Geomdan-gu District Mayor Kim Jin-gyu says settlement calculation lacks transparency and saddles new district with 26.3 billion won in municipal bonds; dispute over facility management costs adds to tensions
Two newly established Incheon districts — Geomdan-gu and Seohaegu — have come into direct conflict over fiscal settlements and public facility management stemming from a recent administrative reorganization.
The dispute escalated after Geomdan-gu raised objections to Seohaegu's method of calculating settlement payments, the transfer of municipal bond obligations, and demands for a share of facility management costs.
Geomdan-gu District Mayor Kim Jin-gyu held a press conference Monday to lay out his district's position on the first-half fiscal settlement and facility management fees that Seohaegu has demanded.
According to the press conference, Seohaegu asked Geomdan-gu to pay 64.8 billion won ($48.9 million) to cover excess expenditures in the Geomdan area during the first half of this year.
Geomdan-gu said Seohaegu had publicly cited a figure of 58.1 billion won at its own press conference on Oct. 6 — a discrepancy of 6.7 billion won from the 64.8 billion won stated in an official document sent to Geomdan-gu the same day.
Geomdan-gu said it had earlier found that 10.8 billion won in non-tax revenue was missing from the supporting materials when Seohaegu initially sought the 58.1 billion won settlement, and had asked for a correction. After the figures were recalculated, however, the claimed amount rose to 64.8 billion won.
Geomdan-gu called for transparency in how the settlement figure was derived, saying no adequate explanation or supporting documentation had been provided to account for the changes in revenue and expenditure figures.
Beyond the settlement payment, the transfer of funds held in special accounts and reserve funds has also emerged as a point of contention.
Geomdan-gu said it had sent two official letters asking Seohaegu to confirm how much of the unspent project carryover funds and special local allocation tax and special adjustment grants from the first half of this year had not yet been transferred to Geomdan-gu. It added that the relevant funds had not been properly remitted.
Geomdan-gu also said an excessive fiscal burden had been shifted onto the newly established district during the reorganization process.
After move-in to the Geomdan new town began in earnest in June 2021, Seo-gu's annual revenue from property taxes and collection grants rose by an average of more than 20 billion won per year.
Yet Geomdan-gu said that even after the administrative reorganization was announced in August 2022, sufficient financial resources were not secured to ensure a stable launch for the new district.
Geomdan-gu said it had been saddled with 26.3 billion won of the municipal bonds issued by Seo-gu between 2021 and 2024.
Those bonds funded the construction of the Majeon-dong administrative welfare center, a social overhead capital complex in Ara 1-dong, and the development of Geomdan Park No. 17.
"Geomdan-gu has been left to repay existing municipal bonds at a time when it needs to build its own administrative foundation as a new district," Kim said, urging Incheon city to take an active role in resolving the fiscal disputes that arose from the reorganization.
A separate dispute over sharing the operating costs of the facilities management corporation has also continued.
Geomdan-gu currently has no facilities management corporation of its own and has contracted out the operation of public facilities in its area to the Seohaegu Facilities Management Corporation.
Geomdan-gu said it already covers all personnel and project costs for the contracted facilities, but that Seohaegu has demanded an additional contribution of around 1.1 billion won to cover the corporation's headquarters operating expenses.
Geomdan-gu said the basis for that demand needs to be examined, as the cost is not clearly stipulated in the service delegation agreement.
The question of employment succession for facilities management corporation staff is also on the table. Seohaegu has reportedly asked that the Geomdan-gu facilities management corporation — once established — give hiring priority to existing Seohaegu Facilities Management Corporation employees and take over their employment.
Geomdan-gu said job security for facility workers is an important matter, but that an objective assessment of the feasibility of establishing its own corporation and the appropriate organizational size and staffing levels must come first.
There are also concerns that delays in negotiations between the two districts could disrupt public facility operations and inconvenience residents.
Both districts have written into local ordinances a provision ensuring that residents on both sides will have equal access to shared public facilities — including libraries and sports centers — through 2027, even after the administrative reorganization.
"We cannot accept Seohaegu's unilateral demand for a settlement payment or its additional demands related to the facilities management corporation," Kim said, urging Incheon city to mediate responsibly and calling for substantive negotiations between the two districts.
gilbert@heraldcorp.com
