The advancement of 3`2 million in loan amortization payments will save about one million of interest
The City Council of Xàbia has approved today in the Treasury commission an advance in the amortization of loans worth 3 million euros. Money with which one of the credit lines to be returned by the city council over 2 years will be canceled, in addition to reducing the amount of another.
Antonio Miragall, mayor of the Treasury, explained that with this operation the local administration will save about one million euros in interest. Money that can be used for new investments and that will reduce the total municipal debt to a third since the arrival of José Chulvi's team to the local government. At that time, loans amounting to 42 million euros were inherited, of which 27 have already been paid, at a rate of about 4 million a year plus the extra for the current year.
The councilor has highlighted the contradiction that implies that, despite this liquidity and financial health, the municipality is forced to approve a financial economic plan, by failing to comply with one of the precepts of the spending rule set by the central government in the Law of Budgetary Stability, a regulation that has qualified as "absurdity that has the city councils tied".
Despite the fact that the City Council continues to comply with the budgetary balance and paying suppliers in less than the marked time, this year following the completion of a major project started years ago, the expenditure rule has been breached. This supposes to put ceiling to the section of expenses in the budget in spite of which the forecast of income raises. The situation prevents the growth of budgets and that the sanitized town halls can become dynamizers of the local economy.
The law marks that a City can only spend the same as the previous year, something that Xàbia has surpassed when finishing the work of the new municipal building and having to pay the end of work. Although Xàbia had sufficient liquidity for this extra, the government penalizes this situation. Miragall has stressed that, "we have had to approve a financial economic plan in which we have worked hard. to avoid easy solutions as it would have been to raise taxes. We had to set strategies that go in the line of cost containment".
The mayor, José Chulvi, has taken advantage of this situation to ask the central government once again to repeal the Budget Stability Law and has commented that, “anyone in your house knows that, if you spend less than what you enter, you are doing things well, so this type of laws that only take into account the forms and not in the background are a burden for the municipalities that in the great Most of us comply".