When we called, Mayor Birgitte Julla Loken was sitting in the car on her way to tonight's city council meeting. She does not hide the fact that she is very satisfied:
– When I took office as mayor last fall, we were heading towards an operating deficit amounting to tens of millions of kroner. Since then, the administration has done its best to reorganize itself. “I read every ITF report with enthusiasm and realized that it had done a very good job, but we only realized the result today,” says Jula Lokken.
225 million is better than budget
The result of unaudited accounts shows that the municipality achieved positive net operating profits of approximately NOK 73 million. The municipality states that this amount is NOK 225 million better than budgeted.
There are several reasons for the large discrepancies between budget and result. The municipality received additional income from taxes, as well as a dividend of NOK 64 million from the municipality's core task fund.
This is the basic quest chest
The core mission fund consists of income received by the municipality from the sale of shares in Vestfold Kraft, Larvik and Laerdal Elverk at the turn of the millennium. Sales revenue originally amounted to approximately NOK 1.2 billion.
The Core Mission Fund has made a good return and has left the municipality at a loss.
Later, approximately NOK 700 million was withdrawn from the fund to pay off the debts of the Bolgen Cultural Center, the free purchase of Indre havn and investments in the arena. The municipal council has adopted a management strategy, and the fund is managed by a board of directors consisting of three people appointed by the municipal council.
At the beginning of 2022, there was NOK 992,287 million in the Core Task Fund.
Source: Larvik Municipality
– Administration
However, the mayor believes that the progressive budget can be summed up in one word:
– Administration. They should be proud of this! Employees are in the midst of an aggressive restructuring process and are restructuring the business every day. Not only are they standing ready to maintain budgets, they are now showing that they have a real will to succeed in this change.
– What do we know that is required for employees?
– Yes, so they should be credited for it as well. We've come up with a tough budget, but the staff says, “We'll get this done.” My wish is that they release more of these mods. She says more such tours should be launched in the long term.
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Towards a sustainable economy
Gula Lokken says she is fully aware that the work of adjustment is painful and demanding for many, but she hopes that a positive outcome will point the way towards a simpler daily life:
She adds that continuous restructuring is not good, but the work must continue, and the municipal council as a whole must continue to work in order to achieve a sustainable economy in the municipality.
She assures that the money will not be spent on nonsense.
– It will not be difficult to spend money, but of course it must be done responsibly. I would caution that we should feel the nouveau riche, and I would caution against spending on fixed costs. She says restructuring must continue, and I expect there will be a discussion about how to use the surplus in the best way possible.
She thinks it might be natural to have a financial reserve, for example when facing snowy winters like the one we are experiencing now.
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– It can turn the other way
Mayor Gro Herrheim is proud of the cooperation between politicians and the administration, but warns that a positive result can also backfire.
– Next year it could quickly turn the other way. Financial market developments may result in money losses, or we may receive lower tax revenues. But the surplus of NOK 73 million gives us a more solid starting point to self-finance a larger portion of investments, so that debt does not grow. “So it's good for the process, but it doesn't change the situation or our need for restructuring,” Herheim wrote in a press release.
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