Speeches

- Subject to change without notice. The spoken word prevails. -

When we began drawing up this budget with a closed meeting in April, we were able to assume very favourable parameters. The Chemnitz economy was developing at an above-average rate. Entrepreneurs were optimistic about the future. Full order books, company expansions, additional demand for skilled labour - these were the topics that were also on the agenda during my company visits.

This positive development can also be seen in Chemnitz's tax revenues. Income tax and trade tax, and therefore tax revenues based on growth, are developing well. The above-plan increase in income tax in particular is a clear indication that this growth is also being reflected in the labour market. We have succeeded in getting more people back into work. Into work that now also means more money in the wallets of many employees. However, this does not apply to all sectors and employment relationships.

There have already been initial signs of a possible economic slowdown in Germany. For most companies in Chemnitz, however, this was no cause for concern, as they have full order books well into next year. This was all true until just four weeks ago.

Today we find ourselves in a situation that is shaking the financial world to the core. Entire pillars of the global financial architecture are tottering. Government intervention is doing a lot to ensure that the remaining cornerstones can hold up the building.

Nobody can really say today what impact the financial turmoil will have on the economy. We therefore need a responsible measure to deal with the uncertainties.

No one, whether at federal, state or local level, no one, whether chancellor, finance minister, prime minister or mayor, has the same certainties as they did four weeks ago. We expect the management boards of both German and European banks to fulfil their responsibilities. The federal and state governments are at their side.

We hope that German industry and the European economy are robust enough to withstand what may be the most difficult situation in 60 years.

Our responsibility in the face of these major uncertainties is to demonstrate reliability and sustainability. This is another reason why we are proposing that you continue our prudent budgetary policy of recent years. The cornerstones of our 2008 budget:

• no new borrowing
• balanced financial planning
• further moderate reduction in debt

therefore remain unchanged.

We expect to achieve the jointly agreed targets for 2008. There are deviations from the plan in some areas - most of which you already know - e.g. additional expenditure on personnel costs, the high-flyer and the theatre. However, these will probably be offset by additional income from taxes - in particular from income tax, higher key allocations and lower expenditure on social security contributions, if you support this. This means that we can plan for the new year without accumulated deficits.

Of course, there is also some cautious good news to report:

The draft budget before you for 2009 is balanced. I hope that this balance will be maintained and that it will also be achieved for the financial planning period. At the moment, we still have a deficit in 2010 and 2011 and, as we know, there are still a number of issues in the 2009 budget that we need to address in the budget consultation.

The city's financial investments are safe. For years, Chemnitz has pursued an extremely conservative investment policy that is closely aligned with the provisions of the municipal code.

We are continuing our debt reduction programme. Our goal remains unchanged: By 2020, the City of Chemnitz's debt will be below €1,000 per inhabitant.

The 2009 budget has a total volume of € 707 million. It is therefore € 42.6 million or 6.4 % larger than the 2008 budget, of which € 147.6 million is earmarked for the capital budget, including almost € 60 million for construction measures.

Key allocations continue to be a major source of income for the city. At € 163 million, they correspond almost exactly to the expected tax revenue in the administrative budget. Key allocations for investments are currently budgeted at € 26.2 million.

The exact amount of these allocations has not yet been determined. The Free State of Bavaria will adopt its double budget and thus the final FAG figures in the second week of December. Our city council meeting on the budget is scheduled for the following week. We therefore assume that we will have binding figures by the time we decide on the budget. In particular, the effects of the functional reform - the pillar of independent cities is now only represented by three cities - and the planned introduction of a provision fund have not yet been finalised.

It is therefore not just good news and reliable figures that we can present to you with the draft plan. The planning is also dependent on factors that we cannot fully assess and in some cases cannot even influence.

In addition, the draft plan still contains tasks that need to be solved during the consultation process.

The 2009 budget has three programmatic priorities that logically follow on from the previous year's budget. These are:

1. Promoting the economy,
2. investing in education and
3. utilising and preserving our municipal scope for action.

Priority 1: Promoting the economy

The Chemnitz economy is developing well. Building on two strong previous years, each with double-digit growth rates, turnover has continued to rise in 2008. The growth rate to date is 8.7 %, combined with a slight increase in employment and a slight rise in the number of companies with more than 20 employees.

This is also having an impact on unemployment. 12.3 % is the current figure as at 30 September for the city area and 10.6 % for the entire catchment area of the employment agency in Chemnitz. This makes our city a driving force and employer for the entire region. A "commuter balance" of 25,000 more in-commuters than out-commuters is also strong evidence of this.

Trompetter Guss Chemnitz GmbH is one of the companies that has secured 64 jobs and created 244 new ones through investment and expansion. A further 100 new jobs are to be created by mid-2009. It is the right of local residents to demand compliance with emission values and environmental protection regulations. These are stricter in Germany than almost anywhere else in the world. The authorisation granted to the company by the regional authorities includes precisely this legal framework. It is also the right of local residents to lodge an objection. What I firmly reject, however, is public discrediting of the employees working there and of the entrepreneur, Mr Trompetter. Our city, our industrial city, lives from and with these people. Entrepreneurship and hard work create the values that form the basis of our urban development. I am sure that the majority of Chemnitz residents agree with this.

On the training market, we are recording the best results since the political turnaround. Almost all applicants have been placed. As of Monday 13 October, all but three of the more than 1,600 young people from Chemnitz who were looking for an apprenticeship have been placed. The majority of them have started an in-company apprenticeship. The commitment of the companies is even stronger for the next apprenticeship year. Almost all of Chemnitz's well-known companies are taking part in today's training fair at the Employment Agency.

Our good economic development is now recognised throughout Germany. In the latest city ranking a few weeks ago, Chemnitz moved up 14 places to 27th place in the midfield of the 50 largest cities in Germany. Chemnitz is thus the climber of the year, and that without the bonus for Eastern Germany. Falling unemployment figures, good location conditions and an improved social structure speak in favour of Chemnitz. Favourable rents, family friendliness and a low cost of living are further plus points.

This is why economic development remains the central task in 2009.

We have budgeted € 12.3 million for the expansion of infrastructure, in particular for roads and bridges.

Further commercial sites are also needed. For 2009, we are proposing the development of the 4th construction phase in the "An der Jagdschänkenstraße" industrial estate and the development of the Rottluff industrial estate. The new construction of the Güterbahnhofstraße canal near the Smart Systems Campus is also included.

The largest building construction project of 2008, our start-up centre on the Smart Systems Campus, will also be completed in 2009. The first pre-letting agreement for ¼ of the space has already been signed. Further enquiries have been received and good capacity utilisation is becoming apparent.

Another research centre is on course for growth. The Fraunhofer IWU will become the competence centre for energy efficiency research of at least national importance. This will lead to considerable expansion of the IWU. Young scientists are invited to come to Chemnitz to work on one of the questions of the future: How can production be organised in a more energy-efficient way?

Over the last few weeks, the administration and the CWE have been thinking intensively about how we can continue to promote the economy.

The result is an economic policy concept for our city. It defines the goals up to 2020, describes fields of action and names specific measures for economic development.

Over the next few weeks, business stakeholders and of course you, our city councillors, will be involved in the discussion. Once the votes on the economic policy concept have been finalised, it will become part of the overall concept for the urban development of the city of Chemnitz.

The Seko 2020 is being worked on intensively. It forms the basis for the further development and prospects of our city. Following consultations with you and other public forums, the overall concept could be presented to the City Council in spring 2009, depending on the progress of the consultations.

2009 marks the 200th anniversary of Richard Hartmann's birth, among other anniversaries. The rise of our city as an industrial metropolis is closely linked to his name. For many, Richard Hartmann is one of the fathers of industrial modernity in Chemnitz. To honour him, a Hartmann Year 2009 is being prepared, which will commemorate him and his work in our city in several events throughout the year. The Chemnitz business community, in particular the Industrieverein 1828, is heavily involved in the preparations, which are being coordinated by Mrs Lüth. The CMT is responsible for marketing and we hope not least to attract many supra-regional railway fans to Chemnitz in Hartmann's year.

Business promotion is not an end in itself, but a necessity.

We are currently assuming that tax revenues will increase by 7.5 % in 2009 compared to the previous year. This is based on the federal government's tax estimate from May 2008, and I have already pointed out the potential risks. Nevertheless, tax revenue in 2009 is expected to account for only 30 % of total administrative budget expenditure. This shows that Chemnitz still has an arduous road to travel before the Solidarity Pact expires. All East German municipalities are faced with the task of increasing their income and reducing expenditure.

Our two major tax revenues, trade tax and the municipal share of income tax, are expected to increase the most. Not least the good interim result in budget implementation this year gives us reason to be optimistic for next year as well. We expect trade tax to increase by € 1.7 million to € 74.5 million. In terms of income tax, we expect an even more significant increase of € 9.9 million to € 44.9 million. This reflects the positive development on the labour market.

The economy and science, my dear city councillors, the economy of tomorrow can only be as good as our education is today. Incidentally, this also applies to the formation of values such as morals, decency and a sense of responsibility. That is why "investing in education" is the second priority in the budget.

We had already agreed in the last budget resolution that we would step up our efforts to refurbish schools and daycare centres. We propose to continue along this path in 2009.

Over € 19.5 million has been budgeted for the refurbishment of school buildings. This roughly corresponds to the level of 2008 and represents an increase of more than double the amount in 2007. Value-intensive measures in 2009 include the sports school centre, the Siegmar primary school, the Schloß and Rudolf primary schools and the vocational school centre for technology I. The financial planning period also includes the new construction projects on Heinrich-Schütz-Straße with the school for the physically disabled, the home and the Chemnitz school model worth €34 million.

I would like to name the first construction site here: We are reliant on subsidies for the realisation of the construction measures. Due to the new school building subsidy guidelines, we did not receive any subsidies for primary schools in 2008. Mr Brehm is trying to find solutions here. We want to stick to our principle of "short distances for short legs", i.e. the preservation of all primary school locations.

Investing in content is at least as important as investing in buildings. I am therefore delighted that 53 schools in Chemnitz now offer all-day programmes. Last year, there were only 37 schools.

We have also achieved a new level of quality in careers guidance at our secondary schools. From this school year onwards, careers guidance will take place in the classroom via projects organised by the Employment Agency and the Chamber of Crafts. This includes inclination and aptitude tests, work placements and practical lessons as well as familiarisation with various occupational fields. Our aim is to sensitise pupils to actual needs and make the transition from school to training easier for them.

Supporting children from socially disadvantaged families is particularly important to us. "Equal opportunities" is so easy to say, but it takes a lot of initiative and sometimes supportive hands. Every cent invested here is money well spent. We have therefore revised the Chemnitz Pass guidelines, included the costs for the career choice passport and adjusted the subsidy for work equipment at the start of the school year.

In addition, we naturally welcome the federal government's school starter package, which was approved by the coalition committee a week ago on Sunday.

There are also sufficient places available in our day care centres in Chemnitz in 2009. Almost 14,000 children are currently being educated and cared for. We anticipate a further slight increase in demand.

Our current expenditure will therefore rise to € 62 million. This corresponds to an increase of € 8.5 million or 11.6 % compared to 2008. Less than half of this is cushioned by income from the state. The majority of the increase relates to personnel costs. These are rising as a result of pay rises and the additional staffing requirements of 45 positions. A further 38 positions result from the decision taken in July to increase the childcare offer to 7.5 hours. These job requirements will be covered by increasing the weekly working hours of existing childcare staff and by recruiting around 12 new staff.

Qualified nursery teachers are difficult to find. A situation that was unimaginable just a few years ago. Covering the demand for skilled labour in this area is a new but exciting challenge for us.

We have to reckon with another construction site in the daycare centres: The change in the childcare ratio by the state has not yet been fully funded. If the state parliament does not amend the government draft, the city will have to make up a deficit of €900 thousand.

Nevertheless, we will continue to invest in the daycare centres. In 2009, we intend to spend € 6.5 million on new builds and complete refurbishments. As with schools, this is almost twice as much as in 2007.

A number of anniversaries are on the programme for next year. In addition to honouring Richard Hartmann, these include in particular: 20 years of peaceful revolution, 100 years of the King Albert Museum and 100 years of opera.

A concept is currently being developed for the anniversary of the peaceful revolution. These events, which are so important for our democracy, are to be commemorated in a vivid and dignified way. Outstanding Chemnitz personalities from this period will be involved in the preparations.

The remodelling of the art collections following the removal of the Natural History Museum will be completed in 2009 thanks to substantial federal and state funding. The celebrations of 100 years of opera and 100 years of art collections - in summer 2009 - will be coordinated between the museum and the opera.

The theatre is probably the largest construction site in the city's budget. At this point, I would like to emphasise once again the joint position of Ms Lüth and Mr Nonnen: We hope and we urge a viable concept for our theatre! Today, the city council has before it the administration's proposal to make an additional €600,000 available for 2008. The draft plan for 2009 includes a further increase of € 1.0 million. This means that the 2008/2009 season is secured without any restrictions - contracts can be honoured.

A viable and financially realisable concept is needed for the future. This has been announced by the artistic director for the end of the month. As soon as it is available and the Supervisory Board gives the green light, it will be presented to you. The budget consultations until December are a suitable time to reach fundamental decisions here.

Another construction site in the city's budget is the Saxon Industrial Museum. Organised as a special-purpose association, half of its funding was provided by the Free State until 2004. The coalition agreement prevented this funding from being cancelled. However, the annual reduction of 7% demanded by the Free State was not. The city has absorbed this reduction over the years. Now, with the new state budget, there is a chance to increase the subsidy back to 1 million euros. Saxony's industrial heritage is also the responsibility of the Free State. I have received pledges from the Chemnitz members of parliament to do exactly that.

For the TIETZ, it has been arranged that the necessary personnel costs will be provided with the change lists. Incidentally, the same applies to the TIETZ as to all municipal organisations and facilities: cost increases must also be borne by the TIETZ's own measures. This is no easy task - but it is necessary, otherwise there is a risk of financial pressure to the detriment of all others.

3rd programmatic focus of our budget is the utilisation and preservation of our municipal scope for action.

This includes remaining in dialogue with our citizens - allowing their opinions to influence our decisions. That is why we will continue to organise the forums that citizens want and accept.

These include the residents' meetings, which, in accordance with our decision, will take place four times a year instead of the previous two, starting in 2009 with a new layout of the meeting areas.

In order to make our sometimes complex and difficult decisions even more transparent for citizens, we will provide access to the council's public documents on the Internet. From January 2009, citizens will then have the opportunity to scrutinise the content of the documents.

Urban redevelopment and the creation of the urban development programme are topics in which the public will be involved. That is why we will continue to hold joint discussions in public forums and city workshops, promote understanding and take viable ideas seriously and accept them.

Utilising and preserving municipal scope for action means first and foremost that we continue to fulfil our social responsibility. However, this also means that we must preserve the financial resources in our budget.

Getting more and more people into work remains the goal to which we must contribute to the best of our ability. Targeted social projects and good youth work improve the chances of integration on the labour market. Not every effort leads to success here. However, the lowest unemployment rate since 1992, since the political turnaround, shows that the effort is worthwhile.

Of course, we are also utilising the Kommunal-Kombi and Job-Perspektive programmes. We want the city to support the federal and state programmes with over €1.5 million in 2009. Of this, we are providing €800,000 for the Kommunalkombi programme and €743,000 for the Job-Perspektive programme.

A phased action plan for accessibility in Chemnitz will be developed in 2009. The aim is to ensure barrier-free administrative services as well as barrier-free access to municipal services and facilities. Money has also been earmarked for a new surface on the market square. However, whether it will be enough will depend not least on the variant selected.

We also bear municipal responsibility for all other areas, such as youth welfare, health and sport. We therefore want to keep expenditure on youth welfare and subsidies for youth work constant or increase it slightly in 2009. We will also continue to ensure the quality of health services. Grants to independent organisations and clubs will increase slightly compared to the previous year.

The city's expenditure on sport will also increase. While € 10.9 million was available last year, the figure is now € 11.9 million. The main reason for the increase is the higher personnel costs. However, direct sports funding, i.e. grants to the city sports association and the clubs directly, also increased by 8.7% to € 1.9 million.
In addition, a further €190 thousand is available for Kommunal-Kombi and the Job-Perspektive programme.

In the capital budget, € 1.6 million is available for sport. The focus here is on continuing the reconstruction of the municipal swimming pool and the construction of the new entrance building at the Einsiedel outdoor pool.

Finally, I would like to mention a central component of the budget and our responsibility. These are our employees in the administration. Their work ensures that the decisions made in the budget are implemented. For the first time since 2003, personnel costs have risen significantly. There are three main reasons for this:

1. The return to the 40-hour working week,
2. the high wage settlement in spring 2008 and
3. the necessary new appointments, mainly in the daycare centres.

This led to an increase in personnel costs of € 24.3 million to a total of € 175.4 million.

Since the start of the in-house wage agreement in 2003 until today, 667 jobs have been cut in the city administration - excluding outsourcing. That is 16.3 % of all jobs. The return to a 40-hour week was included in the medium-term financial planning. The high pay settlement was not. As you know from your specialised committees, we are urgently dependent on the full working capacity and time of our employees. Due to the intended massive reduction in personnel, the fulfilment of even mandatory tasks is otherwise no longer fully guaranteed.

Balancing the budget is only possible with the help of the general reserve. This was also provided for in the medium-term financial plan. However, I must repeat: The dip into the reserve shows that we have a need for consolidation in the administrative budget with the falling public allocations from the solidarity pact.

The general reserve is already insufficient to finance all years of the financial plan and it does not yet take into account the construction sites that have been identified.

In order to preserve our municipal room for manoeuvre, we need to act responsibly now - in these times of great uncertainty. We therefore propose to continue with our debt reduction concept. As decided last year, we want to reduce the current debt level of € 308 million by € 2 million annually in order to sustainably reduce our interest expenditure.

The 2009 budget is the result of an intensive negotiation process within the administration. For the first time, the City Council was informed about the individual budgets and the preparation decree at an early stage. The mayors were actively and constructively involved in the planning process. Priorities and risks were weighed up together. I would like to thank everyone involved - my special thanks go to the treasurer's office, Ms Härtel, and the mayor, Mr Nonnen. Economic development,
education, cultural identity, intergenerational social promotion and integration
as an instrument of urban development in the short and medium term with a budget concept,
is one of the most difficult and at the same time most important tasks for the administration and the city council.

The budget is before you and will now be discussed by the individual committees. We propose that the budget be finally discussed and approved on 17 December 2008. This would ensure rapid approval by the legal supervisory authority and the ability to act quickly to implement the budget.