In spite of their ten-year history, the activities of municipalities take a quite formal character, they do not have a wide range of authorities, and their role in the formation of local government is significantly small. Due to limited financial resources, municipalities are not able to fully exercise their functions relating to the organization of many social affairs. This is the building of schools, kindergartens, health clinics, laying roads and parks, sports facilities, assistance to poor families, improving water supply, sewerage systems, transport infrastructure, supervision and care of cemeteries. As seen, it is not small.
During the reported period, many attempts were made to streamline the activities of local governments and give them an authorized status. However, in similar parameters situations, some municipal leaders have managed to work their organizations, while others are not very successful. Opinions about such a precarious state of municipalities are different: lack of funds, authorities.
We wrote about the first two problems in the last issue of Trend Weekly, and with regards to the last one, 2,757 municipalities were created in various towns and districts of Azerbaijan, which means that 32 municipalities per 100,000 people. In its turn, this leads to increase of administrative expenses and makes it difficult to implement authorities, which in its turn, requires optimization of the number of municipalities.
For this purpose, a bill on the merger of several municipalities in Azerbaijan was presented to the Parliament of Azerbaijan. According to preliminary data, the number of municipalities in Azerbaijan will be reduced 36 percent. "So, of 2,757 municipalities operating in Azerbaijan, 993 municipalities will be abolished," the Chairman of the Parliamentary Committee on Regional Affairs Arif Rahimzade. According to the project, 1,764 municipalities will act in Azerbaijan and two new municipalities will be opened.
Thus, reducing the quantity, the quality of municipalities will be raised. Firstly to promote the legal framework of self-governments, secondly to work towards strengthening the economic and financial base of municipalities and thirdly to improve municipal management. With one word, to organize municipal reforms before municipal elections, make them work effectively, thereby increasing the level of training, their material and technical basis to strengthen the trust of residents in these structures so that they actively participate in the voting.
Since the beginning of the year, the President of Azerbaijan signed 21 orders related to the improvement of the activities of municipalities in Azerbaijan. All orders are accompanied by the President's tasks to the Cabinet of Ministers to bring their normative legal acts and regulations into conformity with the changes in the municipal law, and inform the President of Azerbaijan.
Changes will undoubtedly affect the state financing of local governments. Municipalities wishing to obtain financial assistance from the Public budget must provide the Ministry of Finance with the documents envisaged in the law, as well as documents regarding allocation of Public budget subsidies and other financial assistance.
In the world practice, besides taxes and budgetary subsidies, one of the ways of filling the budgets of municipalities is the issuance of municipal bonds. In Azerbaijan, the idea arose four years ago and worked seriously, the deadline for this project was 2008. However, the unfavorable situation on world stock markets sat back the implementation of the activities at the best times.
The main purpose of the issuance of municipal bonds is to ensure the access of local governments to the stock market with their municipal bonds that so that to direct the funds attracted under these securities towards financing their projects. According to preliminary data, the initial issuance will total 500,000 manats during the period of 2-3 years. The profitability of municipal bonds will be determined by the issuer, and the payment of dividends on the bonds should be made at the expense of profits of the municipalities. A region was already selected, the municipality of which will issue the first bonds. Other municipalities convinced of their effectiveness will begin to issue bonds themselves.
Based on the experiences of other countries, through the issuance of municipal bonds big highways can be built in Azerbaijan, which will bring substantial profits from paid travel. For example, this tool is widely used in large cities (Moscow, St. Petersburg, Kiev, etc.), since the gained funds to go to cover the needs of urban infrastructure. In Malaysia, the issuance totaled $100 million for the construction of highways, and now these paid roads give huge profits.
Reforming the activities of the municipalities also enables to give municipalities additional functions. Currently, municipalities have enough authorities for normal activities, but despite this the issue of enlarging the activities of the municipalities remains a topic of discussions in the society and senates of the parliaments.
MPs make proposals to expand the activities of municipalities, through transferring the authorities on management of housing and communal services (HCS). Similar recommendations were provided to Azerbaijan by the EU specialists, since the regulation of public utility sector in all advanced countries of the world is carried out by the municipalities. This step will allow to firstly facilitate the provision of local authorities with additional resources, secondly the municipalities will be able to solve certain problems in housing and communal services.
A proposal is also devised to give municipalities the opportunity to collect, transport and utilize wastes. The Law on the Status of Municipalities says that this should be carried out by the municipalities, but Law on Collection and Utilization of Household Wastes says that this duty is entrusted on the executive power.
The European Charter requires that the powers of municipalities must be clearly defined and must not shared with other government agencies. Or, if the power is divided, that division must be exact in detail. For example, Azerbaijan's Law envisages that the maintenance and repair of local roads is the responsibility of municipalities. But the certification of roads should be made by the state agency, i.e. State Real Estate Registry.
So, two executive bodies are involved in one and same facility, whilst the division of functions here is very exact. The functions of municipalities are also precise and their expansion should also enroll other duties. It is too difficult to assert which functions and rights of municipalities have been defined exactly and have grounded sources of financing.
The municipalities also offer different ideas to expand their authorities. Thus, water supply should be a prerogative of municipalities. Local melioration and irrigation duties should be given to municipalities. The municipalities can carry out conscription at places. Management and maintenance of facilities of social significance should be given to municipalities. As to sport events concerning younger generation, Facilities of education bodies should belong to municipalities including their repair and maintenance. Obviously, trainers will be teachers subordinated to the Education Ministry.
So, these can be all authorities of the municipalities for the time being. Because, as narrower the circle of authorities as qualitative the work is. Undoubtedly, by times, the authorities of municipalities will be expanded. It will occur naturally, due to expediency. It should not necessarily take place by legislative way. It is not important here only large circle of authorities to enable municipalities to demonstrate themselves as a drive in solving local problems.