Profitable and unprofitable municipal property


Today municipalities own the property belonging earlier to the state and transferred to the municipalities after the USSR collapse. These objects are as built-in as built-on non-residential premises of residential houses first floors built at the expense of some trade enterprises, household population services, public catering enterprises percent allocations being a potential source of stable financial receipts to the budget. Besides, municipal formations own the enterprisers traditionally unprofitable for the municipalities: housing stock, city passenger transport, engineering infrastructure objects, territories improvement, etc., and also everything associated with operation, repair, construction and service of these objects.

Housing and communal services object, besides the unprofitability, are also obsolete and worn-out substantially (in many cities this parameter exceeds 70%). Thus local governments, according to KPI analysts, do not actively wish to leave the control over housing and communal services financial streams — payments of the population for housing-and-municipal services and also subsidies and grants from higher-ranking budgets because budgets are formed and then redistributed in many respects from these sources. Thus, inhabitants paid housing and communal services fully for many years and these services have rather high cost, but their means were often intended not to the operational and repair costs and other needs of municipalities. As a result the situation was deplorable, and the funds raised from inhabitants became just insufficient to bring the system into normal conditions.

Municipalities created unitary enterprises for these "planned money-losing" property management. Besides, the municipal formation has the right to let out property objects for lease or to sell them to individuals (the last one in view of the reasons mentioned above — refusal of stable receipts to the budget — are not too favorable for the municipal authority). One more management method is public-private partnership projects implementation (or in this case - municipal and private partnership). Today the highest hopes are put on this tool if the object of the agreement remains in property of the public partner. However it also causes a set of questions both on the one, and on the other side of the agreement.

Anyway, the "let it lay" option and payments collecting and grants receiving already stopped being that is called attractive and hardly remains possible for long term because not only dissatisfied consumers tell municipal authorities about critical condition of property and inability of high-quality management — large-scale federal measures with the state key persons participation are created, the legislation changes, competition is supported in the branch.