APLA and The Government Discuss Strategic Solutions to Ensure Service Continuity

In response to APLA’s recurrent appeals and warnings of risks to the continuity of services due to financial and regulatory challenges that face LGUs, a strategic workshop was held jointly by the government and APLA. The session brought together ministers, LGU Mayors, and representatives of the Ministry of Local Government (MoLG), MoI, Ministry of Planning and International Cooperation, MoTA and MoF, members of APLA Executive Committee, and ministry and APLA staff. To enhance public service delivery, participants discussed challenges to LGUs, proposed appropriate solutions, developed a common vision for the future of local government, and set mechanisms for further decentralization and increasing LGU powers. 

APLA submitted a detailed document that includes its demands, recommendations, and proposals, addressing the following key areas in depth: maintaining the quality of services provided by local authorities, resolving the financial relationship between the government and local authorities, organizing the relationship between local authorities and line ministries, and addressing issues of net lending and debt settlement.

Main themes and challenges to LGUs

1. Finance

APLA called for the immediate transfer of LGUs’ financial dues, the development of a transparent financial transfer system, and the allocation of a percentage of revenue from fees and taxes, such as fuel taxes and telecommunications license revenues, to LGUs. APLA also stressed the importance of upgrading LGU fee and tax collection system and transferring collection powers to LGUs.

2. Regulatory and legislative framework

APLA reviewed challenges posed by outdated LGU laws. It proposed that laws, such as the 1997 Local Government Unit Election Law and 2014 Public Procurement Law, be revisited to fit LGU functions. APLA demanded that new regulations be passed to promote LGU powers and cover new areas, including investment and sustainable development.  

3. Working relationship with government bodies

The institutional relationship between LGUs and ministries was discussed, emphasizing the need for clear boundaries of authority and avoiding overlaps in responsibilities. Participants recommended enhancing coordination with relevant ministries during the drafting of legislation and policies.

4. Emergency and crises

In view of the LGU role in emergency and crisis management, APLA demanded that financial and technical resources be provided to support LGUs and strengthen partnerships between LGUs and relevant government entities.

5. Environment and public health

Highlighting environmental challenges associated with sanitation and solid waste, APLA called for developing an integrated, multi-party national plan to devise radical solutions for these problems.

Recommendations and decisions

1. MoF commitment to monthly transfers: Within available financial resources, the agreed monthly amount of ILS 15 million will be transferred, prioritizing an incremental increase of this commitment in line with growing government revenues.
2. Professional tax: Professional tax revenues will be earmarked to LGUs. A clear mechanism will be in place to transfer these revenues.
3. Public procurement procedures for self-funded projects: A decision was made to give LGUs greater flexibility in public procurements for self-funded projects. Current procedures will be revised to facilitate implementation.
4. APLA coordination with the Net Lending Unit: It was decided that APLA coordinate and cooperate with the Net Lending Unit to facilitate debt settlement and clearance procedures.
5. Developing a system on government transfers: A new system on government transfers to LGUs will be developed, with funding from the Municipal Development and Lending Fund (MDLF) and in cooperation with the MoLG and APLA. The system will be submitted to the Council of Ministers for approval.
6. Reviewing regulations and instructions: The MoLG will start reviewing and amending regulations and instructions on the working relationship with LGUs, including:
   1. Regulation on LGU classification,
   2. Regulation on LGU staff,
   3. Procedures for the Minister’s approval of LGU decisions,
   4. Issuing clear instructions on the dissolution and conditions of elected LGUs
   5. Revoking any circulars or procedures that contradict the law or violate LGU mandate.
7. Collecting building and land (property) tax: While relevant decisions are reviewed, the transfer of property tax collection powers to LGU is scheduled to continue. Under effective laws, the statutory tax rate remitted to the government will not exceed 10%. Accordingly, the current 16% rate is illegal and unacceptable. To ensure justice and transparency, the transfer of valuation powers to LGUs will also be considered.
8. Promoting cooperation with the Police: A decision was made to enhance cooperation between LGUs and the Police to expedite implementation of legal procedures and removal of encroachments on public rights.