The application of the Municipality of Portimão to the Local Economy Support Program (PAEL), in the amount of 100 million euros, approved by the Chamber at an extraordinary meeting on September 27, together with the preparation of a Financial Rebalancing Plan, will be discussed and voted on tonight in the Municipal Assembly.
«This is a Global Plan for the Financial Adjustment of the Municipality of Portimão, using two sources of financing, through adherence to the PAEL and the use of a Financial Rebalancing Plan (long-term loan from the Bank) that will make it possible to pay the entire short-term debt», stresses the executive.
«This will be the last opportunity to settle late payments and to make economically and financially viable a group of small and medium-sized companies that are desperately hoping that the local authorities (Municipal Council and Municipal Assembly) fulfill their responsibilities. There is no other», insists the executive, in a statement.
Therefore, «in view of the above and the public interest that the approval of this plan represents for the Municipality, taking into account the short deadlines for submitting the application to the PAEL, the Municipality of Portimão makes public the urgent need for approval of this Adjustment Plan at the Extraordinary Municipal Assembly of October 3rd».
With the application to the PAEL program, in the amount of 100 million euros, a loan amortized over 20 years, the Municipality of Portimão states that "it will settle around 100 million late payments to suppliers".
On the other hand, the City Council also decided to enter into a financial rebalancing contract with any institution authorized to grant credit, for payment of the remaining debt up to a maximum amount of 39,442 million euros.
"These two instruments will make it possible to settle all overdue payments in the Municipality of Portimão", guarantees the executive.
The municipality also stresses that "this plan includes a rigorous set of measures aimed at reducing and containing expenditure and optimizing revenue, which will enable the municipality's financial viability during its implementation period."
This will be the plan that will be discussed and voted on today by the Municipal Assembly of Portimão.
The municipality explains that the use of these extraordinary measures is justified given, among other factors, the "drastic reduction in access to bank credit by our suppliers", "a significant, unexpected reduction in the value of transfers from the Budget from State to Municipalities, in the last two and a half years", to the "reduction in the value of municipal taxes and fees, with the exception of IMI, which has been occurring in recent years", and also to the fact that "globally" the City has registered “a loss of accumulated current revenue, namely in taxes and fees, in the last three years, of around 6 million euros, with the abrupt increase in expenses”.
The Municipality of Portimão recalls that, following the publication of the Law on Commitments and Late Payments and respective regulations, the subsequent approval of an economic assistance program under the Local Economy Support Program (PAEL) was expected.
This program was only published on the 28th of August. The respective regulation was only published on September 14, and requires compliance with deadlines that, if not met, make it impossible for the City Council to apply for this program.
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