Seo-gu faces cash shortage by mid-November
Geomdan-gu questions reliability of settlement figures
Settlement amount rises from 58.1 billion to 64.8 billion won; public facility costs and job succession also in dispute
Incheon's Seo-gu and Geomdan-gu are locked in a dispute over fiscal settlement following a reorganization of the city's administrative structure.
Seo-gu has filed for mediation with Incheon City's dispute mediation committee, citing a deepening fiscal crisis caused by delays in the settlement process, while Geomdan-gu has raised questions about the reliability of the figures after the settlement amount changed.
Seo-gu District Mayor Gu Jae-yong held a press conference Tuesday and announced the district had filed for dispute mediation with Geomdan-gu over the financial settlement.
According to the press conference, Geomdan area revenue in the first half of this year came to about 38 billion won, while expenditures reached about 102.9 billion won. The former Seo-gu covered the shortfall of roughly 64.8 billion won ($48.9 million) upfront.
Seo-gu said the spending was carried out in line with Incheon City's budget guidelines for newly launched autonomous districts and the two sides' agreed framework for basic fiscal adjustment, and that a post-split settlement is necessary.
Geomdan-gu, however, has taken issue with how the settlement figure changed and whether the underlying data can be trusted.
The settlement amount Seo-gu notified to Geomdan-gu rose from about 58.1 billion won on Aug. 12 to about 64.8 billion won on Oct. 6 — an increase of about 6.7 billion won.
Seo-gu said the adjustment reflected a change in the reference point for the settlement and the scope of revenue and expenditure items included.
The district also said that if Geomdan-gu disputes the figure, it should present specific amounts and supporting data for verification.
Seo-gu warned that the settlement delay could leave it without funds from mid-November onward, potentially disrupting payments for essential expenses.
The district urged Incheon City to expedite the dispute mediation process and provide emergency fiscal support, and called on Geomdan-gu to pay at least the portion of the settlement that has already been confirmed.
The conflict between the two districts has spread beyond the settlement amount to the operation of public facilities in the Geomdan area.
Seo-gu said it needs organizational, personnel and accounting support from the headquarters of the public facilities management corporation to run facilities used by Geomdan-gu residents, and called for Geomdan-gu to share the related operating costs.
Geomdan-gu said it was willing to cover 6 percent of the total budget across all facilities, but Seo-gu countered that Geomdan-gu must bear the full costs required to carry out the delegated work under the service entrustment agreement.
The employment succession of corporation staff is also a sticking point. Seo-gu called for the entrustment agreement to explicitly include provisions guaranteeing job security and employment succession for existing workers — as well as priority hiring — in the event the operating entity changes, such as through the establishment of a Geomdan-gu facilities management corporation. Geomdan-gu is said to have declined to include such provisions in the agreement.
Differences over asset succession and local bonds remain as well. Seo-gu said the local bonds tied to the Geomdan area were issued to build infrastructure for Geomdan new town and that the debt was not deliberately transferred ahead of the district split.
The district also said the asset succession was carried out under Article 8 of the Local Autonomy Act and that the legal basis is clear.
The two sides have yet to reach agreement on the settlement amount, the repayment timeline, and the sharing of public facility operating costs. Attention is now focused on whether the Incheon City dispute mediation process can establish clear standards for the settlement and cost-sharing and resolve the conflict.
gilbert@heraldcorp.com
