… “in just two years,” says municipal council of VRSA
The municipal council of Vila Real de Santo António has cut its total debt by €15.7 million since 2021.
The announcement came following the approval of the municipality’s financial report for 2023 last week.
Local mayor Álvaro Araújo has praised the council’s commitment to the “consolidated reduction” of its debt, stressing that the reduction of €16 million of debt “in just two years is quite representative of the effort that has been made in terms of the financial recovery of the municipality. This effort to reduce the municipality’s debt is starting to bear fruit.”
The council also says its indebtedness index – calculated by considering the debt limit relative to the total debt and used as one of several indicators assess the financial sustainability of municipalities – decreased by 80 percentage points, dropping from 356.68% to the current 277.20%.
Despite the improvements, Vila Real de Santo António’s total debt (taking into account the municipal council and municipal council Sociedade de Gestão Urbana) still amounts to a whopping €109 million.
“The absolutely astronomical debt which was inherited from previous administrations has been the biggest obstacle to the development of the municipality,” the council says in a communiqué.
“In 2021, the debt was higher than €125 million, which made it absolutely necessary to stem the financial bleeding that was happening in the municipal council,” it adds.
The local council also notes that it has been able to increase its revenue throughout the last three years from €23.4 million in 2021 to €30.5 million in 2023 “without resorting to any increase in municipal rates or taxes.”
Its delicate financial situation has also forced the council into achieving a balance between debt reduction and public investment, which has included a “set of necessary investments in the sectors of education, public space and services provided to citizens.”
“It has been a truly complex exercise, but it was possible to find a balance between those two needs,” adds Álvaro Araújo.
