Netanyahu Jerusalem officials GPO
Benjamin Netanyahu, far left, meeting with Jerusalem officials. Photo by GPO
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A strike by municipalities across the country was avoided yesterday at the last minute after local council heads came to an agreement with the prime minister and the ministers of the interior and finance to increase funding and reorganize water corporations.

The agreement, which local authority heads called "historic," will augment the education budgets of local authorities and cover their budgetary shortfalls. The reorganization of the water corporations will transform local water corporations into non-profit municipal companies aimed at pushing prices down. The agreement was signed at 5:30 A.M. after six hours of negotiations with the participation of Prime Minister Benjamin Netanyahu, Finance Minister Yuval Steinitz, Interior Minister Eli Yishai, the chairman of the Union of Local Councils, Shlomo Buhbut, the chairman of the forum of Israel's 15 major cities, Tel Aviv Mayor Ron Huldai, and other local council leaders.

The additional funding, which also includes development grants and compensation deriving from wage agreements, comes to NIS 900 million.

The total payment to cover shortfalls will be NIS 2.77 billion this year, up from NIS 2.4 billion.

The deal-breaker was the decision to change the way the water corporations are run. It was agreed that a joint committee consisting of representatives of the local councils, the treasury and the Water Authority, will present recommendations for reorganizing the water corporations within 45 days with the goal of lowering the price of water.

The local councils had threatened an all-out strike in protest over the slashing of about NIS 500 million from their education and social services funding and over water price increases resulting from the establishment of the water corporations.

"This is a historic agreement with social aspects that will benefit the private citizen's pocket," Buhbut said. "As a first step, the expected increase in water prices has been avoided and VAT on water has been decreased. The next stage will be to abolish the water corporations in their current format, which have forced us all to pay exaggerated prices for water."

Huldai also said he was pleased with the outcome, adding: "I hope this time the government understands that local government is not a workers' committee or a sector but is the government that stands at the forefront of services to the citizen."

The forum of water corporations said the water corporations had been established because most municipalities had failed to manage their water supplies. "The corporations received neglected infrastructures and over the years have proven their efficiency in renovating these systems," according to their representatives. "Citizens must understand that most of the water fees are not transfered to the corporations but to Mekorot, the national water company. The moment Mekorot becomes more efficient, citizens will benefit because water costs will go down."