Silves council has approved a €35.9 million budget for 2014 without the protracted quibbling that has seen previous budget approvals pushed well into the year in question.
The budget for 2013 was €37 million, some €10 million lower than in 2012 making the 2014 budget the lowest for Silves in the last ten years.
The council said the cut in central government funding of €416,000 has not exactly helped but the major problem is the Viga d’Ouro fiasco which is to cost the ratepayer €6 million in 2014 which can not be spread over many years.
The Viga D'Ouro lawsuit, which has been through court to the council's detriment, is based on events between 2004 and 2006 when Isabel Soares was mayor and when the municipality gave illegal contracts to the Viga D’Ouro company without going through any sort of tendering process.
1,220 payments were made to Vigo D'Ouro Constuções Lda each for €4,987.98 or less to avoid the legal tendering process.
The debt then was factored to three banks which later brought action in court for non payment. Costs and interest ended up costing the ratepayers an additional €1.28 million plus a highly suspicious €601,000 paid to one firm of lawyers to run and advise on the contract and other matters between 2006 and 2013.
"In the absence of validated payment agreements by the Court of Auditors, the volume of debt is to be concentrated totally in 2014, it can not be spread over the next few years. This is the legal reason for the failure to submit a budget for €30-€31 million, but this budget still is the lowest for 10 years” reads the council statement.
According to the municipality its capital investment expenditure next year is to be a healthy €7.5 million - but don’t be fooled as €5.2 million of this goes to the banks that bought the Viga D’Ouro debt.
"We recognize that € 2.3 million is a very small amount that limits investment in the municipality, higher levels of wellbeing of the people and the pace of development in the municipality of Silves," commented the council.
The debt burden of the council is uncomfortable when compared to its income with short-term liabilities of €8.5 million and medium to long-term liabilities of €12.5 million, which brings the total liability of this rural council to €21 million.
Rosa Palma did well to get this budget approved without the usual protracted bickering between parties but the legacy left by Isabel Soares has crippled the finances for the next twelve months at least.
Palma, CDU, has no majority in the executive nor in the municipal assembly but still she saw the proposed budget approved first time around with votes in favour from the CDU and BE, and abstentions from the PS and PSD.
Part of the tiny investment fund will be used to repair equipment, machinery and vehicles which are in a deplorable state, or obsolete, especially those that collect urban solid waste and those used for municipal works.
__________
For more information on Viga d'Ouro, click on - http://www.algarvedailynews.com/news/508-silves-new-mayor-lifts-the-lid-on-the-council-s-finances
