Sharp decline in cities in deficit

Ashdod most financially stable municipality, Ra'anana the most efficient.

raanana 88 298 (photo credit: Courtesy)
raanana 88 298
(photo credit: Courtesy)
The number of local authorities with budget deficits last year fell sharply from 2004 levels, but nearly half remained in the red in 2005, Business Data Israel reported on Sunday. According to BDI's local authority and municipality ratings index, which is based on the respective data accumulated from 2005 audits, the city of Ashdod had moved to the top of the rankings as the country's most financially stable municipality in 2005 ahead of Holon, which had been the leader in the previous two years. Economists at BDI who conducted the annual survey, which rated the financial standing of 250 local authorities and municipalities, found that Ashdod had significantly improved its financial situation, moving up from number four in BDI's rating for 2004 to number one in 2005. Rishon LeZion, which was ranked second place, and Ashdod were not only the country's two most financially stable municipalities, but they also had the highest budget surpluses in 2005, in absolute terms, the study found. Rounding out the top 10 municipalities were Holon taking third place, followed by Ramat Gan, Ashkelon, Herzlya, Modi'in, Tel Aviv, Netanya and Kfar Saba. Among the local authorities, the three top financially stable were Kfar Shmaryahu, Savion and Ramat Hanegev, respectively, maintaining their rankings for the third consecutive year. Overall, 48% of municipalities and local authorities were operating with budget deficits in 2005, down from 76% in 2004. An additional measure of BDI's financial standing index of municipalities and local authorities rates the efficiency of local authorities and municipalities in providing services with a minimum amount of resources. In the efficiency index, Ra'anana was ranked as the most efficient municipality in 2005 - rising from second place the previous year - although it was ranked 11th in the financial standing index. Tel Aviv improved on the efficiency index from fifth place in 2004 to second place last year, followed by Herzliya in third place, Holon in fourth place, and Ashdod, which progressed to fifth place from 14th place in 2004. Eilat, fell deeply from leading the efficiency index in 2004 to ninth place in 2005. Among the local authorities, the Upper Galilee moved up to the top on the efficiency index from second place previously, followed by Ramat Hanegev, Hof Carmel and Kfar Shmaryahu in fourth place.