pat who first came to Oberursel in 1993 and returned with his family to live there in 2003. He has been writing for AllThingsGerman.net since 2006. When not writing blog posts or freelancing for the Oberurseler Woche he works as a self-employed IT consultant solving computer problems and designing websites. In 2016 he gained German citizenship.

Comments

  1. The draft budget can now be downloaded from the town’s website:

    http://www.oberursel.de/fileadmin/inhalte/dokumente/10-103/Entwurf-2013-f.pdf

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