Cash-strapped NA council in financial straits
By Daniel Da Costa
Stabroek News
June 12, 2003
The New Amsterdam Town Council which was declared “broke” last year in a report for the partnership between the city of Huntsville, Texas and New Amsterdam still continues to experience serious financial difficulties.
To date the council is yet to pay salaries for May, the second time this year it has been confronted with this embarrassment. Deputy Town Clerk, Cheryl John is however hopeful that salaries could be paid by Friday.
Last year the council was unable to balance its budget and as a result it was not approved. This year it has been confronted with a similar problem and to date is yet to approve its 2003 Budget.
Stabroek News understands that the problem lies in a shortfall in projected revenue of some $27 million and as a result the budget cannot be balanced. In 2001 the budget projected revenue of $107,672,325 but this was considered highly inflated since in reality it was closer to $45 million.
According to the Report only $12-18 million of the $24.4 million general rates would have been collected. Market revenues, it said, would have been less than the projected $16.7 million since the market was under construction and the majority of the 500 vendors were displaced outside of the facility.
The market which should have been completed since last February has not yet been handed over because of the council’s dissatisfaction with the quality of work executed on the floor and other sections. The market was re-constructed under the Urban Development Programme.
As a result of the delay, the council has only been earning approximately $400,000 per month from market fees compared to just over $1 million previously. The council receives a $10 million annual government subvention for infrastructure works but has been forced on occasions to use it for the payment of salaries.
Its annual tax collection has been at an average of 50% of its collectable figure. According to the April 2002 report the council’s total revenue is around $45 million including the annual subvention but its expenditure is around $68 million. The annual payroll is in the vicinity of $35.3 million or some 70% of the anticipated revenue.
The shortfall in this year’s budget has sparked much debate among councillors over how it should be balanced. Stabroek News understands that the options available to the council in attempting to balance the budget include using taxes collected so far, closing one or two departments or seeking a loan from a commercial bank.
However the 2002 report noted that the council had an overdraft of some $2.8 million. Its electricity bill was some $3 million in arrears and growing at a rate of $400,000 per month or $4.8 million annually.
Mayor Claude Henry recently acknowledged that the council was experiencing financial difficulties and was unable to provide much needed services to the town’s estimated 30,000-odd residents.
Earlier this week employees complained of the absence of water on the upper floor of the Town Hall.
Last week the council urged business persons to assist in the purchase of drugs and fuel for a fogging exercise against another mosquito invasion.
However, the response has been lukewarm and no major fogging exercise has yet been conducted even as the invasion peters out.
The Huntsville team had called on the council and the Town Clerk to “take immediate steps to bring its financial house in order to bring the budget into proper balance.” The team also recommended that “payroll expenses must be trimmed to less than $20 million, (and) revenues must be increased and efforts concentrated on the delivery of basic services.”
A source within the council told this newspaper that since the Report and Recommended Plan was submitted for the partnership of the cities nothing much has changed as the council has been unable to complete its work programmes and initiate new areas of revenue earning and/or balance its budget.
Concerns have also been raised by PPP/C councillors about accountability in light of the non-presentation of last year’s budget.
Many have also raised questions in the past over the lack of a management structure and systems and the need to involve citizens in the decision-making process and management of the town.
Meanwhile remedial work on the market has commenced and according to John, as soon as this is completed and approved by the Urban Development Programme, the facility will be handed over to the council. This long-awaited development will not only see the removal of vendors from the road shoulders along the Strand but will also provide much-needed revenue to the council.
