City Council decides on further debt reduction in the 2017 financial year
At its meeting today, Chemnitz City Council decided on a further debt reduction. In addition to the special repayment of 10 million euros already included in the 2017/2018 budget, a further 13 million euros will be repaid early.
The planned expenditure can continue to be fully met by current income and the existing liquidity, meaning that the originally planned borrowing of 13 million euros in new loans to repay existing loans is no longer necessary.
By refraining from taking out new loans or repaying them early, the planned liquidity in the municipal budget is reduced accordingly. The city is thus reacting to developments on the financial market and the fact that more and more banks are limiting the amount of municipal cash holdings or charging penalty interest on higher deposits. At the same time, debt reduction is being consistently pursued, thus further reducing the burden on future generations.
Treasurer Sven Schulze: "Since 2006, more than 130 million euros in municipal debt has been reduced. With the decision not to borrow, the debt per inhabitant can be reduced from 823 euros (as at 31 December 2016) to an estimated 631 euros at the end of the year. In addition, the risk of penalty interest on our existing cash holdings will be reduced. In this way, we are creating a solid foundation for future municipal budgets."