Reykjavík reports 5.5 billion króna first-half deficit

Reykjavík’s consolidated operations recorded a deficit of 5.5 billion krónur in the first six months of the year, according to mbl.is. The result was 12.2 billion krónur worse than the previous city administration had budgeted, which had forecast a surplus of 6.7 billion krónur.

The city council executive committee approved the interim financial statements on Thursday. The result was also 10.6 billion krónur worse than during the same period last year.

“The position shown in the accounts for the first six months reflects the serious situation in the city’s operations and explains why we are undertaking a major efficiency effort,” Mayor Hildur Björnsdóttir told Morgunblaðið. “We need to put the city’s operations in order, reduce waste and increase efficiency, but the ultimate goal is always to improve services for the city’s residents.”

The city treasury recorded a 3.2 billion króna operating deficit in the first half of the year.

The operating result before financial items and depreciation was positive by 34.7 billion krónur, an improvement of about 7.8 billion krónur from the first six months of last year.

Wage costs increased by 2.7 billion krónur year on year, which the city attributed to pay rises.

Depreciation was 2 billion krónur higher than budgeted. The city said this was mainly due to additional depreciation on properties scheduled for demolition and projects that had been abandoned, including construction of a seal pool at the Family Park and Zoo and the transfer of nursing homes jointly owned by the state and the city to the state.