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Adjustment in the Municipal Efficiency Program is approved by City Council in Rio Branco
Last Monday (22), the City Council of Rio Branco approved an adjustment to the complementary law project N° 265, dated December 14, 2023, which authorizes the municipality to contract a credit of R$ 140 million with the Bank of Brazil, through the "Municipal Efficiency" Program.
The proposal was approved by 10 votes in favor and 1 against. Councilwoman Elzinha Mendonça (PSB) opposed the proposal.
In December of last year, the project had already been approved, but a change in the loan law prevented the funds from being released. The vote is a modification of the law to comply with the conditions required by the National Tax System (STN).
Changes in the Loan Law
The President of the City Council, Councilman Raimundo Neném (PSB), emphasizes that the adjustment is necessary due to the approval of Constitutional Amendment N° 132, dated December 20, 2023, which allows 1% of the Municipality's Participation Fund (FPM) to be retained in case of default.
"The amendment was approved after the authorization for the loan was granted, therefore, the vote is a modification of the law to comply with the conditions required by the National Tax System (STN). As explained by the Secretary of Administration, Jonathan Santiago, this is not a counteroffer, but a guarantee in case of default. The municipality is able to fulfill the payment of this loan, so it is not an issue," he explained.
Loans
The City Hall of Rio Branco had submitted two loan requests, totaling R$ 260 million, to the City Council on December 6 of last year. The amounts were included in loans of R$ 340 million, with the National Bank for Economic and Social Development (BNDES) and/or the Bank of Brazil, and a further R$ 40 million to be arranged with Caixa Econômica Federal, filed with the City Council in October of last year.
The Complementary Law Project that authorizes the contracting of credit operations was submitted, but the councilors requested a legal opinion before examining the proposal.
In this new request, the municipality states that it will use R$ 140 million for the road paving program in the state capital and R$ 120 million for improvements in the Water and Sewerage Service of Rio Branco (Saerb).
Previous Requests
Days after submitting the loan request of R$ 340 million, the City Council's Prosecutor requested that the City Hall submit new documentation for review and issuance of a legal opinion regarding the requests.
In the same month, the councilors rejected the loan requests. However, at the beginning of November last year, the City Councilors of Rio Branco reversed their decision and unanimously approved the Complementary Law Project, authored by the City Hall, which authorizes the contracting of a loan with Caixa Econômica Federal in the amount of R$ 37 million.
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