The combined deficits of the country's 50 largest local authorities totaled NIS 1.3 billion in 2003, a dramatic increase of some 77 percent on the preceding year, according to a survey released by Dun & Bradstreet this week.
The survey showed that of these 50 authorities, only six managed to finish the year with a surplus: Ramat Hasharon, Carmiel, Nesher, Holon, Ra'anana and Tel Aviv. Nes Tziona achieved the remarkable feat of finishing the year with balanced books. It was the sole authority to manage this.
Keeping one's books in order does not necessarily mean making the most severe cutbacks or exercising the most parsimony. Tel Aviv municipal workers, for example, are the highest paid of all local authority employees. The average wage cost of a Tel Aviv municipal worker in 2003 reached NIS 12,300 a month, followed by workers in Rishon Letzion, with wage costs of NIS 12,000. Givatayim came third (NIS 11,500) and then Ramat Hasharon (NIS 11,000).
The lowest paid municipal workers were in Kiryat Bialik, with average monthly wage costs of NIS 7,800; Nahariya, NIS 8,000; Nazareth Illit, NIS 8,200; and Dimona and Kiryat Yam, at NIS 8,300.
Efficiency's the word
The local authorities were in the headlines for much of 2004, for having sunk to such financial straits that many were unable to pay their employees' salaries. The Finance Ministry insisted that in return for state assistance, the deficit-laden councils must submit recovery plans and implement layoffs.
Dun & Bradstreet Israel CEO Reuven Kuvent pointed that some local governments clearly had other ideas. For example, he noted that the Kiryat Yam municipality increased its workforce by some 18 percent in 2003, despite running a deficit of NIS 34 million, equivalent to 23.5 percent of its annual budget.
Similar stories were told of other councils with deficits; Hod Hasharon, which increased staff by 8.8 percent; Petah Tikva with 6.4 percent more staff; Bet Shemesh, which added 6 percent more workers; and Afula added 4.2 percent more workers this year.
Cities which cut their workforce included Kiryat Ono, which reduced staff by 7.2 percent, Safed and Kiryat Gat (down 5.5 percent), Kiryat Shmona (5.4 percent) and Umm al-Fahm (4.9 percent).
Umm al-Fahm was outstanding in another aspect as well. It had the lowest rate of collecting municipal property taxes (arnona). Measuring collection as a percentage of debts owed to outside parties (banks, suppliers), Umm al-Fahm collected only 9.6 percent of its arnona. Nazareth came next, collecting just 12.4 percent, and third came Ofakim with a collection rate of 21.1 percent.
The Dun & Bradstreet survey also ranked local authorities in terms of their businesses environment. That is, where a business was more likely to succeed, and where was it more likely to fail. Eilat came bottom of this list, where some 31.1 percent of businesses were in danger of collapse during 2003.
According to Dun & Bradstreet, this helps explain why Eilat maintains a high deficit. On the other hand, Ramat Gan was the surest place to do business, with only 9.7 percent of businesses there in danger of closure.
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