Budva Municipality had to take out a loan to pay salaries: Despite debt, finances are stable

The Municipality of Budva has taken out a loan of three and a half million euros to resolve the current financial situation it found itself in after last week, due to a final verdict of the Higher Court, the public bailiff blocked its account for 5,6 million euros, the estimated amount of compensation to the heirs of the Rafailović family, for the nationalization of land on Cape Zavala six decades ago.

"The municipality has taken out a loan in the total amount of 3,5 million euros, with only 2,2 million euros of the total approved funds being withdrawn. These funds were directed towards settling obligations to companies as soon as possible, thus ensuring an orderly payment schedule and preserving the financial stability of the system," the office of the mayor of the municipality told "Vijesti". Nikola Jovanović.

The Budva Municipality managed to unblock the account on Tuesday, having previously taken out a short-term loan of 2.2 million euros from three municipal companies.

Jovanović, citing the legal authority that allows him to do so, concluded agreements with the directors of municipal companies for loans - 1,1 million euros from Parking Servis, 400 thousand euros from Vodovod and 715 thousand euros from Mediteran Reklama. Jovanović's administration pledged to repay the loan by May 17th.

After the loan, local government workers were paid their April salaries. All of this was followed by a fierce political conflict in which the opposition (Democrats, New Serbian Democracy, Democratic People's Party, Movement for the City) claimed that the city government had misappropriated 20 million euros carried over from last year and called on the prosecutor's office to investigate the administration's actions and how and on what the money was spent.

On the other hand, the government (political group "Budva our city", European Union, Democratic Party of Socialists) claimed that finances were stable, accusing the state of being the one that should have paid millions in compensation to the locals, because the land in Zavala was nationalized by the state of Montenegro, to which the disputed plots are still registered in the cadastre.

However, in order to truly stabilize finances and repay the short-term loan, the Municipality had to resort to credit. This is the first time in a decade that the Municipality of Budva has knocked on the door of a bank and asked for help in solving its financial challenges.

Jovanović's office claims that they already have 1,5 million euros in their account and that the inflows are stable and good, and that they can meet all regular obligations.

"It is important to emphasize that the Municipality currently has no problems with current liquidity. Thanks to the stable inflow of own revenues, by the end of last week an inflow of 1,5 million euros was recorded in the account, which further confirms the solvency and sustainability of budget operations," the cabinet emphasizes.

They point out that the remaining funds from the total approved credit arrangement were not used.

"This demonstrates responsible management of public finances and rational use of credit capacities. As we have previously announced, the Municipality regularly services its obligations, maintains a stable level of budget liquidity and has no reason to worry when it comes to financial operations and the fulfillment of obligations," the local government emphasizes.

As "Vijesti" was told in the office of the first man of Budva, the loan repayment deadline is in the current budget year, that is, by December 31st.

"This is a short-term debt for which the Mayor is responsible, and does not require the consent of the Ministry of Finance or the Municipal Assembly," the cabinet explained.

However, the Municipality of Budva faces new financial challenges that it has committed to, primarily the fact that it will pay the organizers one million euros from the city treasury for holding the "Sea Dance" music festival on Bečići Beach at the end of August this year.

While the Municipality of Ulcinj is ready to allocate 300 thousand euros for EXIT, the Municipality of Budva immediately announced that they will allocate three times more for their festival.

Also, based on the parliamentary decision, the Municipality of Budva has committed to paying 1,7 million euros to the company "Lovćen film" to take over the management of the "Cadmus cineplex" cinema in the "TQ Plaza" complex.

The total amount, as previously reported by "Vijesti", refers to 1.385.000 euros in compensation for the initial investment, 75.000 euros in costs for the functional maintenance of the cinema, and 255.000 euros in lawsuits, while the two parties waive all further lawsuits and previous disputes.

It is planned that after the conclusion of the agreement, 260 thousand euros will be paid within a period of 30 days, and installments of 400 thousand euros each - the first on November 30, the second on December 30 of this year, while the remaining two next year on January 30 and February 28.

The Municipality of Budva also expects to receive a one million euro donation from the Metropolitanate of Montenegro and the Littoral for the construction of the largest Orthodox church on our coast - the Cathedral Church of Saint Mark on the property of the Church of Saint Petka on the Budva bypass. Once the Metropolitanate has completed the main project, and the Municipality issued it with urban planning and technical conditions a month ago, a million euros will be paid from the city treasury to the church.

In addition, the Municipality must also provide money for the holding of the Theatre City festival.

Of course, more than 700 employees, both in the administration, local services, cultural institutions, and the local media, expect to receive their salaries on the first of every month, which costs the citizens of Budva almost one and a half million euros per month.