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The entities of local self-government are rural municipalities and cities. Rural municipalities and cities resolve local issues within the framework of uniform state legislation.

The general principle is that decisions are made as close to an inhabitant as possible – at the so-called grassroots level. In cities and rural municipalities, local circumstances are understood better, and resolution of local issues is the most important task of the local government. The state cannot monopolise making of such decisions.

Local government:

• is based on the division of the territory of the state into administrative units

• is exercised by democratically formed legislative and executive bodies

• with regard to local issues, can also be exercised by means of opinion polls or public initiative

Local government is based on the following principles:

• independent and final resolution and arrangement of local issues

• mandatory guarantee of everyone’s lawful rights and freedoms in its administrative territory

• observance of law in the performance of its functions and duties

• responsibility for the performance of its functions

• transparency of activities

• provision of public services under the most favourable terms

• inhabitants of the rural municipality or city have the right of participation

Local government bodies are:

• a city or rural municipality council – the representative body of a local government elected by the residents of the rural municipality or city with the right to vote pursuant to the relevant Act

• a city or rural municipality government – the executive body formed by the council

A rural municipality government is run by the rural municipality mayor and a city government by the mayor.

Local government elections

Local government councils are elected by way of general, uniform and direct elections for a term of four years, as provided for in the Local Government Council Election Act. Voting is secret. The elections are held on the third Sunday in October everywhere in Estonia.

All persons who have attained 18 years of age and whose permanent residence is located in the administrative territory of the rural municipality or city have the right to vote at local government council elections. Persons of undetermined citizenship and citizens of other states who have permanent residence permit or permanent right of residence in Estonia also have the right to vote.

Estonian citizens and citizens of the European Union who have attained 18 years of age by election day and whose permanent residence (i.e. residence the address details of which have been entered in the Estonian population register) is located in the corresponding rural municipality or city have the right to stand as candidates.

Local government council

The number of local government council members depends on the number of residents in the local government unit. The number of members of the next composition of a council is determined by a resolution of the council, it shall be odd (at least seven) and it is determined based on the information held in the population register, according to the number of residents in the rural municipality or city as at 1 June of the election year.

The council elects the rural municipality or city mayor for a period of four years. The rural municipality or city mayor presents to the council the candidates for the members of rural municipality or city government. The council is competent to authorise the candidates to office. The government can consist of politicians and/or officials. Members of the council cannot be members of the government.

Council sessions are public, while government sessions are usually held in camera.

The office of a rural municipality or city is directed by the rural municipality or city secretary, whose duties include preparation of the documents for government sessions and ensuring the legality of the legislation passed.

Budget

Local governments have independent budgets. The main sources of budget revenue are the income tax, land tax, and allocations from state budget. The annual state budget includes support to local governments with a weaker revenue base (from the equalisation fund and the support fund). The purpose of the equalisation fund is harmonisation of the local governments’ possibilities upon the provision of public services. The support fund supports local governments upon the performance of their duties. Support is provided on a general basis, submission of applications is not required.

Local government councils have the right to impose taxes and duties pursuant to law.

Functions of local governments

A city or rural municipality organises in its administrative territory:

• social assistance and services

• welfare services for the elderly

• youth work

• housing and utilities

• water supply and sewerage

• public services and amenities

• waste management

• spatial planning

• public transportation within the rural municipality or city

• maintenance of rural municipality roads and city streets

The functions of a local government include the organisation, in the rural municipality or city, of the maintenance of pre-school child care institutions, basic schools, secondary schools, hobby schools, libraries, community centres, museums, sports facilities, shelters, care homes, health care institutions and other local agencies if such agencies are in the ownership of the local government. Payment of specified expenses of such agencies from the state budget or other sources may be prescribed by law.

Additionally, local governments resolve and organise local issues which are assigned to them by other Acts or which are not assigned by law to other persons.

Competence of local governments

Councils and governments have the right to issue regulations as legislation of general application.

• Councils pass resolutions and governments pass orders as legislation of specific application.

• Legislation passed by a council or government is valid in the administrative territory of the local government.

Pursuant to law, the following are within the exclusive competence of a local government council:

• establishment and passage of the rural municipality or city budget

• decisions on imposition of taxes, taking of loans and municipal property-related issues

• preparation and approval of the statutes and development plan of the rural municipality or city

• decisions on the alteration of boundaries of the rural municipality or city and on the formation of rural municipality or city districts

• election and release of the chairman of the council and of the rural municipality or city mayor

• establishment of public servants’ salary grades and salary rates

• formation and dissolution of council committees