City council adopts consolidation concept

Ten test fields

In accordance with the requirements of the government of Middle Franconia as the responsible legal supervisory authority, the concept focuses on ten audit areas. These include, among others

• The review of municipal tasks and organization,
• the consideration of tax rates and
• a further adjustment of budget planning and the use of municipal assets.

The concept bundles expenditure reduction measures that have already been implemented since summer 2024 and also identifies additional savings and revenue potential in the municipal operating budget amounting to 57.6 million euros by 2028.

Difficult financial situation for municipalities

The financial situation of local authorities in Bavaria remains challenging: significantly increased expenditure in the social and personnel sectors as well as high construction prices are making it difficult to draw up approvable budgets. In Erlangen, declining trade tax revenues in particular are exacerbating the situation. For 2024, the city originally expected revenue of 220 million euros - this actually amounted to just 71 million euros due to significant repayments. The treasury is also expecting significantly lower revenue for 2025 than initially forecast.

In order to react to the developments and stabilize the critical budget situation for the time being, a budget freeze was imposed in July 2024.

• Material resources were reduced by 7.8 million euros,
• investments were reduced by 6.3 million euros.

The draft budget for 2025 was revised again in September last year:

• Further cuts amounting to 9 million euros in material resources
• and 1.7 million euros in investments

were made.

Since October 2024, there has also been a six-month ban on reappointments in the city administration. Vacant positions will therefore remain unfilled for the time being - a measure that will save around 7.5 million euros annually. New positions will only be created this year in essential areas such as education and childcare. These will be fully financed by the reduction of jobs in other areas - with savings of a further 500,000 euros.

57.6 million euros in consolidation opportunities

The consolidation concept that has now been adopted goes beyond this: it provides for further consolidation opportunities amounting to 57.6 million euros for the period up to 2028. In addition to efficiency increases and standard reductions, the proposals also include additional revenue from fee and tax adjustments. In an intensive process, the city administration has identified savings and revenue potential of 64.3 million euros by 2028.

However, as the city council did not agree to all of the administration's proposals, the savings and revenue potential that has now been approved is 57.6 million. The larger items that were rejected by a majority include a return to the 2019 property tax level (revenue potential: €1.1 million per year). The reduction in additional subsidies to independent daycare providers for rent, building maintenance and equipment (potential savings: 675,500 euros per year from 2026) and the change in the childcare ratio in municipal facilities (potential savings of 500,000 euros for 2027 and 2028 respectively) were also rejected.

Standard reductions and process improvements

From 2026 to 2028, the agreed package is expected to generate an annual average of 17.1 million euros in improvements to the municipal budget through

• Standard reductions
• efficiency improvements and
• process optimizations

optimization. Standard reductions include, for example, the reduction of voluntary services such as the Active Card for volunteers. Furthermore, fee increases are planned - for example in the area of daycare centers, as well as admission prices to the city museum and fees for the city library. However, the consistent digitalization of administrative processes should also contribute to consolidation. Further job cuts and the reduction of voluntary employer benefits in the personnel area are also planned.

Cushioning the impact of savings

The administration is working hard to cushion the impact of savings. For example, an aid fund for associations and initiatives(www.erlangen.de/hilfsfonds) has been set up together with the community foundation. The Erlangen Job Center will take over the maintenance of the cargo bikes in future. Solutions for Christmas lighting are also being developed with the support of the local community.

Further procedure

The approved consolidation concept will now be submitted to the government of Middle Franconia for review. As the responsible legal supervisory authority, it will assess whether the concept is sufficient, particularly in light of the massive liquidity problems, to

• the restoration of an orderly budget and
• the ongoing ability to perform

and ensure its long-term viability. Among other things, it serves as the basis for the approval of investment loans for ongoing projects. Individual measures - such as fee increases or property sales - subsequently require further resolutions by the City Council.

The concept with the City Council's amendments can be accessed online:

Here: Budget consolidation concept after resolution by the city council on April 30, 2025

Here: Changes to the income budget following the City Council meeting on April 30, 2025

Further information on the City Council's deliberations can be found here.

There is also a report in the city newspaper "Rathausplatz 1 - May 2025 issue".