Radical wave of savings

Bad news! Klagenfurt is heading for bankruptcy

Harald Kogler and Peter Pilz from the Consolidation Advisory Board had bad news for the members of Klagenfurt City Council.

(Bild: Tragner Christian)

The financial situation in Klagenfurt is catastrophic. At the special municipal council, one piece of bad news followed another. Despite the twelfth budget, the financial hole is getting bigger and bigger, all figures are negative. 35 million euros are needed. Properties have to be sold, otherwise there is a risk of bankruptcy.

Klagenfurt does not have a debt problem, but the budgets for the next few years are extremely difficult to make. Personnel expenses have risen by 30 percent and there have been no structural measures for 25 years.

In order to secure liquidity, the earmarking for the indoor swimming pool loan of 50 million euros must be lifted. An indoor swimming pool is currently unaffordable anyway, unless a plan B is found that makes construction cheaper.

"Despite the twelfth budget, no money is coming in. The city also no longer has the opportunity to take out a loan," says finance department head Christoph Wutte. "It is currently impossible to draw up a budget. All decisions still have to be checked by the finance department to see whether the city can afford them in this precarious situation."

Klagenfurt is threatened with bankruptcy. The 45 municipal councillors had to hear how bad things really are from the consolidation advisory board in the town hall.

(Bild: Rojsek-Wiedergut Uta)

15 million from the municipal utilities?
Harald Kogler and Peter Pilz from the Consolidation Advisory Board gave the 45 councillors information in a double conference. "There will have to be cuts everywhere," Pilz made clear. "We need 35 million euros in revenue." As a wholly-owned subsidiary, Stadtwerke has so far paid a dividend of five million euros; this is set to increase to at least 15 million euros. This is because STW's profit in 2024 was still 38 million euros.

Properties are being sold
Land sales should bring in money. Areas that were held back for drinking water are also to be sold because they are not suitable for a drinking water supply anyway. "But there won't be any sales," says Pilz. Not much will be missing.

Staff will also have to be cut. In the town hall, 300 employees are to be cut over the next few years. Examples of how much an employee costs per year were presented at the municipal council meeting: 100 employees would cost six million euros.

"There will only be an improvement if the economy improves," says Harald Kogler, "but that won't be the case for another three to four years." The new conference center, in which the city is contributing five million euros, was also discussed.

Appointment with the head of the state on March 20
A budget is probably not feasible before the summer, when a double budget is to be adopted. The Consolidation Advisory Board will talk to the parties on Friday, the next meeting with Governor Peter Kaiser will not take place until March 20. Funding must be renegotiated, otherwise the first provincial capital will go bankrupt. This is because the revenue share from the federal government to Klagenfurt is decreasing every year, while the city's transfer payments to the state are nevertheless increasing.

Structural reform decided
At least the first structural reform had already been decided beforehand with a circular resolution among the parties. The departments will be reduced from 22 to twelve and many areas in the town hall will be merged. The city is also diligently preparing for the wave of retirements. The structural reform, which was also checked with the consolidation advisory board, will generate three million euros. The city can make good use of this.