For those, like me, who were not at the Council Meeting to witness the attack on the previous council, Aurelio Murcia has outlined the financial situation the new council faced when they took over. You can read the whole article in today’s Informacion newspaper.
In the article the councillor talks about bills for work that was not budgeted for being left in drawers, about council workers who had not been paid for months, about people who were paid Social Security by the council*, workers who were paid but did not have contracts, even two societies that received money but were not included in the council’s accounts.
According to Aplem Consulting SL, there was no system for accounting in Bigastro, even the leaders of the Socialist party had no idea of the level of debt the town faced.
The bills which total 9.45 million Euros range from one due to HV Ingenerios for 1 cent to one of 1.86 million Euros due to D-6 UTE General. Because of the inept way that the previous council settled its bills, 356,000 Euros is now being claimed in interest, in charges for returned cheques and promissory notes that were not paid on time to suppliers.
Sr Murcia goes on to say that the previous council even managed to pay 96,592 Euros for bills that creditors did not claim as debts. However, in the meantime, they owed 924,000 Euros to the Treasury for Social Security and 734,000 Euros in tax. As a result, Bigastro is not receiving its monthly quota from Central Government.
Council workers are owed 354,000 Euros added to which 3.2 million Euros is being claimed by the courts for unpaid works and services. There are ten judicial proceedings pending against Bigastro.
The largest claim will be for the 35,000 square metres of land sold to Idearco to build an hotel, an apartment complex and golf practice ranges at La Predrera. Since it was deemed ilegal to build on that land, Aurelio Murcia says that will be an impossible case for the council to win.
The total of debt on paper is around 17.2 million Euros. When you add on the further debt that could ensue from the court cases etc, the figure could be as high as 35 million Euros.
Knowing the level of debt is one thing, what we really need to know is how did this debt come about. The previous council must have known how much income they would receive year on year and so how much they had to in their budget to spend.
Two questions I’d like to ask:
- Presumably the town was solvent at one point, when and why did things change?
- Why did the Socialist Council embark upon expenditure plans that far exceeded their income?