Privatization of Community Property Favors Officials' Families
Last December, the local council of Alaverdi approved the budget performance for nine months of 2005, a three-year-program for the socio-economic development of Alaverdi for 2006-2008, and the 2006 budget. But the discussion of these vital issues was kept from the citizens of Alaverdi. Furthermore, the heads of budgetary offices within the municipality, the head of the tax department, the treasurer, the Lori governor, representatives of the Ministry of Finances and Economy, and members of parliament representing the Lori Marz failed to take part in the discussions; their absence can be qualified as indifference toward community affairs.
The three-year-program for the socio-economic development of the city listed only the names of program proposals and their costs. Neither the source of the required 800 million drams and the timetable for the implementation of the program were specified. Yet the local council approved the city development program without question. They also unanimously approved the budget performance for 2005.
The 2005 budget stipulated 205 million drams for revenues and official transfers, 75 million of which was envisaged as state subsidy and was allocated from the state budget on time. The main problem for the Alaverdi community budget was securing local revenues, tax revenues in particular. Only 23.4 million of the expected 81 million drams in tax revenues was collected, 9.3 percent in land tax and 33.8 percent in property tax. The municipality ascribes the limited tax collection to the population's inability to pay. But the fact that the expenditures are not made public contributes to the problem, by increasing distrust on the part of taxpayers. As a result, the losses build up. According to Samvel Abelyan, head of the financial department of the municipality, taxpayer debt to the community budget exceeds 100 million drams. Naturally, not all the items envisaged in the budget were accomplished. Moreover, the municipality owes six months' wages totaling 40 million drams to employees of the budgetary offices.
A serious problem is the expropriation of fixed assets (buildings, structures, dwellings) belonging to the community. According to official data from the mayor's office, 43 establishments belonging to the community were sold in 2003-2005 and the proceeds to the budget amounted to 26 million drams over three years. According to the Alaverdi treasury, these proceeds amounted to 34 million drams. It is assumed that the mayor's office has concealed some of these deals from the public. On the surface, it appears that these units were sold lawfully. The buildings and structures were appraised by the Vanadzor real estate agency. The local council had the right to raise the starting prices, but did not do so. As a rule only eight out of fifteen members of the local council signed the decisions on property alienation. The others, though they opposed the starting prices, did not make their objections public. As a result, only trifling sums were allocated to the budget from the deals. For example, the building housing Kindergarten #8 (378 square meters) was sold to Anahit Sahakyan, the wife of former mayor of Alaverdi Saribek Ohanyan, for 1.5 million drams; Sahakyan subsequently resold the building for 6.5 million drams.
Similarly, Kindergarten #4 was bought for 1.6 million drams and resold for 14 million drams.
And in 2005, Kindergarten #7 (707 square meters) was sold for 2 million drams directly to Laura Meliksetyan, the wife of Lori Governor Henrik Kochinyan, who uses it as an apartment. Ordinarily, 2 million drams won't even pay for a one-bedroom apartment (40 square meters) in Alaverdi.
A look at the various deals privatizing community property shows that in 2003-2005 some 100 million drams were misappropriated or dispersed. Rumors of shady payments by the buyers to the mayor's office for the privatized buildings are widespread in Alaverdi.
The local council unanimously approved the 2006 city budget, making objections or suggestions regarding either projections of revenues and spending or new revenue previsions.
Only one thing is anticipated - that the new mayor of Alaverdi will have the chance to sell off buildings and constructions belonging to the community. Who will gain from this - the budget, the city, or the mayor himself - is less certain.