Interview with Valdis Bārda, Chairman of the Aloja Municipality Council
We began our conversation with the news of a planned significant increase in the natural resources tax. What is this linked to?
A large part of the payment for every cubic metre or tonne of waste is made up of the natural resources tax. There was a time when municipalities received a certain percentage of this tax so that they would have funds to improve the environment and infrastructure. For example, as far as I know, in Stopiņi Municipality, residents receive compensation because of “Getliņi”, as they cannot drink water from their wells or use it to water their gardens. Then followed the decision to transfer 100% of this tax to state control. At a recent meeting with Minister Juris Pūce (the meeting took place at the Ziemeļvidzeme Waste Management Organization (ZAAO)), we heard a promise: a portion of the increased natural resources tax could once again be received and used by municipalities. In Aloja Municipality, for example, we could address the issue of wastewater or fix up the infrastructure near the Salaca – in other words, return to nature what was taken from it!
In fact, for municipalities, this was money that slowly accumulated, and with the accumulated sum, something could be achieved! When talking about waste management, we usually hear two extremes: if something is organized by a municipality, people talk about a “local government mafia”, if waste management is handed over to private hands, it is “the mafia again, this time private”! There will always be a certain proportion of the population that will not be happy with either approach.
Speaking about Ziemeļvidzeme, in my opinion, ZAAO is a successful solution for a waste management company where municipalities are the shareholders. In Latvia, the understanding of municipal operations at various levels is often backward. For example, in Norway, municipalities, in order to perform their designated functions and have the funds to do so, quite often turn to economic activity. I know that in Norway, a municipality can own shares in a power plant; with this money, a lot can be achieved: it is sustainable municipal income that can be put to use. Here, the attitude towards such a practice is short-sighted. I have participated in more than one working group where we talked about municipal involvement in companies and finances. I believe that a municipality could participate in a forestry cooperative by delegating its representative. If a municipality participated in a cooperative with its forest properties, both the properties would be professionally managed and the municipality would gain additional funds. But! Many organizations, including the Procurement Monitoring Bureau, VARAM and the Cross-Sectoral Coordination Centre, say: “No!” In the explanation, we hear that “this way the municipality may violate certain European Union rules”, because – a municipality can join a cooperative, but it cannot use its services – a tender is required! … If a municipality hands its forests over for management via an auction, for example, to a Danish company, that is acceptable, but if it gives work to its own cooperative without an auction, it is a violation! Such views are wrong!
Returning to the natural resources tax: its increase means that the cost of waste management in Latvia will rise. And quite soon… Is this related to the implementation of the administrative-territorial reform (ATR)?
ATR and the raising of the natural resources tax are independent processes. I am not convinced that changing tax rates and introducing a deposit system will necessarily improve waste management or the situation regarding it in Latvia. The problem: it is not clear how much of the deposit-eligible packaging will actually be returned and how much packaging cannot be deposited – what will happen to that? These questions remain unanswered! Consequently, there is no solution. Yes, the deposit system is a good thing, but – what does it solve and is the lobby of equipment manufacturers intended to play a significant role here…
Is there any specific calculation or justification for the increase in the natural resources tax, or is it, as has become usual in recent years – “the state needs money, let’s see where to grab it from”?
The minister explained that it is necessary to follow EU policy: to produce as little waste as possible. At the same time, this path is quite risky and narrow: last year, the increase in waste management fees was very rapid, and even now we are not talking about, for example, 5% per year, but much higher figures. For example, a business that only “generates” household waste in its office will not feel much, but for a catering or manufacturing company, costs can rise significantly! The situation in the field of waste management has improved a lot in the last 10 years, but with costs rising rapidly, there is a risk that waste might not be disposed of properly, might be burned, etc. For example, in construction, dumping or burying rubble somewhere…
You can often see on social media forests, roadsides or field edges where someone has dumped office scraps, rubble, or… This habit, hopefully, is still cherished by only a small part of society!
We encounter this in our municipality as well. Often, one can only marvel at the thinking of fellow citizens: if someone has already dumped waste in an accessible place, the pile clearly grows. As we know, there are often problems with sorted waste, where a lot of unnecessary things are thrown into a container intended for glass. I like how ZAAO works, by informing the public and monitoring. I know that the municipal police have the ability to check whether those residing at a certain address have a contract for waste collection.
Speaking of the administrative-territorial reform, its critics are usually “accused” of party affiliation, a “desire” for a seat or very personal interest. In your view, how did the reform proceed?
My opinion is not related to party affiliation. I agree that often a critical look at a small nuance of the reform is perceived exaggeratedly: “You are against everything!” That is not the case, it is wrong to think so!
I was elected as a deputy in the municipality quite a long time ago, even before the previous reform; it will be 14 years. I have been in a paid position for a shorter time. I was elected from a non-governmental organization: a sports club, because I believed that Aloja needed a sports hall where people from Aloja and others could spend time after work or school. We have a sports hall, we opened it after “my first term”, we are still proud of it, people come, train, do sports and praise the good condition of the hall! The premises are busy! For example, table tennis players call our hall the best in Latvia!
At the beginning of my work as a deputy, I worked in my own company; I was not a civil servant or a municipal employee. In connection with the reform, we objected to its process and quality. Instead of delving into specific issues, meeting with municipal representatives and responding specifically to questions, we received a reply not from the President, but from the head of his chancery… This is dangerous! Even more confusing was the President’s suggestion that “in case of failure, something can be turned back”. As a person with experience in business, this surprises me, because that is not how it works! By way of comparison: we build a woodworking workshop, we conclude that the planers are not of high quality or the ceilings are too low: “Let’s tear it down!” It didn’t work! … This is not how things are done; you have to think and calculate, look at the economic justification. The way the reform is moving now is called redrawing the map. No one listened to our arguments! Even though a great many parties talked about increasing the efficiency of state administration before the elections, there are no steps in this direction! By the way, at the EU level, it was also acknowledged that the municipal governance system in Latvia is very democratic and very close to the residents, which is currently being destroyed without any calculations. For example, in Naukšēni Municipality, which is a small municipality, unemployment is lower than in Valmiera. If you listen to the idea: the bigger, the better… I wonder why the extraordinary elections for the largest Latvian municipality – the Riga City Council – are scheduled for August. For a long time, Talsi could not elect a mayor and appoint an executive director… Will the municipalities that will be merged with Talsi get good or better governance? Where is the improvement? If we are two at the table, we each have 10 euros in our pockets; if we put the money together, we won’t have 30 euros… I would like that, but it won’t happen! There will be as much money as there is, but municipalities have to perform the same functions! In the already mentioned story about ZAAO, we talked about the fact that “it is difficult to manage a large territory with a low population density so that the work is efficient”! We cannot cite, say, the Netherlands as an example, with a different number of inhabitants and their distribution!
Two of our country’s problems, which we talk about a lot and include in many plans for their solution: regional inequality and the loss of human resources after the restoration of independence in 1990. I do not see that these problems are being addressed even slightly in the process of redrawing the map. Issues regarding the financial equalization fund and municipal support for entrepreneurship have not been solved, nor discussed. What I don’t like: we are told – we can turn to the Constitutional Court. Yes, indeed, but we can only defend the interests of our own municipality! If the municipality council decides so, we can only dispute the issue affecting Aloja Municipality, but I am personally interested in a broader view: how we develop regions, how we work with European money. The current situation, where money is divided equally, is not correct, because every municipality has different needs. For example, about housing insulation: it is said that there will be about 8 million euros. It is about the whole of Latvia, projects will be created, but that is not an efficient spending of money. “Everyone in larger and stronger municipalities will be better off!” It reads inspiringly, but it has no content, or it is the opposite! We are not talking about regional inequality, development indices, or border or peripheral issues. Each sector has different management and classification, whether it be the forest sector, rescue and civil protection, the army, etc. Everyone in Latvia lives in their own world… The mayor of Mazsalaca described the situation as follows: “A person is brought to the hospital with a splinter in their right toe and a stroke. The medical council concludes that the person’s health can be improved and they must tackle the splinter.”
At one time, Gints Kukainis (former mayor of Smiltene) mentioned in an interview that before the reform, one should read the law on municipalities and invite them to unite themselves!
If the reform had started with a discussion about functions: what belongs to the state, what belongs to the municipalities, it would be understandable. Currently, municipalities have a lot of duties. Compared to the time when I started working in the municipality, and today, the volume of documents has increased. We would save a lot and achieve more if we delegated some functions to the region (for example, orphan courts, police). Currently, the so-called planning region has only consultative functions.
Speaking of reducing bureaucracy, the emphasis so far has been: to indicate the reduced number of staff units, not the volume of regulatory documents!
There have been attempts to reduce the amount of regulatory documents, but they have resulted in general reports, not actual reductions! Māris Pūķis, an advisor to the Latvian Association of Local Governments, had an idea: when adopting one law, two must be repealed or deleted! That would be the right path. Currently, a lot is moving in the opposite direction. I believe that only a person who has worked in business, who has “created” money themselves, achieved a goal, looked at what and how to do, can successfully act as a minister or decision-maker. A very large part of our ministers are not related to business and come from the civil service; they are followers of normativism. For example, VARAM had a good project: funding for the promotion of entrepreneurship, we also participated from Aloja Municipality. I will not go into details, but no entrepreneur would feel good if they had participated or heard the conversations that took place during inter-ministerial meetings. The principle: “Just so nothing goes wrong!” …is not understandable in business. It can succeed, it can fail! The principle of bureaucracy: “Never needed and cannot make mistakes”, leads to the minute and detailed description of any process, strict frameworks and additional difficulties and obstacles to development.
For example, after the Zolitūde tragedy, a lot of attention was paid to construction, which has now become heavy, expensive and time-consuming in terms of paperwork. Has it become safer? A huge amount of paper, rules, and officials have been produced, but a fast, high-quality and professional process is missing.
Is it easier that way?
The human factor: every person in a position must prove their activity and its purpose! By the way, this was vividly expressed during the Covid19 crisis, because so many webinars and meetings, whose organizers emphasized that it is the right time to fix anything, had not been experienced. For me personally, many activities are associated with the example: “A car has been ordered. The dealer calls, the car has arrived. It has no rear wheels and no gearbox, but it is in time and in place! The contract is fulfilled. If something is not happening as it should, call!”
A real situation in Latvia, in more than one municipality: the number of deputies is 8:7, 6:7. Just try to understand how the leadership changes, who is in power, who is making deals with whom!
This does not depend on the size of the municipality, but on understanding and political culture. Are the conversations in the Saeima meaningful, constructive and aimed at results?
In conversations with Saeima deputies, I have seen and heard that more than one does not have an understanding of municipal functions, tasks, the fiscal framework and budget formation. I think sterile squabbles and disputes also exist elsewhere in the world; we are not very different, but as time goes on, it will be harder and harder to persuade people who are thoughtful and analytical with respect for themselves and others to work in politics. In the last municipal term, there have been so many changes and shifts in leadership and coalitions, and I do not see that the situation could improve.
Currently, those who shout the loudest or lie first win.
For example, talking about the forest sector, I have heard that a media outlet invites a “forest expert”, who goes to the forest to run, to express their opinion! Those are their skills gained while running, but they are expressed quite seriously! A scientist, who also participates in the conversation, cites data, but is answered: “Don’t talk nonsense! I run every morning and see what happens…” Such a discussion is not constructive!
In Latvia, the basis of the economy is still forestry and agriculture. The importance of the IT sector and metalworking is growing, but the first two still remain. If short-sighted policy plans to reduce the money to be invested in road improvement, we will not be able to compete in Europe with product delivery on “further or worse” roads! They don’t understand that in the Saeima. They talk about a concert hall, which maybe is needed, but they don’t talk about infrastructure in rural areas, its improvement, so that it doesn’t require even larger funds later.
What do you think the Constitutional Court will say in connection with the reform?
One can only turn to the court regarding a specific case, not the reform as a whole. That is not good! If a municipality wins individual cases, this victory will be for a specific, relatively narrow solution, not for the reform as such. The fact that we are moving away from a democratic and society-engaging management process is clear. That is the most unpleasant thing. In Aloja Municipality, we have worked, developed the environment and we see that, although the number of inhabitants is shrinking, the proportion between old people and working-age people is changing for the better, the municipality’s entrepreneurs increase the volume of production every year, invest in development! This year we will have two new production facilities: in food production and woodworking.