After a 1st supplementary budget and business plan for EB 85 had already been initiated for the short-term implementation of the "Grundschule Nord" measure, which is a particular priority, this 2nd supplementary budget and business plan for EB 85 also include all other significant changes compared to the original 2021/2022 double budget plan. These are primarily characterized by the ongoing COVID-19 pandemic, refugee migration due to the war in Ukraine, changes in municipal financial equalization and the implementation of the supplementary staffing plan. The addendum only considers the planning year 2022. The medium-term financial planning from 2023 onwards will only be adjusted with the upcoming budget planning for 2023/2024.

Income budget
Even before the outbreak of the war in Ukraine, the administration had already identified key items for a supplementary budget in order to reflect current developments, such as the ongoing COVID-19 pandemic in 2022. This resulted in a deterioration in the deficit in the income budget compared to the 1st supplementary budget of € 47,346 thousand by a total of € 5,890 thousand to € 54,036 thousand. In addition to the € 599 thousand deterioration due to COVID-19, the following items are particularly noteworthy:

- The costs for the management of the apartments purchased as part of Pillar II of the structural aid package and the increased own contribution to the outdoor pool Stadtbad Salzgitter-Lebenstedt are budgeted (€737 thousand). The own contributions from funding programs for inner city development (€ 805 thousand) and the basic renewal of the fire department's service and protective clothing (€ 450 thousand) are also newly planned. Due to the discontinuation of the state subsidy in accordance with Section 5 of the Lower Saxony Act on the Implementation of the Second Book of the Social Code and Section 6b of the Federal Child Benefit Act (Nds. AG SGB II), social welfare benefits must be adjusted by €1,245 thousand.

- This is offset by an improvement in general cover funds, primarily due to the adjustment of the trade tax rate to the increased order level of 15.02.2022 (€ 1,221 thousand).

- In addition, the supplementary staffing plan, which focuses on a wide range of service areas, will result in a significant deterioration in the earnings budget of € 3,084 thousand. However, the new positions are urgently needed to cope with the many current tasks and challenges (refugee migration, integration, urban development, pandemic, digitalization, census, etc.).

It was not until 29.03.2022 that the State Office for Statistics in Lower Saxony (LSN) announced the changed key allocation amounts as part of the financial equalization and confirmed them with the notification of 07.04.2022, which resulted in an improvement of €16,671 thousand for the city of Salzgitter compared to the previous assumptions. This represents a considerable relief for the budget and improves the shortfall to € 37,365 thousand compared to the € 54,036 thousand previously calculated for the supplement.

Furthermore, the earnings subsidy for the rental of the interim solution for the Grundschule Nord measure, which was included in the 1st addendum (€ 800 thousand), can be planned out again in the 2nd addendum, as EB 85 can provide internal cover in the 2nd addendum budget. In addition, a further € 100 thousand must be budgeted for housing management as part of the € 50 million structural aid. Together, however, this results in a further improvement in the shortfall of € 700 thousand to € 36,665 thousand.

While declining refugee payments and corresponding cost decreases had been reported at the beginning of the supplementary surveys, the refugee migration as a result of the war in Ukraine naturally changed these developments abruptly. A review of the impact revealed a deterioration in the result of € 2,999 thousand.

The current shortfall in the 2022 earnings budget amounts to €39,664 thousand and is therefore €7,682 thousand lower than the shortfall of €47,346 thousand originally planned for 2022 in the 2021/22 double budget.

The current situation shows that municipal budgets are being significantly burdened by the financing of refugee migration waves. Accordingly, the city of Salzgitter is continuing the model offsetting of refugee costs totaling €20,893 thousand in the budget protection concept and renews the demand for full cost reimbursement in the context of refugee migration and subsequent integration.

The offsetting of the costs of € 606 thousand due to the COVID-19 pandemic and the slump in trade tax due to COVID-19 and the industrial transformation processes that are shaping the region (€ 25,704 thousand) will also be continued. The principle of connectivity applies to these areas: tasks that are delegated to the municipalities by the state and federal government must also be paid for in full. Even if the adjustment of the financial equalization is a step in the right direction, a massive uncovered deficit remains. With full cost equalization, the shortfall for 2022 of € -39,664 thousand would turn into a surplus of € +5,268 thousand. The budget would be balanced again.

Investments
In terms of investments, the core administration's borrowing requirements will only increase by € 228 thousand. The credit authorization for Eigenbetrieb 85 remains the same despite the postponement of measures for KiTa Brotweg from the € 50 million structural aid package to the integration fund, meaning that the total credit authorization increases from € 14,869 thousand to € 15,096 thousand.

In detail, the changes result from the following core administration items: the increased own contribution for the outdoor pool at the Salzgitter-Lebenstedt Stadtbad is planned (€ 404 thousand). The own shares of federal and EU-funded inner city development projects (€ 134 thousand) are also newly planned. The furnishing of the first section of the northern elementary school requires €100 thousand. The reclassification of the post and scanning office from the in-house operation 85 to the Digital and IT department will result in purchases of € 5 thousand. The so-called Mobility Master Plan requires an own contribution of € 30 thousand. Investment grants of € 125 thousand are planned for the establishment of medical practices. In addition, the investment-related contribution increases by € 166 thousand as part of the increased municipal financial equalization (KFA). This is offset by the planning of own contributions for the "Stadion" and "Amselstieg" measures totaling € 736 thousand.

Business plan of EB 85
The business plan of EB 85 must be adjusted to the current circumstances. The following significant changes were made:

Due to the organizational decree "Relocation of the area of responsibility of the post and scanning office from EB 85 to FD 15 with effect from 01.07.2021" dated 21.06.2021, the changes resulting from this decree in the business plan of EB 85 for 2022 are included in the addendum.

In addition, the decision on the structural aid program and internal coverage for the interim solution for the Grundschule Nord measure will be included in the business plan. In addition to these changes, the measures for the accommodation of displaced persons from Ukraine will also be included in the supplementary business plan.

The Pillar I measures of the € 50 million structural aid package from 2020 may not be awarded as part of a total contractor tender, as originally planned. The recalculation as an individual tender at current market conditions has now resulted in massive additional costs totaling around €18,300 thousand due to rising inflation and the steady increase in construction costs.

Furthermore, the new construction of the Brotweg daycare center, for which funding from the Integration Fund 2022 has been applied for in 2022, will therefore result in a cost increase of € 2,600 thousand.

The aforementioned developments affect other ongoing measures such as the expansion of the Ringelheim and Dürerring elementary school, the renovation of the auditorium at Am Fredenberg secondary school and the construction of the new Fredenberg West daycare center.

The medium-term financial planning in the business plan of EB 85 must be adjusted to the current investment situation in order to be able to submit the corresponding applications to the funding bodies and not jeopardize the further implementation of the construction measures, some of which have already begun.

Accordingly, commitment appropriations must be taken into account for 2022. The additional costs are not subsidized and can only be compensated for by increasing the credit authorization in the medium term. In 2023, € 2,569 thousand is planned, in 2024 € 16,182 thousand and in 2025 a further € 9,335 thousand. In the planning period from 2022 to 2025, this will turn the previously planned debt reduction of around € 10,000 thousand into net new debt of around € 14,000 thousand.

The Ministry of the Interior and Sport had combined the two supplements in one approval procedure due to their proximity in terms of timing and content. Following the joint approval of the municipal supervisory authority on 30.09.2022, the supplementary budgets were published in the Amtsblatt on 11.10.2022 and were subsequently on public display from 12.10.2022 to 20.10.2022. The budgets thus became effective on 21.10.2022.