ILLEGAL CONCESSION OF PARKING TICKET COLLECTION SERVICES (2018 onwards)

The case study uses the example of JKP “Pijace i parkinzi” Zrenjanin to show the illegal practice of public utility companies in local self-governments that, contrary to imperative legal norms, concede for a fee the collection of parking fines to economic entities that are not authorized to perform communal activities.

In accordance with the Law on Communal Activities, parking tickets collection is a communal activity (part of the communal activity of public parking lots management). Utility activities are performed by specialized utility companies, but this work can be entrusted to another company or entrepreneur, in compliance with the principles of competition and in accordance with the provisions of the Law on Public-Private Partnerships and Concessions (LPPC) and the Law on Public Procurement (LPP).

Therefore, after the parking fee debt has matured, the public utility company that is authorized to collect parking tickets can initiate the procedure of forced collection, in accordance with the Law on Enforcement and Security Interest; alternatively, the utility company can transfer the collection of debt to another business entity in the appropriate public procurement procedure.

In this particular case, however, after the claim was due, JKP “Pijace i parkinzi” Zrenjanin did not initiate the enforcement proceeding, nor did it entrust the performance of communal activities to another economic entity through the appropriate public procurement procedure. Contrary to all the above-listed regulations, JKP “Pijace i parkinzi” stipulated a cession agreement and ceded the debt collection to the business entity “BDF sistem plus” d.o.o. from Belgrade.

Since the Law on Obligations states that only the claims whose transfer is not prohibited by law can be transferred to a third party, we believe that this and all similar agreements are absolutely null and void. If an interested person would determine in court the nullity of such contracts concluded by local governments, due to the obligation to annul the consequences of the null and void contract, it would be very difficult to predict the extent of financial consequences for companies in charge of parking services and local government budgets.

The most important consequence of the described illegal and nonpurposive decisions of this public utility company is that citizens bear far higher costs than those that would exist if this company directly collected parking fines, in accordance with its powers and regulations. This is especially true of completely unnecessary court costs, which should not even exist, since this is a claim based on the utility service.

Due to all the above, the State Audit Institution should include in its audit plans the activities of public utility companies, where under the guise of an agreement on cession of claims, the execution of utility activities is illegally transferred to unauthorized entities. That would also be a great opportunity for the State Audit Institution to evaluate both the legality and the purposefulness of such behavior of public utility companies, taking into account legal regulations as well as bylaws, adopted at the level of local self-governments.