The story of siphoning public funds into the pockets of public officials in Tivat over the last three years
Municipality of Tivat spent more than 2,5 million for “resolving housing issues“ of local officials in past 3 years, during the mandate of the DPS-SD-HGI coalition, through budget payments, tax deductions and donations of municipal property.
The data we obtained by analysing the activities of the current Tivat authorities in implementing controversial housing policies, showed that local government officials have privileges that are unthinkable to all other citizens.
NGO Institute Alternative filed a initiative to Constitutional Court to review the constitutionality of the provisions of the Law of Maintenance of Residential Buildings, which is used by the Government and municipalities as a legal basis for resolving housing issues of public administration officers.
Information about loans and housing allocation from public funds to well-off public officials on extremely favourable terms have caused a public outrage in recent days.
Tivat municipality treated twelve of its employees, who were the last to take this opportunity, with a total of 69,263 of budget funds.
That is a total amount that was waived of the loan amounting 89.998,50 euro, disbursed at the end of 2018 when the Housing Commission of Tivat determined the ranking list from the last year’s call for applications.
Chief of Cabinet hides names
Using the Law on Free Access to Information, Vijesti got contracts signed by the Mayor on December 28, 2018 with 12 local officials who have been granted “housing improvement” loans from the office of the Mayor, Siniša Kusovac (DPS).
Individually, loans ranged between 4.084 do 9.911 euro. However, thanks to the ,,Directive of the housing needs of officials and employees of local government of the Municipality of Tivat”, beneficiaries of the loans have been waived an amount of up to 80%, meaning that all of them will pay back a total of 20.737 euro to Municipality.
Loans were granted on the from five to ten years with symbolic monthly payment unthinkable at any commercial bank – from 11,28 to a maximum of 35,8 euro per month.
Chief of Cabinet, Blaženka Pajović (DPS), has hidden from contracts on loans submitted to ”Vijesti” all the names of loan recipients and even information on their job position in municipality of Tivat.
In phone interview with the reporter, Pajović remained persistent in her interpretation that in this case even the names of public officials received thousands of citizens’ money should be “protected personal information because why should anyone know which specific public official took the loan“.
She stuck to this interpretation even after being warned that it was evident from certain contracts that loans were also granted to secretaries or senior managers of the municipality, which are obliged to report such changes of property more than 5000 euro in their asset declaration by the Law on Prevention of Corruption.
Kusovac and Matijević got their loans waived
Current local government in Tivat, whose term in office started in May 2016, did not grant housing loans to lower-ranked employees until this latest case. However, at the end of 2017, former mayor Snežana Matijević (DPS) and Siniša Kusovac, then vice president, were literally gifted with public money loans.
Together, they received a total of 83,000 euro from the city budget for “improving housing conditions”. Kusovac received 52,000 euros while Matijević got 31,000.
Its formaly a “loan” granted to them by “Announcement for Housing Needs of a Person Elected or Named by the Municipal parliament and mayor and other persons whose work is of particular interest to the municipality “. Out of the granted sum, Kusovac will only return one fifth, or 14,560 euro, in the next 20 years, while Matijević has 10 years to return only 6,735 euro.
Kusovac’s monthly payments amount to 60,66 euro, while Matijević is paying 67,30 euro per month.
With such loan arrangement, these two were gifted with a total of 61,705 euro of Tivat citizens’ money.
Shortly after two Tivat officials received money, “Vijesti” received documentation showing that it is Kusovac’s loan was granted contrary to regulations. In 1999, he was already granted a city lot of 533 square meters in Seljanovo to build a family home, under favourable conditions – symbolic fee of 2,542 euro and deferred payment for five years.
Although he was not entitled to do so before the expiry of the five year term, according to the decision of Tivat municipality on August 1999, Kusovac sold the lot and the unbuilt house of 150m2 for 40,000 euro, or 16 times bigger price he had to pay to the Municipality of Tivat, after three an a half years, in March of 2003.
Afterwards, current Mayor of Tivat owned or co-owned three apartments in Tivat for years. They than vanished from his asset declarations in 2015.
Then he submitted two fictional contracts at the end of 2017 about alleged co-construction of an apartment building in Pod Kuk, in which he owns two apartments for ten years, and the alleged “buy-in-construction” apartment of 80m2 in that building, which was the base for the municipality to grant him a new “housing loan” of 52,000 euro.
Kusovac afterwards said he will not resign because of that scandal, indirectly stating that there was nothing illegal in what he did.
“I have no intention to resign. Resignation is not submitted because personal wishes of some reporters but only on the basis of the facts determined by the competent institutions. If I did something wrong let the institutions do their job”, the Mayor said, asking that the reporter who broke the story to “quit journalism for violation of the Law on Personal Data Protection “.
Tivat municipality did not give up on controversial practice of preferential loans from municipality budget, although the data shows that those who receive them do not return the money as planned. According to the final budget statement for the year 2018, the municipality received less than 50 percent of the planned 17,000 euro “income from repayment of loans to individuals“, or 8,482.35 euro.
Previous year, planned revenue of 17,000 euro was also not realised, but the realisation was slightly better as 10,884 euro (64.02 percent) was collected.
Current situation is even worse because for the first six months of 2019, 4,445 euro was paid on this basis, or only 26.1 percent of the total planned income of 17,000 euro for 2019 on repayment of loans to individuals.
When the local government started their term in office in May 2016, total planned income from repayment of loans to individuals for that year was even exceeded by 26 percent, because instead of the estimated 10,000 euro, 12,655 was received.
More then 2,3 million for resolving housing needs in Seljanovo
First year of local government in Tivat was remembered as the one when most money was spent to resolve housing needs of local officials.
In August 2016, mayor Snežana Matijević gave keys to the recipients of the newly built apartments in two residential buildings in Seljanovo, built by the municipality in partnership with the Montenegrin Solidarity Housing Fund. In two five-storey residential buildings with a total net surface of 8,767 square meters, 140 apartments were made, of which 107 belonged to the Municipality of Tivat and its public enterprises and institutions.
She then stated that the “the municipality of Tivat has invested cadastral parcels on Seljanovo, on the site of former Swedish barracks, with a total area of 5,570 square meters, with total market value of 1.671.000 euro. Municipality of Tivat supported the project by not charging utility bills with total value of 657.444 euro“.
This means that through this project alone, the Municipality of Tivat spent 2,328,444 euro of property and assets, which belong to all residents of the city.
Such a “financial injection” enabled the Montenegrin Solidarity Housing Fund, from whom they purchased the apartments, to sell them to buyers at a drastically reduced price of only 790 euro per square meter. According to the public statement made by its president of Board of Directors, Danilo Popović, those who received apartments in that block earned 7 million, calculating the difference to the full market price.
This investment by the municipality in construction of 140 “apartments of solidarity” in Seljanovo three years ago turned into a scandal, because many local officials resolved their “housing needs” there for the second or third time.
These apartments, paid through the long-term loans at extremely subsidised prices, much lower then market ones because of poor legislation in this area, have also been granted to a number of municipal officials who already had solved their housing needs earlier.
Afterwards they sold or rented their new cheap real estate.
Despite this experience in Seljanovo, Tivat’s DPS-SD-HGI authority is not giving up on this controversial practice of wasting municipal resources for housing its public officials. Mayor Kusovac’s administration prepared the “Proposal of Decision on initiation of the procedure for construction of residential buildings” for the upcoming session of the local parliament on August 20th, according to which it will have four urban plots owned by the Municipality with total area of 2,435m2 in the scope of Mažina area, to build residential buildings “in order to solve housing needs of: local officials with permanent employment in the municipality; local officials according to the Law on Local Self-Government; those named by the mayor and directors of public institutions and enterprises in which the municipality owns 100%“.
Municipality intends to implement this under a joint venture system with an interested partner an investor who will receive a free lot, completed and revised project documentation for the facilities, free construction supervision services and no utilities bills.
In return, the partner will give the municipality an adequate number of apartments for its officials and employees in the new buildings with the total area of 3,113 square meters.
Considering the value of land and utilities, this means that Municipality of Tivat will spend more than another million euro for housing its employees.
Author: Siniša Luković
This article was prepared within the project ‘’Money Watch – Civil Society Guarding the Budget!’’ that is implemented in partnership with Institute of Public Finance from Zagreb and NGO New Horizon from Ulcinj. The project is financially supported by the European Union and co-financed by the Ministry of Public Administration of Montenegro.