Globes, Yogev Sharvit 14.06.2021
Just before he was replaced as Minister of the Interior, Aryeh Deri canceled the unification of Tel Aviv and Bat Yam in 2023, which he approved in 2017. This decision, which will probably star in Mayor Zvika Brut's election campaign in the 2023 election, was made by Minister Deri after "Which considered all the considerations," including the municipality's statements that it is meeting the recovery plan to reduce the deficit of NIS 97 million within five years (actually four) - the main cause of the city's weakness and the reason for declaring the union.
This decision was made on June 7, 2021, about six months after the municipality signed the second part of the recovery plan. Anyone familiar with the world of local authorities knows that at the time of signing the convalescence agreement, Bat Yam Municipality had enough data to present the Ministry of the Interior with its revenue, expenditure and deficit forecast for 2021, a forecast required for the Ministry of the Interior to approve the recovery plan. In March 2021 this level of certainty was full and in the last three months nothing has changed. If he wanted to, Deri could have announced the cancellation three months ago.
Deri's declaration was intended to remove from him the "disgrace" of the declaration of municipal unification - a unification that was the result of a process inherited from his predecessor (Saar), a unification that he tried to reject in every way possible.
Celebrating too early
Although the timing of the announcement of the cancellation decision is entirely political, we should rejoice for the residents of Bat Yam, whose current municipal management claims it has succeeded in the impressive course of reducing a built-in deficit of NIS 97 million in four years - a year earlier than its commitment. The main reason for the decision to unite Bat Yam into Tel Aviv, the lack of resources required for it to be able to provide its residents with adequate services, is not the right reason for unification between authorities. The studies also show that there is no advantage in the field of real consolidation of agencies of this size, and contrary to the position taken by the Tel Aviv municipality in 2014, the EU will not significantly improve efficiency.
But the celebration may Bat Yam management are in place. If we return to the original reason why the EU started the evaluation process, It seems that the decision to set up the committee was based on Bat Yam's claim that it does not have enough resources to provide its residents with adequate services and that it has a built-in deficit.The committee also showed that Bat Yam maintained a balanced budget only thanks to income from the sale of real estate.
No layoffs and no reductions
Even after the convalescence agreement, Bat Yam continued to rely on one-time income - the Ministry of the Interior gives it generous grants (about NIS 30 million a year), it continues to sell assets and transfer them for purposes in the current budget (albeit to a lesser extent than in the past). Its expenses and increases its revenues, this efficiency did not prevent it from ending 2019 with a deficit of NIS 27 million.
An examination of the municipality's financial data show that between 2017 and 2019 the municipality's built-in deficit was reduced by only NIS 8.6 million, from 101.3 million to 92.7 million, so that in practice its situation did not improve at all - the municipality managed to increase its current revenues by NIS 24.1 million, but most of these were directed to an increase in expenditure on education services and a little on local services. Ultimately, most of the reduction is due to cuts in administrative and cultural expenses and a more convenient spread of debt repayment in 2018.
At a meeting in early January 2021, Bat Yam executives boasted that they managed to meet the goals of the recovery program without layoffs and without reducing the basket of services per resident - but their main pride is that they managed to maintain the same low basket of services (compared to neighborhoods) while the municipality continues to rely on external funding sources. Some of these resources will disappear in 2023, and Bat Yam residents, who will be able to re-elect a mayor, will continue to live with a low level of services, with the same lack of resources and with a slightly smaller built-in deficit.
Response: "Regular increase in revenue"
The Bat Yam municipality responded: "Bat Yam's economic plan includes increasing fixed revenues from the new business area that was launched last year, and whose policy plan was approved by the district committee two months ago. Another five years.
"This income is also expected to increase significantly by the end of the current decade, even as part of a conservative estimate of the realization of only about 50% of commercial and office rights. In this, for the first time, the city will rely on fixed income from trade and employment."
"The success in reducing the deficit (including about 20% in the built-in deficit by this year) is due to a change in the current city administration's policy of establishing commercial and employment areas across residential areas, compared to previous city managements that promoted residential projects with very small percentages of commercial uses. This city will continue to reduce the deficit and reach an economic balance while increasing investment in residents. "