Ratiboř

Municipality's final accounts for 2019

On 1 June 2020, the Municipality of Ratiboř presented the Municipality's Closing Account for 2019 to the Municipal Assembly. The financial year 2019 turned out with a very positive result. The originally planned revenue of 34 988 000 CZK was increased to a total of 54 785 944 CZK. The planned expenditure in 2019 was 33 008 000 CZK and the actual expenditure was 50 109 398 CZK. Thanks to the favourable economic situation, the 2019 budget was successfully increased. Although the forecast for 2020 was similar, we expect that the following year will not be as rich in revenue.

Municipal budget 2020

In the last issue of the Newsletter, I mentioned the decline in budgeted tax revenues. Today we have concrete numbers to work with. We had counted on municipal revenues going down, but none of us could even think about the fact that the government would begin to systematically cut funding from municipal budgets. At first, we were assured that municipal budgets would not be touched and that municipalities would be one of the instruments that would help get the economy moving. But then came a surprise in the form of a compensation bonus for self-employed workers, when this compensation was taken out of municipal budgets by a change in the law.

Change means the following
The tax income of the self-employed for the municipality of Ratiboř is on average CZK 130 000 per year. However, the compensation bonus has drained CZK 1 374 402 from our budget. This is ten times the income. Another government measure will be the so-called tax package, which will deprive the municipality of another CZK 1 million. CZK 1 million from the municipal budget. With the reduction in revenue from budgeted taxes, the total for 2020 is CZK 7 7 774 486, or 30% of the annual budget, and we do not yet know when the economy will hit rock bottom. This shortfall will reduce the budget from the planned CZK 38 million to CZK 30 million. CZK 30 million. However, it cannot be said that we will not implement or will reduce some of the planned investment measures. Neither can we, as all this year's construction work has already been contracted and must be implemented. At the same time, it would be unreasonable to restrict the planned actions because we would have to return the subsidies, and we do not want to do that either. After all, we will not refuse a subsidy of EUR 5 million for flood damage. CZK or the award from the Village of the Year for pavements in the amount of CZK 1.9 million. We need to secure our own share of this funding. We normally keep an average of CZK 7 million in our account. This is sufficient capital to carry out all the events planned during the year. However, government measures are reducing our municipal accounts and we are having to shift money intended for investment to operating costs.

I am sure you have heard our Prime Minister constantly saying that municipalities have a lot of money in their accounts and should invest it. But there is a logical explanation for that. Yes, we do hold a certain amount of money in the accounts, for a simple reason. If we carry out actions with subsidies, we must first complete the construction and usually pay for it from our own resources. We then apply for funding from the grant provider. In practice, this means that we have already had the building completed and paid for six months and we will not receive the subsidy until six months or even later. Therefore, we try to have a financial reserve to be able to pay for the planned investments and we count on the fact that the administration and payment requests are lengthy and the funding comes later. We are also hearing that there will be massive subsidies to municipalities. The question is whether we will have the funds to participate and how the conditions will be set.

The municipalities that have helped a great deal to deal with the pandemic and have themselves provided a lot of protective equipment, disinfection and dealt with an often difficult situation in operation are now being rewarded by even having their funding legally withdrawn. I am convinced that no municipal leadership deserved this. As we are members of the Association of Local Authorities of the Czech Republic, I also joined the mayors' strike action. Thanks to the efforts of this association and its chairman, Stanislav Polcak, we managed to agree on compensation for the municipalities in the amount of CZK 1 200 per citizen. However, it has not yet been determined how this money will reach the municipalities. For our municipality, the amount is CZK 2 200 000. This is the amount of the loss that our budget has suffered as a result of the compensation bonus for self-employed workers and the tax package. In addition to this funding, we must look for other sources. We are preparing the sale of two building plots owned by the municipality, reviewing operating costs and trying to reduce them. It's exactly the same as at the beginning of the pandemic. No one helped us then and we can hardly expect help now. That is why we have to manage the situation on our own.

Martin Žabčík
Mayor