Municipal accounts, 1999

The investment level is extremely high and an increasingly higher share of investments is financed by loans. Deficits before loans increased from NOK 5.3 billion in 1998 to NOK 7.7 billion in 1999.

Towards leaner times

The net operating result for the municipalities was considerably weaker in 1999 than what has previously been the case in the 1990s. 1994 and 1997 were the best years with just over NOK 7.5 billion in net operating surplus, but after 1997 the surplus has been cut almost in half every year until 1999, which is clearly the worst result of the 1990s. In 1999 the net operating surplus constituted only 1.7 per cent of operating revenues, while in 1997 it made up 5.4 per cent.

Worst off

Worst off were municipalities in Møre og Romsdal and Vest-Agder counties, which recorded a net operating deficit of NOK 52 and 9 million, respectively. In 1999, neither of these counties was able to release any funds for investments or allocations for later use.

Diminished freedom of action

Deficits before loans and allocations increased more from 1998 to 1999. In 1998 the deficit totalled NOK 5.3 billion, while in 1999 it was NOK 7.7 billion. This is due to an increase in gross investment expenditure of just over 13 per cent or just over NOK 2 billion, and a reduction in the net operating result. Consequently, more than 60 per cent of investments are financed with the use of loans, while previously saved funds look to cover an increasingly smaller portion of investments.

Oslo losing ground too

The situation has changed significantly from 1998 to 1999 for the City of Oslo. The net operating surplus fell from just over NOK 1.6 billion in 1998 to only NOK 90 million in 1999. While net operating surplus amounted to 6.1 per cent of operating revenues in 1998, it accounted for only 0.3 per cent in 1999. The almost NOK 2 billion increase in operating expenditure and minimal increase in operating revenues accounted for most of the reduction in the net operating surplus. The NOK 436 million or nearly 100 per cent increase in interest income from 1998 to 1999 prevented a net operating deficit.

The decline in the net operating surplus combined with huge investments caused a reversal of 1998s NOK 674 million surplus before loans into a deficit before loans of about NOK 2.3 billion in 1999.

Balance sheet

The municipalities increased their working capital by just over 10 per cent or about 1.6 billion from 1998 to 1999. Long-term liabilities increased at the same time to about 10 per cent or about NOK 7.7 billion.

The lack of a connection between the change in the net liabilities from 1998 to 1999 and municipal deficit is mainly because of the writing up of assets in the form of shares and loans in connection with the restructuring and merger of municipal power plants. The following power plants/energy companies are the reason for the increase in assets: Bergenshalvøens kommunale kraftselskap AS, Lyse Energi AS, Trondheim Energiverk AS, TrønderEnergi AS, Skiensfjordens kommunale kraftselskap AS and Tafjord kraft AS.

About the basic statistics

The information is based on final accounting figures that Statistics Norway obtains from all municipalities. The accounting statistics for the individual municipalities are published in Regionalstatistikk 9/2000.

Municipal accounts are divided into operating, capital and balance sheet accounts. The operating account includes current expenditure and ordinary current income including loan payments. The capital account covers investment expenditure and financing of these through the use of loans and other sources.

108 municipalities have delivered accounts according to the trial KOSTRA (municipal reporting) regulations, and these have been converted to the current chart of accounts by Statistics Norway. The accounting statistics thus do not have the same quality nor are they completely comparable with the statistics for the other municipalities. Among other things, the trial KOSTRA chart of accounts entails an upward adjustment of real capital in the balance sheet.

Municipalities 0914 Tvedestrand, 1622 Agdenes and 1928 Torsken are represented with 1998 statistics.