The municipality increases overdraft facility with 10 million – Lofotposten

Moskenes struggling with liquidity. Like other municipalities with weak economy, Moskenes used by unused borrowing funds to pay bills instead of taking up credit facilities. Or put another way: The municipality has borrowed from its own building project to pay bills and salaries.
Last year, the control group and the council that the practice was changed. The municipal council approved a kassakredittlån five million municipality began using in February this year.

See also: Municipal must downsize

Not enough

Now fear alderman that the frame does not hold. In the municipal board meeting Wednesday he asks politicians raise the frame to 15 million. Finance Lena-Britt Johansen shows in his report to overdraft facility is already in use, and that investments in 2015 will require borrow funds.
– In addition, allowance is made for salaries, while payable withholding and installment payments. To not end up in a situation where we fail to pay our obligations, we must increase the cash credit, writes Johansen and Sperstad in legal study.

Moskenes second highest debt

According to OAG ranking of debt in Norwegian municipalities located Moskenes second. Debt costs each citizen 126,102. The debt amounts to 140.2 percent of revenues, whereas the recommendation is 70 percent.

Read the case here: Lofoten Municipality in Norway top in debt

In January and February, the municipality has paid 1 2 million more in interest repayments than the corresponding period last year.
– It is related with the refinancing of loans. The increase affects liquidity, says Sperstad.
Moskenes is one of four municipalities in Lofoten County Department Robeks registry, and probably the longest way out. The accumulated deficit of approximately 16 million. Robeks municipalities are subject to financial control from the County, and must have, inter alia approval to raise new loans.
– We have received exposure. The municipality will not be able to cover this within two years. We have created a binding plan for repayment, but we have to spend eight years to cover the deficit. To pay down the debt with two million annually is hard enough, says Sperstad.

Read more about: economic policies policy Municipality Flakstad and Moskenes