Cyprus Mail
Business Cyprus

Agios Dometios in dire straits, but don’t bet on the horses

File photo

By Constantinos Psillides

TROUBLE is brewing at the Agios Dometios municipality, as it can no longer afford to pay its 75 employees, according to mayor Costas Petrou.

He told the Cyprus Mail that the municipality will have to let employees go or proceed with drastic salary cuts. “We can’t cope. Our revenue has been severely decreased and combined with the cuts in state funding lead us to a dire situation,” the mayor said, adding that drastic measures are called for.

“Despite austerity measures we haven’t touched anyone’s salary or fired anyone. Now, it seems that we may be forced to do that,” he said.

Agios Dometios’ main source of revenue has been state funding, that peaked at €2.8m in 2008 and its €1.1m share of the betting from the island’s only race course.

Although 2008 was a peak year for revenue, it was downhill from there on.

“In 2013 we received a million less in state funding due to austerity measures and our share from the racehorse betting was only €466,000. Overall, a 20 per cent cut in revenue which brought us to our limits. We can’t take any more reductions,” Petrou said.

The mayor told the Cyprus Mail that he is struggling to find the means to pay employees for April. He will host a press conference on Monday where he is expected to ask for an increase in the share of horse racing betting.

But the Nicosia Race Club (NRC) has problems of its own. NRC manager George Hadjiminas told the Cyprus Mail that since the financial crisis hit, racehorse betting was also down by €10m. “It’s tough times for everyone. Every one is trying to manage the crisis and I don’t think is proper for the municipality to shift the blame on us. We already let 29 people go and reduced wages by 25-42 per cent for everyone. The racetrack is on the brink and in need of state support or else the municipality stands to lose the hen that lays golden eggs,” said Hadjiminas.

The municipality also asked of the workers unions to come up with a plan of reducing working hours along with a voluntary exit scheme, as well as the suspension of payment on the employee’s provident fund, the pension fund and the health care fund.

Most of the 39 municipalities around the island are cutting back on work hours and coming up with voluntary exit schemes.

In January, a report by UK experts suggested the current number of local authorities be reduced to a mere five, which should be aligned with the geographical boundaries of existing district offices.

The report, commissioned by the Cyprus government as part of its effort to modernise the public sector and prepared by the National School of Government International (NSGI), sought to “provide feasible options for improvement, reorganisation and restructuring of the Cypriot local government.”

The NSGI identified the absence of a culture of performance management, a lack of transparency, and tight control of finances by the central government.

The NSGI labeled the status quo as “not an option.”

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