Faro council reported today that it already has the second tranche of its borrowing arranged under the Plan to Support the Local Economy (PAEL) government initiative.
The receipt of €3.3 million represents a further 20% of the council’s total facility of €16.7 million of which it already has drawn down 60%.
To stabilise the finances after the long and ultimately expensive leadership of Macário Correia, the municipality had to resort to short term bank loans of €5.7 million which have been repaid out of PAEL funds. This money was needed urgently to cover losses at Faro’s Municipal Market for 2007, 2008 and 2009.
The merger of Ambifaro and the Municipal Market, which was put forward in 2009, has now been approved by the Tribunal de Contas, according to the council today. The plan is to reduce administration staff by 50%.
In a statement, the council reported that the measure will increase the "efficiency of the use of financial resources" and add a "greater flexibility to the management of the treasury" and pledges that all front line employees at both companies will be kept on.
With the merger of Ambifaro (the company that allegedly engages in Faro’s economic development) and the Municipal Market, Faro council has halved the number of municipal companies since 2013. The Teatro das Figuras is now run directly by the council for example, leaving companies such as Fagar which is responsible for sanitation and cleaning.
The advantages in merging these council companies include reducing the number of overpaid directors running them, the elimination of a duplication of functions, the savings on statutory audits and the possibility of renegotiate contracts with suppliers.
The original intention when Correia ran the council was to have three companies running cash taking council services but a change in the law in 2012 forced a change in the control of the Teatro das Figuras so it returned to the council and a legal necessity to wind up or ingest any council run company that had made a loss over the past three years.
This is a positive move but the council needs also to accord with the government's latest edict that staff must be reduced by a further 3% next year.
