The Provincial Council offers city councils, neighborhood councils and associations of rural areas the possibility of requesting loans from the Provincial Cooperation Fund to finance works or investments undertaken by local entities with programs such as Provincial Plans, the Local Cooperation Fund, regional plans. and the like. In the current situation of low rates, the loans granted do not accrue interest, which constitutes an advantageous financial channel for the applicant entity.
Interested population centers can submit an application to the Provincial Council at any time. The management and processing of the loan granting files that are requested, the preparation of the financial information, the coordination with other dependencies of the institution and the advice to the interested local entities correspond to the Municipal Assistance Service (SAM). However, the internal control and inspection, as well as the accounting of the income and payments that occur in return of the loans granted and their corresponding repayments, are carried out by Intervention.
The Provincial Cooperation Fund is regulated by a regulation renewed in 2016, a regulation that published the Official Gazette of the Province (BOP) on July 6 of that year, and that appears -together with all the complementary information and models- in the electronic office (sede.diputaciondepalencia.es), available to all local entities of the province that may be eligible.
According to these regulations, the financial expense of the operation is calculated at a fixed rate, applying a spread of forty basis points to the applicable State financing cost according to the average term of the operation. This cost is published each month in the table of applicable annual fixed rates of the Directorate General of the Treasury. The current cost on the date of entry of the operation request is applied. If, when applying the spread of 40 basis points, the resulting final rate is negative, it is considered zero interest, as is the case in the current low rate situation.
2022 BUDGET
The Provincial Council will maintain in the 2022 Budget the item of 300,000 euros for the Provincial Cooperation Fund, a financial mechanism to which four city councils have attended since 2018 -Baltanás, Castrillo de Onielo, Requena de Campos and Sotobañado and Priorato-, as well as the Junta Neighbor of Villanueva del Río, belonging to the municipality of Villoldo, which that year requested a loan of just under twenty thousand euros for a renovation work on the supply network.
Sotobañado obtained, also in that same year, a loan of 140,000 euros from the Provincial Cooperation Fund for the urbanization of the Plaza Mayor. The following year, the municipalities of Baltanás and Requena de Campos used these loans for treasury operations amounting to one hundred and ten thousand euros and six thousand euros, respectively.
In 2020 Baltanás again applied for a loan without accruing any interest, amounting to 140,000 euros, to acquire a property; The same end of a small loan (19,000 euros) granted to Castrillo de Onielo also last year.
The purpose of the Provincial Cooperation Fund is to grant loans to local entities in rural areas to finance their economic contribution to the Provincial Plans of Works and Services or to any other plan of the Provincial Council to carry out works and services, implement computer or communication services , and planning that will be considered a priority.
Likewise, the economic contributions of local entities to any planned action that they develop in direct collaboration with the State or the Board are financed. They are also financed by other local investments not included in the previous sections, when in the opinion of the competent body of the Provincial Council they are considered important for municipal or provincial interests.
REFINANCING
Likewise, the Provincial Cooperation Fund grants only to municipalities – and not to associations or neighborhood councils – credits to refinance the loans already arranged with this financial mechanism of the Provincial Council. Exceptionally, it finances the acquisition of computer equipment, communications, computer applications or any other type, which are of special interest for the general development of the province.
Likewise, transitory treasury needs of the town councils are met, provided that they meet the requirements set out in the consolidated text of the local finances. A maximum of 300,000 euros per year of the capital of the Credit Fund will be allocated to this purpose and a municipality will only be able to attend these operations every two years. In this type of operations, the repayment term is one year and they are not renewable.
As a requirement, the applicant must not have any outstanding debt to be paid to the Provincial Council, which resolves the request within a maximum period of three months. After that time, it will be considered rejected, but there are possible remedies by the petitioning local entity: within a period of one month, an appeal for reconsideration, prior to the contentious-administrative one, which can be presented within a period of two months from the day after the express refusal notification.
David Beltrán, Mayor of Castrillo de Onielo:
“Thanks to the loan we have a house that we rent seasonally”
Castrillo de Onielo is one of the town councils that has used a loan from the Cooperation Fund. Its mayor, David Beltrán, acknowledges that it was a “significant expense” for the municipal coffers, whose objective was to have a rental home to offer it together with the operation of the social center bar.
“Thanks to the loan, the town now has a municipal house that we are renting seasonally to people who come in summer or hunters, for example,” says the mayor. “I think it is beneficial for Castrillo – he adds – to have this offer. For a small municipality like ours, it is more manageable ».
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