The new Riga City Council has adopted the municipal budget for this year. Expenditure has been cut by EUR 20 million compared to 2020. Revenue has also been reduced. At the same time, budget expenditure has increased in relation to Covid-19 pandemic. In order learn about the current situation at the local government and how the pandemic has affected its work, information agency LETA interviewed Riga Mayor Martins Stakis (For!)

This is the first budget for the new coalition. How are the promised changes reflected in the budget?

There are changes that I am proud of, and there are such that should be improved. We have managed to increase the social budget. The Riga municipal social budget should be at least 10% of the total municipal expenses. This time, it is 11%, and of course this is a special year.

Another thing I am proud of is savings in the budget. In fact, from our EUR 1 billion budget, about EUR 850 million are fixed costs. About EUR 150 million are funds that can be distributed for different needs. We have managed to reduce this sum by 20 percent.

There are two things that we should continue doing. It is clear that we cannot only optimize the budget by cutting costs. Restructuring should also be implemented. Of course, we have not managed to perform serious restructuring during the first 100 days in the office, but two restructuring projects - restructuring of executive directorates and restructuring of the Riga Construction Board, the Riga City Development Department, and Riga Architect's Office - have been implemented.

Another thing where we have not succeeded yet - increase of financing for road maintenance. It is clear that EUR 17-18 million allocation for roads is not a sufficient sum. This year we have allocated the same amount, even though I would like this sum to be higher. Right now, however, we have two large-scale infrastructure projects, costs of which have grown - Deglava Bridge and Brasas Bridge - that should be completed. I think that next year we will have to add money for road maintenance.

What are the most important differences between this year’s budget and last year’s budget

The biggest difference is in expenditure. We have managed to extract EUR 10 million in costs from different departments. These are expenses were related with representation, maintenance of car parks, business trips, etc. Subsidy to Rigas Satiksme has been cut by EUR 11 million, which has been done by Rigas Satiksme taking over the e-ticket system. Several loans have been refinanced with lower interest rates.

There are three priorities which have seen an increase in financing - social sector, education, including preschools, and infrastructure. Next year we will spend more than EUR 100 million on Riga infrastructure.

You have quite a colorful coalition at the Riga City Council. How smooth was the budget adoption procedure?

The coalition of changes has been working on the budget as one team. Probably, when the times are better and there is more money, arguments will start as everyone will have their own priorities.

Has any of the pre-election promises been fulfilled in the present budget?

Partly yes. Speaking about kindergartens, we know that theoretically the line of children waiting for a place in a kindergarten is about 3,500 children, while the actual line is about 2,500 because some parents have applied for a place, but have found a different solution. In next year’s budget, there is money allocated for construction of new kindergartens, which would ensure places for 1,120 children. It is a reduction of lines by 50 percent.

How much money has Riga allocated for the fight against Covid-19 pandemic?

This is quite a huge complex of events. We have a EUR 10 million reserve fund in the budget. For example, in 2020, money from the reserve fund was used to cover losses of Rigas Satiksme, purchase computers for schools and pay bonuses for teachers and social employees, etc.

There are EUR 10 million also earmarked in this year’s budget. Social workers at present receive bonus payments at 50 percent of their wage, half of it is covered by the state, and half by the local government. We will pay this for as long as the Covid-19 situation lasts. The same situation is in force with the municipal police.

But there are many other positions. For example, Riga is one of the largest real estate property lessors in the country. The Riga City Council city property department leases properties to many private businesses. We have made a decision that we will free tenants from at least EUR 1 million worth of rent. Also, it is possible to postpone property tax payments.

Riga is the municipality with the largest number of Covid-19 infections. How about information about outbreaks in certain territories?

Yes, Riga has the largest number of Covid-109 infections, but looking at the incidence per 100,000 residents, Riga is not at the top. We have dealt with Covid-19 situation in social care centers, while other local governments are still fighting it. I obtain the necessary information at the Civil Defense Committee meeting. These meetings are attended by representatives from the State Fire and Rescue Departments or the Center for Disease Prevention and Control who inform us about the situation. I have no complaints about it.

What is cooperation like with the closest local governments in the fight against Covid-19?

We don’t have a common strategy. Riga now is restoring its relations with Pieriga municipalities. One of the vice mayors of Riga is working in this direction. The union of Riga and Pieriga municipalities, Riga Metropolis, has been established as a platform for the local governments to solve common problems.

How often are there reports about breaches of Covid-19 restrictions in the municipality?

The Riga Municipal Police reports that there have been no improvements in the area - on the contrary, there is a regress. At the moment when we had to introduce mandatory masks in public transport, we succeeded, even though it was not easy. And there was a feeling that 100 percent of passengers were wearing masks, but now there are reports that it is not so any more, which means that control should be increased. I can also say that curfew hours were a huge challenge for the Municipal Police. People who broke the curfew rules had to be put somewhere. Often, they were under the influence of alcohol or drugs, they had to be transported to night shelters. Sometimes those were up to 700-800 people a night. Some were infected, they had to be isolated from others. This was a tough situation that we had to deal with.

In contrast to previous year, this year will be remembered by the amount of snow. How successfully did Riga deal with this winter’s challenge?

It depends. Reorganizations in this area are necessary and urgently needed. There are 12 different services in Riga in charge of cleaning the snow, and these 12 companies have subcontractors. Each of them approached the tasks differently. And there were situations when one and the same territory was cleaned by five or even ten different companies.

Another challenge for Riga will be the World Ice Hockey Championship that has to be held by Riga alone. How much will it cost for the local government?

There are some legal specifications. The Riga Tourism and Development Bureau (RTAB) is in liquidation process. The bureau had an agreement with the Hockey Academy that is the organizer of the championship. RTAB has signed an agreement, providing that every year until the champion ship we pay EUR 250,000 in three disbursements. Last year we did not make this payment, stating clearly that if the championship is organized together with Minsk, we will look for ways to terminate the agreement. As this is not the case, we will pay what we did not pay for last year, and we will pay what we have to pay this year - EUR 250,000 and EUR 250,000, rspectively.

Does Riga have to get engaged in providing infrastructure?

We will not have to build another ice hall. Instead, the Olympic Center will be adjusted. And again there are legal specifications. The agreement signed with RTAB does not provide any assistance in infrastructure, only advertising and informative support. When the situation is clear for the Latvian Ice-Hockey Federation itself, we have to sit down at the table again and understand how the agreement changes, where we channel the payment.

Thus, Riga has to pay half a million euros. Is this money earmarked in the budget?

Yes, it is.

If there are any unforeseen expenses, how large is Riga’s reserve fund?

There is no reserve fund for such events. If the local government has to give money to someone, it has to take away from someone else. In case additional financing is needed, lawmakers will have to make the decisions.

Considering the Covid-19 situation in the country, is such championship necessary at all?

I believe that entertainment is also necessary. The Covid-19 situation is very hard for everyone, and often such events help everyone to keep up. Of course, I would have liked a million tourists in the city, crowded hotels and restaurants. But it is what it is. Why is it interesting for Riga? Of course, I am interested in international audience that I can address through the championship. It is a billion of spectators from the countries we are most interested in - Scandinavia. Central Europe. We can tell through this championship that Latvia is still a place that is expecting them, that we are an interesting destination for tourists - a beautiful city, interesting for investments.

When starting to form the coalition, you promised more active cooperation with the opposition. Now the opposition is complaining that you are not taking their proposals into account and cooperation is just a promise that has not been met.

What I can promise to the opposition and what has been done is that decision making takes place in commissions and committees. I do not go the path taken by the previous city council when the decisions were made in a narrow circle, in the mayor’s office, and lawmakers were just voting machines. The opposition has all the opportunities to work in committees and commissions, and the proportion there is exactly as it was in the elections.

What is the biggest challenge for the Riga City Council this year?

It is the same as for the whole country - Covid-19. It is also the biggest challenge in the budget. We cannot work for long in this regime, increasing costs all the time. It is clear that we cannot run empty public transport and continue to sustain huge losses. It is the task of the government, the Riga City Council and other local governments to overcome this Covid-19 challenge.