For the nineteenth time since the first Utility Management Law in 1995, amendments are underway. The law regulates the maintenance of roads, green areas, cemeteries, public lighting, public purpose buildings, and the cleanliness of public areas, while the Ministry of Construction and Spatial Planning denies the amendments. Sources familiar with the issue indicate that the latest amendments to the law will allegedly bring price increases for citizens, reports Novi List.
In early February, the proposal for the law was accepted in the first reading in the Parliament, while it is expected to be discussed in the second reading before the summer break starting on July 15.
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Due to the amendments, utility companies will no longer be allowed to engage in market activities. Specifically, the utility company responsible for cemetery maintenance will still have the authority to sell burial plots, arrange and maintain cemeteries, but will not offer services for selling funeral equipment, wreaths, obituaries, or organizing funerals in general; this part of the work will be assigned to private companies.
Burial plots will also become more expensive, depending on supply and demand.
In addition to the fact that citizens will have to go to two places for the burial of the deceased, the annual burial fee could be significantly higher unless the city or municipality allocates enough from the budget for the utilities, warned Sonja Polonijo, a long-time director of the Crikvenica Murvica, and now a collaborator of the Association of Cities and an advisor to the Croatian Association of Tenants and Co-owners.
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– Until now, utility companies have patched holes with earnings from market activities due to insufficient budget allocations from local government units for the arrangement of public and green areas, maintenance of sports halls, and similar chronic loss-makers. Utility companies will no longer have anything to patch those holes, and it is clear who will pay for all this – the citizens, says Polonijo.
All profit will go to private entities.
For example, the city cemetery, which has so far generated net profit from organizing funerals, allowing annual burial fees for citizens, from which cemetery maintenance is paid, to be around a hundred kuna per year. However, with the amendments to the Law, warns Polonijo, everything that generates profit will go to private entities, and cemetery maintenance will have to be compensated from city and municipal budgets, or through an increase in burial fees.
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– The consequence of such legal solutions will certainly be an increase in utility service costs for users, the outflow of profits into private pockets, and, through that, the weakening of utility service providers. Cities and municipalities, whose cemeteries have so far been financially self-sustainable, will face the inevitability of increased budget allocations for their maintenance, says Polonijo, convinced that this legal solution will increase both market and utility service costs.
The Ministry, on the other hand, emphasizes that there is no reason to expect an increase in utility service costs, stating that there is no reliable data indicating that income from market activities finances the provision of utility services.
Utility companies must not generate extra profit.
However, they simultaneously state that in a good number of cases, commercial companies perform market activities below the usual market price, which may suggest that market activities are being carried out with funds intended for utility activities.
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– A special ‘treat’ are public and green areas, as well as city sports halls, into which private entities are not currently pushing, emphasizes Polonijo.
She believes that the Ministry’s responses suggest that utility companies are transferring profits from utility activities to market activities, even though they are not allowed to have extra profits according to the principles of utility management.
