On 28 December 2015, the Mayor of Tbilisi, Davit Narmania, presented his annual working report (from August 2014 to August 2015) to representatives of international organisations and NGOs. On the same day, as a guest of the talk show, Maestros Factori,

on air on Maestro TV, Mayor Narmania spoke about several pressing issues for the capital, including the 2016 budget and Tbilisi City Hall administrative expenses. Mr Narmania stated: "Administrative expenses have been decreased by GEL 2 million in next year’s budget. Additionally, funds for salary supplements have been lowered by 20%. Therefore, we resolved to continue the policy of ‘tightening our belts.’ Thus, the talk from our opponents about bonuses is truly an artificial controversy which has nothing in common with reality."

Administrative expenses are detailed in the budget lines for labour remuneration and the purchasing of goods and services. On 26 December 2015, Tbilisi City Council adopted the amended version of the 2016 Tbilisi City Hall budget.

Table 1:

Labour Remuneration of Tbilisi City Council, Tbilisi City Hall Administration, City Services and District Administrations in 2015-2016 (GEL thousand)

Labour Remuneration Tbilisi City Council Tbilisi City Hall Administration City Services District Administrations Total
2015 Plan 6,865.4 5,126.1 17,531 13,962 43,485
2016 Project 6,865.4 5,837.1 19,722 16,250.7 48,675.2
Difference 0 711 2 191 2,288.7 5,190

According to the 2016 draft budget (before it was amended), the budget line for labour remuneration had already increased by GEL 6.9 million as compared to 2015 (FactCheck has already written

about this topic).The amount of labour remuneration was cut by GEL 1.7 million in the amended version of the 2016 budget as compared to the initial draft. Thus, as compared to 2015, funds for labour remuneration will be increased by GEL 5.2 million instead of GEL 6.9 million.

In regard to the budget line for goods and services, its funding for 2015-2016 is as follows:

Table 2:

 Goods and Services Purchase for Tbilisi City Council, Tbilisi City Hall Administration, City Services and District Administrations in 2015-2016 (GEL thousand)

Goods and Services Tbilisi City Council Tbilisi City Hall Administration City Services District Administrations Total
2015 Plan 6,718.4 7,362.9 1,259.9 4,094.9 19,436.1
2016 Project 6,240.1 8,348.6 1,170 3,406.2 19,164.9
Difference -478.3 985.7 -89.9 -688.7 -271.2

As illustrated by the table, funding for goods and services has been decreased for every structure except Tbilisi City Hall Administration according to the 2016 budget with the total decrease comprising GEL 271,200 as compared to 2015.

As we have mentioned before, administrative expenses are detailed in the budget lines for labour remuneration and the purchase of goods and services. According to the 2016 Tbilisi budget, the amount of money allocated for labour remuneration has increased by GEL 5.2 million whilst the amount of money allocated for the purchase of goods and services has decreased by GEL 271,200. Therefore, administrative expenses have increased by GEL 4.9 million (8%) according to the 2016 budgetas compared to 2015 and amount to GEL 67.8 million.

FactCheck

also verified the part of the Tbilisi budget which is spent on administrative expenses (expenses for LEPLs and NCLEs are not included). In 2016, administrative expenses will constitute 11.9% of the total expenses. In 2015, administrative expenses constituted 9.6% of the total expenses. Therefore, the amount of administrative expenses as part of the total expenses has increased by 2.3% in 2016 as compared to 2015.

In regard to bonuses and salary supplements, according to Ordinance N422 of the Government of Georgia issued on 6 March 2015, the bonus fund was decreased by 20% in order to manage the budget deficit. Institutions under state funding were given the task to limit their administrative expenses as envisaged by the aforementioned ordinance in the planning of their 2016 and 2017 budgets. The priorities of the Tbilisi budget (p. 13) underline that the amount of the holiday bonus fund for Tbilisi City Hall Administration, City Services and District Administrations decreased by 20%,amounting to GEL 1,548,000, as compared to the initial budget draft. Indeed, the budget line for the amount of money allocated for labour remuneration decreased by GEL 1.7 million according to the amended version of the Tbilisi budget although it still increased by GEL 5.2 million as compared to the amount of money for labour remuneration in 2015.

As a matter of fact, administrative expenses are increased in 2016 as compared to 2015. Additionally, the amount of money allocated for labour remuneration (according to the Labour Code of Georgia, an employee’s labour remuneration includes a salary, bonus and salary supplement as envisaged by the law) has also increased. However, we could not make a straightforward conclusion as to exactly how much the funds allocated for bonuses and salary supplements increased or decreased.

Conclusion

According to the adopted 2016 Tbilisi budget, administrative expenses in 2016 have been increased by GEL 4.9 million as compared to 2015. According to the initial draft of the 2016 Tbilisi budget, administrative expenses were planned to increase by GEL 6.5 million in 2016 as compared to 2015 (therefore, according to the amended version of the 2016 Tbilisi budget, administrative expenses have dropped by GEL 1.6 million as compared to the initial draft of the budget). According to the 2016 Tbilisi budget, the amount of money allocated for labour remuneration has increased by GEL 5.2 million as compared to 2015.

In his remarks about administrative expenses, Davit Narmania made a comparison between the two drafts of the budget and, based upon this, stated that administrative expenses were decreased. However, it was left beyond his attention that as compared to 2015, expenses have still increased. Therefore, FactCheck concludes that the statement of the Mayor of Tbilisi is MOSTLY FALSE.

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