The Bottom Line / Yarka Offers Free Electricity, but No Wages at Town Hall

The Yarka Municipality is one of six local authorities that owe their employees several months' wages. Mayor Rafik Salameh says Yarka has not paid salaries for 10 months. Even so, the lack of funds did not stop the council from spending money on other things. An Interior Ministry investigation revealed, for example, that Yarka connected a whole neighborhood to the electricity grid and covered the residents' electricity bills.

"It's not a whole neighborhood," says Salameh, "just nine families. Each family has an electricity meter and reimburses the council for the bills. We had no option - the new neighborhood received a building permit but none for the electricity connection, so we had to lay a line from the school and supply [the homes] with electricity from the school's account."

Salameh thus confirms not only that the council paid the electricity bills of some of Yarka's residents, he also admits that the council illegally hooked up a whole neighborhood to the electricity grid.

This is the same council that in 2004 accepted a rehabilitation plan that included NIS 10 million in state funds. Despite the plan, the council accumulated a NIS 14 million deficit in 2005, and its total financial obligations are about NIS 70 million. The municipal property tax collection rate is only about 10 percent, based on an average house size of 35 square meters - despite the Interior Ministry's assessment that houses in Yarka average 150-200 square meters. Furthermore, the council signed infrastructure development contracts without the required ministry approval, and without the documenting of the contracts; council workers were paid based on a set number of hours unconnected to how much they actually worked; and the council's elected officials owe water and municipal tax arrears exceeding NIS 500,000.

The only section of the recovery plan that was actually implemented was the layoffs - 100 of the council's 300 employees were fired. All this means that Yarka probably ended 2006 with a deficit - at the end of the third quarter, its deficit was already NIS 5.7 million.

Yarka's achievements are not unique. Taibeh, another record-holder in nonpayment of employee wages, signed a recovery plan in 2003. The city received NIS 80 million, but its debts now total NIS 140 million, with NIS 85 million of this from 2005 alone. Municipal tax collection is just 9 percent, and as usual, city council members owe back taxes and water bills totaling NIS 100,000.

The state treasury has funneled more than NIS 2 billion into recovery plans for 150 local authorities in the past three years, a sum equivalent to the budget cuts to the local authorities' state funding in 2003-2004 due to Israel's deep economic crisis at that time.

This means that the contention that the budget cuts led to the local authorities' current economic difficulties does not meet the numbers test. In addition, only 28 of the 150 local authorities that required recovery plans in 2004 are still mired in debts. Most of those 28 are managed similarly to Yarka and Taibeh - in a manner that offers little chance of recovery regardless of the sums infused.

This is the reason the interior and finance ministries are refusing to provide more funding before these authorities undergo management changes that guarantee the public's money won't be wasted.

The local authorities respond to the treasury's closed purse strings by systematically halting employees' salaries, secure in the knowledge that the workers' anguished cries will lead to public pressure on the government. As everyone can see, this method works, and it is exactly the type of pressure being exerted by the Histadrut labor federation now, as part of its threats of a general strike.

The Histadrut thus becomes a tool in the hands of the local authorities, as they unethically demand to enjoy municipal authority without assuming the responsibility this involves.

True, the local authority employees are not responsible for their bosses' irresponsibility, but neither are the rest of Israel's citizens. The authority heads are guilty. Before the state is required to pay debts in their stead, the council heads should shoulder the responsibility by dissolving elected councils that have failed in their duties. There should also be individual responsibility in the form of firings, and even criminal proceedings when necessarily. Small failing authorities should be merged. These are the demands the Histadrut should have made, and nothing else.