Inzko wrote to Zvizdić, Novalić and Konaković: Urgently resolve the issue of financing the City of Sarajevo

High Representative Valentin Inzko, regarding the difficult financial situation in which the City of Sarajevo found itself after the entry into force of the Law on Amendments to the Law on the Allocation of Public Revenues of the Federation of Bosnia and Herzegovina, which ceased to be financed by both federal and cantonal levels of government, sent a written request to Denis Zvizdić, Chairman of the Council of Ministers of Bosnia and Herzegovina, Fadil Novalić, Prime Minister of the Government of the Federation of Bosnia and Herzegovina, and Elmedin Konaković, Prime Minister of the Government of the Sarajevo Canton, with the aim of urgent and constructive engagement in resolving both the issue of financing the capital of Bosnia and Herzegovina and its status.

The news agency Patria publishes the High Representative's letter in full:

- I am writing to you to request that you urgently and constructively engage in resolving the problem that poses a serious challenge to the financial stability and sustainability of the City of Sarajevo. The urgent need to resolve the crisis faced by the authorities of the City of Sarajevo was once again highlighted by the Mayor of Sarajevo, Ivo Komšić, in a letter addressed to you on September 1, 2015.

Although the issue of financing the City of Sarajevo has never been adequately regulated, the situation has significantly worsened after the adoption of the Law on Amendments to the Law on the Allocation of Public Revenues of the Federation of Bosnia and Herzegovina in May 2014.

By changing the method of distributing indirect tax revenues to individual local self-government units, the aforementioned amendments created a situation in which there is neither a legal basis nor a practical possibility for the Sarajevo Canton to participate in the distribution of indirect tax revenues to local self-government units within its territory. Instead, local self-government units receive revenues directly from the Single Account of the Federation of Bosnia and Herzegovina.

However, the City of Sarajevo has been completely omitted and, as a result, has not received revenues from the Single Account of the Federation of Bosnia and Herzegovina since May last year, when the aforementioned amendments entered into force and the Sarajevo Canton stopped financing the City. This situation has reached a point where the financing of the City of Sarajevo, in terms of performing its duties, as well as the very functioning of the City, has been called into question.

I am sure you will agree that this is an unacceptable situation that needs to be urgently corrected. For this to happen, an appropriate legal solution must be found without delay that will ensure both the status and the issue of financing the City of Sarajevo in a fair and sustainable manner.

The rulings of the Constitutional Court of the Federation of Bosnia and Herzegovina concerning the City of Sarajevo have not yet been implemented, and the competent authorities will have to address them. Of particular importance for the financing issue is the recent ruling of the Constitutional Court of the Federation of Bosnia and Herzegovina, no. U-74/14 of June 10, 2015 (Official Gazette of the Federation of Bosnia and Herzegovina, no. 57/15), according to which the new Article 24 of the Law on the Allocation of Public Revenues of the Federation of Bosnia and Herzegovina (Official Gazette of the Federation of Bosnia and Herzegovina, nos. 22/06, 43/08, 22/09 and 35/14) ceases to be valid. I expect the competent authorities to resolve this issue as soon as possible in a manner that preserves the status of local self-government units, including the status of the City of Sarajevo, in accordance with the aforementioned ruling of the Constitutional Court.

In the meantime, there is an urgent need to find and adopt a temporary solution that will ensure current financing and thus ensure the continuation of further financing of the City of Sarajevo until this problem is systematically resolved. Such a temporary solution is achievable and must be introduced without further delay.

My office is at your disposal for any assistance you may need in identifying and implementing a temporary solution and a longer-term model for financing the City of Sarajevo. To that end, my Office will contact your offices shortly to discuss the modalities available to us,” Inzko stated.