Financing of Centralization
This page was translated from German using artificial intelligence. The translation may contain errors or inaccuracies. In case of doubt, the German original version prevails.
Centralization costs money – but it saves in the long term. Operating multiple locations is expensive. Centralized administration reduces rent, energy, and maintenance costs.
The financing of centralization is based on solid and long-term sustainable pillars. The goal is to avoid jeopardizing the economic performance of the district while creating a modern administration for the coming decades.
Costs
With the decision of the district council on 26.03.2026, it was decided that only the first construction phase should be implemented. Construction phases two and three were canceled.
Additionally, the district council agreed to a central point from the coalition agreement of CDU and SPD: The costs for centralization are to be capped at 90 million euros. Furthermore, the architectural firm is to work on additional cost-saving proposals.
Sources of Financing
- No long-term loans from the capital market.
- Temporary withdrawal from the pension reserve.
- Use of fixed-interest securities as liquid assets.
The district administration grants itself an internal loan from existing assets or liquidity.
For this, the payment into the pension reserve will be suspended for 10 years, foregoing the annual contribution of an average of 7.5 million euros per year.
Additionally, approximately 20 million euros of soon-to-mature securities from the current pension reserve (approximately 112 million euros) will be utilized.
The repayment of the loan is planned as follows:
- Starting in 2030, with the completion of the construction project, the annual depreciation of approximately 1.5 million euros will be used to replenish the pension reserve over 60 years.
- Furthermore, starting in 2035, the contributions to the pension reserve will resume in line with the annually required pension provisions.
What are the impacts of this financing model?
- District Levy: The burden on the district levy is to be kept as low as possible, which is why no long-term loans will be taken from the capital market.
- Depreciation: The annual depreciation of 1.54 million euros will be covered in the short, medium, and long term by savings in rent and operating costs.
- Pension Reserve: The pension reserve will not grow for 10 years.
- In summary: The savings achieved through reduced rent, energy costs, etc. (as mentioned above) mean that the construction project will not result in additional burdens on the district levy or the citizens! On the contrary: the burdens will decrease, as depreciation will remain constant over the next 60 years, while rents are expected to rise.
What about the pensions of civil servants?
- Pensions will continue to be paid; nothing changes here!
- The voluntary pension reserve will not grow for ten years.
- Starting in the 11th year, the reserve will be replenished again.
