Although the members of the parliamentary Committee on Home Affairs are optimistic that it is possible in the next few weeks to complete the elaboration of the three bills that constitute the reform in the local self-government, so that in February the plenary session of the Parliament will be called to vote. to postpone and leave the issue to be considered at a later stage, possibly after the parliamentary and municipal / community elections, are many.
There are still objections from some parties to important provisions of the bills and new additions and subtractions may follow. It should be noted that the Ministry of Interior and the government in general are said to maintain disagreements over amendments made by MPs on sensitive points of the bills (including the article on the merging of municipalities and communities) and the possibility should not be ruled out that the President of the Republic may refuse. end the signing of laws that will oppose the basic strategic choices of the government regarding the local self-government, even if the bills are finally approved before the elections.
It also seems that the provisions of the bill on municipalities regarding the financial management of the new municipalities and in particular the preparation, approval and implementation of the annual budget ensure a broad consensus and the possibility will not change in the near future.
In the following text, we present the procedure for approving the budgets of the new municipalities provided by the bill.
They approve, but …
According to Article 90 of the bill amending the existing law on municipalities, the annual budget of each municipality must be balanced and submitted by October 31 of the previous year, for approval by the municipal council and the Minister of Interior, in accordance with opinion of the Minister of Finance.
Because in the previous consultations there were objections from local government officials for the right of the two ministers to approve or not, in their entirety, the budgets of the municipalities, the Ministry of Foreign Affairs added the following paragraph to the bill, which seems to cover most concerns which were expressed:
“The approval of the budget by the Minister of Interior, with the consent of the Minister of Finance, is an act by which it is established EXCLUSIVELY (ie our own funds) that the budget is balanced or in surplus and, if it is found. that-
(a) the expenditure or revenue imposed by law is not included in the budget;
(b) income or expenses not provided for by law are included;
(c) the amount of revenue unjustifiably exceeds the performance of the previous financial year;
(d) the amount of salary expenditure for all types of staff serving in the municipality exceeds the limit of forty percent (40%) of the total of all types of expenditures of the municipality, which with the approval of the Minister of Interior and the Minister of Finance may be increased up to forty five (45%) within a transitional period lasting five (5) years from the date of entry into force of this law, with the possibility of extending this transitional stage which does not exceed five (5) years in total, the Minister of Interior calls the municipal council to properly review the budget and resubmit it within fifteen (15) days “.
Immediately afterwards, it is added to Article 90 that “it is understood that the control of the budgets of the municipalities, at the stage of their approval, can not be extended beyond the determination of the above elements and can not be a feasibility control on the distribution of municipal expenditures. ». That is, the two co-responsible ministers cannot request the deletion of specific funds because they disagree, for example, with a project or policy that the relevant municipality wants to finance.
The structure of the budget
Article 91 of the bill stipulates that the annual budget of the municipality is prepared by the Management Committee of the municipality and, after approval by the municipal council, is submitted for approval to the Minister of Interior, subject to the following provisions:
– The budget of each new municipality is uniform,
– each year, the municipal council, by its decision, determines the maximum amount of the next year's expenditure budget of each of the municipal districts and, to ensure this, each new municipality, by decision of its council, allocates the available resources, other than these relating to its operating costs, for the execution of projects of the municipal districts in proportion to their population and the needs that arise from time to time,
– the relevant Department Committee prepares a preliminary draft budget of the municipal district for the following financial year and the budget may not exceed the maximum amount determined in accordance with the provisions of paragraph (b) and this draft is accompanied by a statement of reasons, which includes a justification for each expenditure and is sent to the board in a timely manner,
– the preliminary draft budget of expenditures of the municipal districts, as it is finally formed, is included in the preliminary draft budget of the municipality and the budget of the municipality includes special funds for each municipal district.
Exceeding funds up to 25%
Of interest is a part of Article 91 (1), which allows the appropriations approved by the budget to be exceeded by up to 25%. The following are specifically mentioned:
“It is understood that the municipal council of each municipality may, without any further approval, spend each year an amount not exceeding twenty-five percent (25%) in addition to any item provided and approved in the municipality's expenditure budget, provided that the additional amount shall be saved by the Board from any other funds provided for in the same budget. “
In the event that the annual budget of any municipality has not been approved by the Minister of the Interior by the beginning of the financial year to which it relates, the Minister may, by decree, authorize the implementation by the municipal fund of any (1) month at a time and in any case the two (2) months in total (s.s. in the form of twelfths), if it deems it necessary for the continuation of the services provided in the budget, until the end of this period.
Special distribution of government revenues
Article 92 provides that the revenue budget of each municipality includes the registration fees of private and public use vehicles, which are collected by the Republic in accordance with the provisions of the Law on Motor Vehicles and Traffic, on behalf of and on behalf of the municipalities.
The Council of Ministers, in case of a substantial reduction of the above revenues, may provide (additional) state sponsorship to the municipalities.
The distribution of the above revenues to the municipalities is carried out after consultation with the Union of Municipalities of Cyprus and the Minister of Interior and this decision takes into account demographic, economic, social, administrative and environmental criteria.
The addition of this paragraph was important for the municipalities: “The legal transfer of new responsibilities from the public service to the municipalities is carried out after the preparation of a relevant economic and technical study and relevant consultation with the Union of Cyprus Municipalities and any additional costs that arise for them. municipalities is covered by an equal transfer of resources “.