Speech OB 13.12.2006

on taking office and presenting the draft budget for 2007 at the City Council meeting on 13 December 2006

The spoken word counts!

It is a good tradition for a newly elected Lord Mayor to make fundamental statements on the status of what has been achieved and how the city should continue to develop on the occasion of his or her inauguration. As my official inauguration has been delayed for the reasons you know, I am taking today's presentation of the budget as an opportunity to make some fundamental statements. I will focus on ten points.

1) Thanks for what we have achieved

Anyone who gets involved with this city can see and feel it everywhere:

• The last 16 years have demanded a lot from the people here - and they have achieved great things with their own strength.
• Today, Chemnitz is once again a modern business centre and the economy is the driving force behind our traditional industrial city.
• As a city of science with its university and numerous non-university research institutions, Chemnitz is an intellectual powerhouse for the future of the entire region.
• Modern social facilities for all generations, good day-care centres and schools, art, culture and sport, a lively city centre, good residential areas and efficient local transport - these are the lifelines of this city.

The fact that we can say this today is anything but self-evident.

Until the mid-1990s, it was not clear whether Chemnitz would succeed in getting back on its feet after its industrial and economic decline. Today, in 2006, this is no longer a question. Our path, our resurgence, has been recognised throughout Germany.

Former Minister President Prof Biedenkopf stated: "Chemnitz ... is developing enormously, I would never have thought that possible."

And the FAZ rounds off the external view of 2006 with the following description:

"Anyone in Saxony looking for the successes of the reconstruction of the East usually looks to Leipzig or Dresden. But Chemnitz has a much more impressive development behind it. Since the turn of the millennium, Chemnitz has been one of the fastest-growing municipalities in Germany"

Chemnitz has proven it: Sustainable change for the better is possible if you are determined and work for it.

That is why I would like to start my term of office by thanking all those who have supported and helped to shape this successful transformation over the past few years.

My thanks go to you, the members of the City Council - both current and retired - and above all to my predecessor Dr Peter Seifert.

Together with the city council, he served his city with all the strength of his personality and achieved a great deal!

Anyone who recalls the situation in 1993 and looks at Chemnitz today - despite all the problems we still have, of course - will have an idea of the scale of the achievement that has been accomplished in the last ten years or so.

Dr Peter Seifert, the city councillors and the many people who have contributed to this structural change in Chemnitz have set high standards.

That is a good thing - for us, for our city and for the people who live here. My thanks also go to the mayors, the administrative staff, the companies and institutions and the citizens of Chemnitz, who have helped to transform their city with determination and vigour.

I see my election as Lord Mayor as a mandate to continue on this path.

However, I also see my election as a mandate to think of all those who have so far had no opportunity to participate in the development of our city without major restrictions, e.g. through unemployment. What is feasible must be done for these people to ensure that they can participate in social life.

And I see my election as an obligation to make the city strong so that it can overcome new challenges and shape its future.

What are the key challenges involved?

• It's about actively facing up to the challenges of demographic change. Scientific forecasts currently predict a population decline of up to 15 % for Chemnitz by 2020.
• The aim is to help secure the skilled labour requirements identified for the Chemnitz region and to use them as an opportunity.
• Over the next few years, we need to set the right course to ensure that Chemnitz can survive despite the expiry of the solidarity pact in 2019.
• It is about ensuring that Chemnitz is well positioned as Saxony's second smallest local authority after the administrative and functional reform.
• And it is also about Chemnitz finding its place in the new Europe together with the entire region.

2) Chemnitz - a city of business

Chemnitz is an honest city that shows part of its history, with fractures and yet full of robust vitality. In recent years, we have become particularly aware of what characterises Chemnitz, what distinguishes us Chemnitz residents: The courage to try something new is more pronounced here than anywhere else.

It is no coincidence that Chemnitz today is a city of mechanical and vehicle engineering, automation and microsystems technology and also a centre of thought and production for the textile industry. Chemnitz has long been a city of engineers and technicians. They characterise the spirit and mentality of our city.

A well-educated, motivated population and a spirit of invention and openness to new ideas are the foundations of our successful development.

The attractive location in the centre of Europe and at the interface to the new EU member states is a great advantage.
Today, Chemnitz can point to remarkable structural data:

• The sales volume of the Chemnitz manufacturing industry for 2006 is so far only just below the record year of 2005.
• Chemnitz's mechanical engineering companies have an excellent reputation throughout the world and their export quota has risen to almost 50 %.
• Trade tax - an important indicator of economic development and our major "own" source of income - has almost doubled since 2003 alone.

Without any financial support from the Free State of Saxony that is even remotely comparable - Leipzig and Dresden have received 4 to 6 times more funding than Chemnitz in the last eight years - our city now has a promising SME structure and active, strong craft businesses.

We have every right to be proud of this.

This economic success is not only the prerequisite for maintaining and expanding employment. It is also the prerequisite for ensuring that we can continue to build Chemnitz well.

Because we all know that: When the economic engine is running, the city also makes good progress. With this economic engine, we have good prerequisites for our city to stand confidently and securely on its own two feet in 2019 without solidarity pact funds.

At the same time, we must realise that competition between regions will not stop at our city. We must face this challenge with courage and determination.

I want Chemnitz to establish itself permanently and confidently as one of the economically successful regions in Europe and to assert itself in this competition as an economically strong city with a high quality of life.
It has long been a virtue of Chemnitz's citizens not to rest on their laurels. And that is exactly what we should continue to do, honourable city councillors.

One focus of my work must and will therefore be economic development. This includes ensuring that companies based in Chemnitz or intending to come to Chemnitz have a reliable point of contact in the Lord Mayor when it comes to resolving problems.

This includes providing attractive commercial sites and the necessary infrastructure. Projects such as the Paul-Gruner-Straße industrial and commercial estate or the TechnoPark are not just investments in buildings, roads and concrete, but above all they are investments in modern and new jobs - and therefore in the future of the city.

Despite the successful structural change taking place in our city, we have an unemployment rate of 14.6 %.

More jobs and fewer unemployed people remain a key objective for Chemnitz and the region, because every unemployed person is one and one too many.

Unemployment is not a personal fault. That is why I do not want anyone in this city to fall out of our community because they are in a difficult economic situation. Anyone who needs our help must of course receive our help.

For example, anyone who needs support in order to have a chance on the labour market again must receive targeted support from the employment agency. There is still a lot to be done to ensure that this entitlement becomes part of everyday practice.

And for all those who really have no chance on the primary labour market, we need new forms of work opportunities. Because I want all people in this city to experience that they are needed, that they can achieve something and that they belong.

Our goal must be to ensure that no young person in Chemnitz starts their career without a qualified school-leaving certificate and a qualified apprenticeship.

I would like us to use the resources available from the European Structural Funds in the new funding period to create new prospects through qualification programmes.

The emerging need for skilled labour underlines the necessity of this and provides orientation.

The positive development of many companies in Chemnitz and the region and the demographic situation will present us with a new challenge in the future that was hardly imaginable just a few years ago. We need skilled labour, especially in the growth sectors of electrical engineering, mechanical engineering and metalworking.

The fact that our companies are showing a need for skilled labour for the coming years is a good sign of vitality and confidence in the future. However, we are also in competition here: anyone with a proper engineering degree from a Saxon university or university of applied sciences is not only in demand here at home, but also throughout Europe.

In the future, qualified young talent will be one of the key location factors without which our competitiveness and successful economic development will be jeopardised. For this reason, and above all against the background of the demographic development in Chemnitz, I have also made this topic one of my personal tasks.

In November, a working committee constituted by me met for the first time, consisting of representatives of the student council, the district parents' council and the regional education authority, the Chamber of Industry and Commerce and the Chamber of Crafts, the Employment Agency, the CWE, the education workshop and the school-business working group.

Our common goal is to achieve timely and qualified career and study guidance for our pupils and to offer even more practical experience in companies than before.

Various measures have been agreed for this purpose. These range from programmes that are better tailored to young people, to even stronger links between schools and local companies, to greater involvement and further training of teachers. I am counting on the support of all partners here.

The need for skilled labour is also a great opportunity to keep our young people in the region and to bring others back or to us.

In order to have not only a strong tradition and a dynamic present, but also a sustainable future as a place of work, which Chemnitz has been for centuries, Chemnitz must also be a centre of...

3) A centre of science and research

The centrepiece or intellectual heart of Chemnitz as a city of science is our Technical University. Today, several thousand employees work in science and technology development.

The non-university research institutions, the two excellent Fraunhofer Institutes and the numerous other research institutes work in an application-orientated manner and with a remarkable amount of third-party funding from industry for the new federal states.

In order to continue the successful path of economic development, the dialogue between science and industry must be constantly reinforced. The TechnoPark, with an investment totalling EUR 15.6 million, is a concrete project in this respect.

I will use my experience as Minister for Science and Research to help ensure that the translation of research findings into new products becomes a key competence of the region. We must and we can be faster and better than the international competition.

The university is not only a training centre for our young academics but, with 10,000 students, is also a decisive factor from a demographic point of view. My aim is therefore to further strengthen the ties and sense of belonging between the city and the TU and, for example, to jointly promote studying in Chemnitz.

4) Chemnitz, a good place for families and intergenerational coexistence

Chemnitz is already a family-friendly place in many areas. To ensure that this is the case and remains so, the city is deploying considerable financial resources.

In the last three years, we have provided almost EUR 20 million per year in the administrative budget alone for day-care centres, and in 2007 the figure will be over EUR 20 million.

At EUR 4.5 million, the high level of previous years is to be maintained for youth and youth social work.

Between 2003 and 2006, between EUR 15 and 16.5 million was made available annually for family support measures; in 2007, the figure will be EUR 17.1 million.

The promotion of young families through good, affordable housing, a good living environment, the compatibility of family and career, educational and childcare facilities in daycare centres of exemplary quality, ever-improving cooperation between daycare centres and primary schools - all this is not only an everyday reality in the family city of Chemnitz, but above all a location factor in the competition between regions, with which I would like to promote us even more than before.

I want to further strengthen these good conditions and create even more special offers for families, precisely because of the demographic development, precisely because of the shortage of skilled labour and because of our social mission.

I am thinking, for example, of the further expansion of daycare centres and youth welfare facilities as places for families and the further flexibilisation of opening hours. I would like to discuss this with you over the course of the next year.

Despite the good conditions that already exist for families in Chemnitz today, despite a slight increase in the number of births in recent years and despite slight immigration gains among younger people, it remains to be seen that the proportion of children and young people in our city will continue to decline.

The departure of many young families and the halving of the birth rate in the 1990s have triggered a considerable change in the age structure of the population.

This makes it all the more important to provide our young people with suitable forms of participation, as they are affected by the consequences of our decisions the longest. Together with the initiators of the Youth Parliament, I have already drawn up a number of proposals: The right to speak on committees and in the city council, access to draft resolutions and support from the administration should help to create an active youth forum and involve young people more closely in municipal decision-making processes. However, we also bear responsibility in other areas.

Families affected by unemployment have a particularly difficult time: how can they keep up in a demanding, fast-moving world full of colourful goods? How can they give their children a sense of direction when it is so difficult for them to find their own because they feel they are not needed?

It is part of our local political responsibility to help ensure that all families can participate in life in our city, regardless of their budget.

The Chemnitz Pass, for which we have budgeted EUR 256,000 in the 2007 draft budget, is a voluntary service provided by the city that supports this participation and which I firmly believe, dear city councillors, we must afford!

It is also conceivable to set up voluntary sponsorships for socially disadvantaged families to transfer everyday life and parenting skills and to increase educational opportunities for the children.

Ladies and gentlemen, I want our city to be a place where Chemnitz residents of all generations feel at home.

Over the next few years, we will be faced with the task of organising life in an ageing urban society, i.e. making room for the different strengths and needs of the generations, organising a balance between different interests, constantly cultivating togetherness and helping to organise help where it is needed.

Special programmes for young people and senior citizens are therefore just as necessary as cross-generational programmes, e.g. in sports clubs or at the opera.

"Demographic change is the greatest challenge facing Saxony at the beginning of the 21st century," said Minister President Milbradt recently, describing the situation. The external image of our city will also change.

5) Chemnitz urban redevelopment - for a modern city with tradition

My predecessors in office from 1850 to 1930 were faced with the task of managing a rapidly growing city and creating living space for more and more people.

In Chemnitz, as in many German and European cities, the mayors of the first half of the 21st century have to adapt to a different demographic situation: Declining population figures and an older population require a rethink in many areas.

The city of Chemnitz has not suppressed this paradigm shift in urban development, but has recognised it and geared its concepts towards the transformation of our city. You will remember the housing action plan, the integrated urban development programme and, more recently, the district concepts. Chemnitz is thus one of the pioneers of urban redevelopment - recognised by experts nationwide.

Even if the considerable out-migration of the early post-reunification years has been halted, we must prepare ourselves for the fact that our city will continue to lose population, because since 1990 we have had a young generation that has effectively halved in size and cannot close the demographic gap even with a wealth of children.

Concepts for the shrinking of our city are therefore indispensable. The active communication of our plans and their successful implementation should create confidence. Because only a city that has recognisable answers to unstoppable European development trends is interesting as a business location and is also attractive to newcomers.

Urban redevelopment in Chemnitz encompasses the entire city area. Public reports, as well as the problems that citizens bring to me, show the uncertainty and sometimes also the pain when houses are demolished in the neighbourhood.

But demolitions, both in industrial housing and in some older neighbourhoods, are unfortunately unavoidable. Permanently empty houses, which cause the owners considerable maintenance costs, damage the attractiveness of the neighbourhood and ultimately drive the owners into insolvency.

Empty houses also cost money. And anyone who lived in the GDR knows what the houses look like when the rents don't cover costs.

If more and more houses are refurbished, the supply is many times higher than the demand. The result is cost and displacement competition. In order to make our city fit for the future, we must divest ourselves of houses in clearly defined areas in order to stabilise other locations in their context.

The administration and politicians can only incentivise the distribution of funds - be it for demolition funding or for redevelopment and upgrading. The final decision is made by the owners, the large housing associations as well as individual homeowners.

You, ladies and gentlemen, have already agreed to this approach with your decision on the funding strategy in April. The public information campaign in the neighbourhoods took place at the same time and is still ongoing with the current exhibition in the Technical Town Hall. This work process will continue in the coming year. We will have to pass further resolutions on the neighbourhood concepts in order to define the objectives for the coming years in the priority areas.

In doing so, I would like to intensify the discussion and information with our citizens.

The great recognition for the new city centre shows that we are well on the way to making our Chemnitz strong for the 21st century. The DIFA-AWARD, which was presented at EXPO-REAL, is a further exclamation mark and confirmation.

With regard to building plots B3 and B6, I now hope that the investor will take the marketing and development of the last two immediate city centre building plots seriously and consistently.

The image of our city centre will continue to change over the next few years. Let us embrace this process as an opportunity to build a modern city of the 21st century that is rich in tradition.

6) Administrative and functional reform - Chemnitz a reliable partner in the region

As part of the planned administrative reform, a total of over 4,000 jobs in the Free State will be municipalised. It has not yet been decided how many jobs the City of Chemnitz will take on, nor how the financial and additional burden equalisation will be calculated, for which we, together with Leipzig and Dresden, already have clear ideas.

The administrative and functional reform, which will also result in new, large districts around Chemnitz, presents us with new tasks and constellations:

• Additional tasks in the social sector, in the repair of federal and state roads and in environmental law will be assigned to the three independent cities and probably ten districts.
• Many special-purpose associations, from the waste association to the savings bank, are under pressure to change because the territorial boundaries no longer correspond to the new district boundaries.
• Chemnitz, the third-largest city in eastern Germany, will be the second-smallest regional authority in Saxony in this new structure. At the same time, Chemnitz is the regional centre of the most populous region in Saxony.

This is precisely why active regional co-operation is of particular importance to me. The Chemnitz-Zwickau economic region, the good co-operation with the district of Chemnitzer Land and in the Central Saxony Transport Association are just a few examples of a partnership that has grown in the region and should be continued and expanded under the new conditions. We can achieve a lot together.

7) Chemnitz, an economically strong city with a good quality of life

... that is a simple, clear vision of the future of our city. And yet we know that enormous efforts, courage and a wealth of ideas must come together under this heading.

I can only outline here what is involved in addition to economic development and the topics already mentioned: family support, social work, sport, local transport, environmental protection, order and safety, education and culture are the lifelines of our city. They create identity, pride in one's own city, quality of life and a good attitude towards life.

We share responsibility for promoting and maintaining these lifelines. The urbanity of cities is essentially characterised by an active cultural and sporting life.

For example, around 30,000 members play sport in our 190 or so sports clubs. With a great deal of passion and voluntary commitment, countless hours are spent organising sports and competitions, club life and youth development. Some clubs also operate sports facilities.

To promote and support sport in Chemnitz, we are proposing that an additional EUR 935,000 be made available in a two-year programme in the 2007/08 budget for the renovation of sports facilities operated by clubs that are in urgent need of renovation. We want to increase municipal expenditure on sport as a whole by almost EUR 1.3 million in 2007 compared to the current financial year.

And we want to finally complete the sports school centre with the construction of the sports middle school.

Culture is "what people make of themselves and their world". Cultural policy is always also social policy. Municipal cultural policy must be designed in such a way that the fundamental principles of our society that create meaning are not only preserved, but also constantly emphasised and further developed.

We must not forget this: All approaches to art and culture only work if they succeed in reaching all generations and social milieus. A good education for all opens up access to our culture and cultural diversity enables access with different interests and inclinations.

The city of Chemnitz also lives in the hearts and minds of many people as a city of culture. They identify with its cultural achievements.

Chemnitz as a city of modernity is supported by a diverse, moving art and cultural life with breadth, depth and cultural excellence. The fact that Chemnitz's image is changing for the better has a lot to do with the fact that this culture comes and goes in Chemnitz.

The draft administrative and capital budget for 2007 is also a commitment to this rich cultural life.

The annual budget is one of the most important decisions we have to make here in the City Council. It is the recurring balancing act between what is desirable and what is feasible. It's policy moulded into sober figures.

However, we would be poor if the economic benefits alone were the guiding principle of our city policy. This principle is also evident in next year's budget, which I would now like to discuss in more detail.

8) Shared responsibility for the municipal budget

At the beginning of my term of office, when I was informed about the status of the 2007 budget planning, there was a deficit of EUR 26.8 million. This was triggered by a significant fall in key allocations, rising expenditure in the social and youth sectors and an increase in personnel costs. The measures introduced by the departments contributed to the fact that the expected shortfall at the end of September was only EUR 17.3 million.

The first important message regarding the 2007 budget is:

• After intensive consideration and discussion, we are today presenting you with a balanced draft budget for 2007 and the financial planning period up to 2010.

The EUR 22.2 million shortfall in income from key allocations forecast by the regional council for the 2006 budget approval is no longer to be feared in this amount following negotiations between the municipal umbrella organisations and the state government.

Even if we are experiencing a trough in general key allocations in 2007 and 2008, we can expect significantly better financial resources from 2009 onwards for the first time in years.

This situation is also reflected in the budget of the City of Chemnitz - in the 2008 financial plan, the withdrawal from reserves, which is still necessary, will be reduced. In 2009 and 2010, we want to be able to manage without withdrawing from reserves again.

A key factor that the new Financial Equalisation Act does not yet take into account is the administrative reform scheduled for 2008. Due to the reduction in the number of administrative districts and independent cities, new distribution keys will have to be determined.

One success for the municipalities is the intended cancellation of the so-called switch clause, which authorised the state to change the shares between general and investment key allocations during the year and had a negative impact on the 2006 administrative budget. This planning risk will no longer affect the 2007 financial year.

The successful economic development of the city is also evident in the budget.

The second important message of the 2007 budget is

• The city's tax revenues totalling EUR 148.4 million exceed the general key allocations for the first time, which amount to EUR 142.3 million in 2007.

Trade tax in particular - the most important revenue item among municipal taxes - is developing well. After considerable additional income was realised in 2005, which replenished our general reserve, the budgeted figures for 2006 were raised to more than EUR 70 million. The figure of EUR 75 million planned for 2007 is based on the assumption that the economy will continue to grow.

With regard to income from property tax B, the increase in the assessment rate from 450 % to 475 % was taken into account. This enabled the necessary additional revenue of EUR 1.6 million to be incorporated into the draft budget. The necessary collection rate statutes are available for resolution today.

Although the increase in sales tax to 19% will place a financial burden on the budget in various areas, the municipal share of sales tax will generate additional revenue of EUR 1.4 million.

The municipal share of income tax is also developing positively, partly due to the Tax Law Amendment Act coming into force in 2007 and the SME Relief Act. Additional income is already expected for 2006 due to the improved economic development, so that an increase to EUR 27.2 million in 2007 is justified.

The largest financial expenditure item is personnel costs totalling EUR 143 million, which at 29% represent the largest share of the administrative budget, but still represent a good figure compared to other local authorities.

At this point, I would like to expressly recognise the very personal contribution made by our employees with the 36-hour week and the associated salary sacrifice. This achievement has resulted in savings of EUR 30 million between 2003 and today. In 2007, the savings will amount to a further EUR 8 million.

The social welfare/Hartz IV budget is another key area of expenditure. With the 2005 accounting results, empirical values for these costs are available for the first time, which can be used as a basis for planning in 2007. While expenditure of EUR 70.7 million was still necessary in the 2005 accounts, the 2007 budget already estimates EUR 81.1 million. This development is primarily due to the increase in the number of people entitled to benefits and the rise in accommodation costs.

Even taking into account the relevant income, the City of Chemnitz will have to pay a subsidy of EUR 40.6 million in 2007. This is EUR 4.5 million more than in 2005. Planning certainty has at least been increased in recent weeks in terms of income: The federal government will increase its contribution in Saxony to 31.2 %.

In the area of culture, the Municipal Theatre will receive the largest subsidy of EUR 22.3 million and the in-house operation "Das TIETZ" EUR 8.2 million.

Despite the closure of secondary schools, expenditure on education will not decrease and will remain at around EUR 25 million in 2007, as in previous years.

Dear City Councillors

As already mentioned at the beginning, the expenditure for the aforementioned services in the administrative budget exceeds the income, which is mainly available from taxes and general key allocations.

For this reason, we are proposing a withdrawal of EUR 14.1 million from the general reserve in favour of the administrative budget in 2007 and EUR 10.6 million in 2008. This withdrawal from the reserve is justifiable and sensible in view of the overall development described.

Chemnitz wants to continue investing, so allow me to briefly discuss the capital budget.

It is already clear from the total volume of the capital budget that here too there is a great dependence on the allocations from the state.

After reaching a low of EUR 795 thousand in 2005, investment-related key allocations totalled EUR 10.6 million in 2007. Nevertheless, it should be noted: In 2002, key investment allocations were almost three times as high at EUR 28.2 million.

The City of Chemnitz generates its own income in the capital budget mainly from proceeds from the sale of land. Both in 2007 and in the financial planning period, no disposals of investments are deliberately planned!

As in the administrative budget, the capital budget also focuses on education. The investment volume for our schools is planned at EUR 15.8 million. At EUR 7.6 million in 2007, the construction work on the "Sports School Centre" is the largest investment measure in this area. The amalgamation of Humboldt and Kepler grammar schools is also part of the planning.

The City of Chemnitz remains committed to its goal of carrying out refurbishment measures in schools as PPP projects. However, it is essential that the Free State of Saxony also grants subsidies for private participation.

The City of Chemnitz will also commit EUR 3.4 million to further refurbishments and new builds in day care centres. Major construction projects in 2007 include the Kaufmannstraße 12 and Inselstraße 2 day care centres as well as the grant for the Grüna day care centre. This is all money well spent, because we are investing in the education and care of our children.

The city will use its own funds totalling EUR 10.6 million for road construction projects in 2007. The total expenditure will be EUR 17.6 million. The focus will be on completing infrastructure measures that have already been started, such as the Südverbund/Neefestraße junction and the Kalkstraße motorway feeder road.
The refurbishment and development measures in 2007 include the subsidy for the refurbishment of the Schocken department stores' for the first time. An amount of EUR 2.6 million has been budgeted for this in 2007.

Approximately EUR 2 million has been earmarked for the planning of the TechnoPark and preparatory construction activities in 2007. In addition, the start of the tendering process for the entire project is secured by a commitment authorisation. As already known, we are pleased to report that the state subsidy notification has been received and the financing of the overall project has thus been secured.

In terms of investment in cultural facilities, the continuation of the Chemnitz Art Collections building project and the further construction of the Gunzenhauser Museum take centre stage.

The third important message of the 2007 budget is

• The city's net new debt will not be increased, i.e. the repayment instalments to be made will exceed new borrowing both in 2007 and in the financial planning period. This means that the debt per inhabitant will remain almost constant.

The administration is presenting you with a balanced proposal in the area of investment. The available funds are to be used for infrastructure measures, measures to provide services of general interest and to improve the quality of life.

I would ask you to examine the proposals carefully and hope that they will meet with your approval.

I would also like to briefly address the situation regarding the city's shareholdings.

The City of Chemnitz currently holds 22 direct shareholdings, 27 "sub-subsidiaries" as well as 4 municipal enterprises. The City of Chemnitz is also a member of 10 special-purpose associations.

These economic activities of the City of Chemnitz account for a considerable volume: the total income of the direct municipal companies of around EUR 600 million exceeds the total income of the administrative budget by around EUR 100 million.

The investment volume of the direct municipal companies is roughly comparable to the total amount of the capital budget.

With around 4,700 employees, the municipal companies provide a significant proportion of local jobs.

The income from municipal holdings is expected to total around EUR 18.5 million in 2007 and results primarily from profit distributions, interest on the equity of the municipal companies and concession fees.

In return, the City of Chemnitz will pay subsidies totalling around EUR 43.2 million to companies and own operations from the administrative budget in 2007.
Compared to the 2006 financial year, the present draft plan envisages approximately EUR 3.8 million less in subsidies to municipal companies. With the steady reduction in subsidies in recent years, the municipal companies are making an important contribution to budget consolidation.

Ladies and gentlemen,

Compared to other independent cities in Saxony, the City of Chemnitz has a solid budget situation. On the one hand, both the draft budget and the financial plan are balanced until 2010. On the other hand, there are no deficits from previous years to make up. I am therefore confident that we will be able to adopt the 2007 budget at the city council meeting in February.

Let us all be guided by the principle of not living beyond our means and still investing in the future.

9) Strengthening trust in politics and administration

I want people in this city to know that their opinion counts not only in elections, but also in everyday politics.

A voter turnout

• of 40.6 % in the 2001 Lord Mayor elections
• 38.5 % in the 2006 Lord Mayor elections and
• 43.4 % in the last local elections

must worry and concern us.

This voter turnout clearly shows that we need to do even more to gain confidence in ourselves and our work.

A first step in this direction is my Citizens' Consultation Hour, in which everyone in Chemnitz has the opportunity to speak to their Lord Mayor in person. These meetings give me the opportunity to gain a direct insight into people's concerns, needs and ideas.

I want to involve people in what is going on in their city. That is why I will be organising residents' meetings - and I hope for your support in this, dear Councillors - at which important projects will be presented by the administration and discussed with the citizens and at which the citizens will have the opportunity to ask specific questions about their district, make suggestions or receive information directly.

Dear Councillors, people also judge us by the way we treat each other. I therefore ask you: let us treat each other with fairness and respect.

We sometimes have different goals and we will occasionally argue about the right path to take. There will be different opinions and majorities and in some places we will fight passionately for solutions.

But we should use language that does not personally offend those who think differently.

Right-wing extremist or xenophobic ideas must not be accepted as a means of debate, not even subliminally.

Politics, especially at national and international level, is complicated for many people today; it can sometimes seem disturbingly fast and contradictory. However, I believe that we have an opportunity to make this clear, especially at a local level: This is about people and everyday issues.

We have the chance to show that democracy works for the good of the people and not for its own sake. And we also have a chance to win back lost trust.

The successful development of our city would not have been possible without the more than 3,800 employees in the city administration. The success of the structural change is also their success.

I share leadership responsibility with the mayors and we will do everything we can in the coming years to create a good future for the people of this city.

In everything we do and decide in the city administration, we must be aware that we do this as a service provider on behalf of the citizens.

10) Chemnitz, a city worth working for

I am looking forward to the next few years and I hope you feel the same. There is a lot of work ahead of us, but we all know that: Chemnitz is a city worth working for.

We have difficult decisions ahead of us, we will need strength, we will need backbone and we will need the courage to try new things.

In this speech - which was very long and yet far too short to go into everything that is important and necessary - I have only been able to outline the areas of work.

Ladies and gentlemen,

I invite you all to continue building our city together.