Local Governments

There are 79 local government units in Estonia among which there are 15 towns and 64 rural municipalities. All local authorities decide and organize independently all local issues and all local authorities have to implement same tasks and provide the same range of services to their inhabitants regardless of their size.


Local Government System in Estonia


There is a one-tier local government system in Estonia since reforming and restructuring of legal and financial basis for local self-government in 1993. All local government units – towns (linn) and rural municipalities (vald) – are equal in their legal status.

All local issues are resolved and regulated by local governments, which operate independently in accordance with law. Duties may be imposed on local governments only pursuant to law or by the agreement with the local government. In addition to the municipal towns, there are 37 towns (as settlement units within a municipality) that are not administrative units.

For decentralizing local power local authorities may form rural municipality or city districts with limited authority. The composition and operations of a rural municipality or city district is regulated by the statute of the local authority. Currently there are city districts in Tallinn and also in Hiiumaa (as of after the local government reform).

All local authorities are a part of a county. Local authorities can be members of a regional association of local authorities and national association municipalities (Association of Estonian Cities and Rural Municipalities)

In addition to the administrative units (town, rural municipality, county), the territory is also divided into settlement units: either villages, small towns or towns and cities without municipal status. Village is generally sparsely populated or densely populated rural area with less than 300 inhabitants. Small towns, towns and cities without municipal status are densely populated urban areas, of which small towns and towns generally have at least 300 inhabitants and cities at least 1000 inhabitants.


Structure of Local Authorities


All local issues are organized by the representative body of a local authority - municipal council (volikogu) - which is elected by the residents of the rural municipality. Municipal council forms the executive body i.e. municipal administration (valitsus).

The council is elected at general, uniform and direct elections by secret ballot for a term of four years.  Every Estonian citizen and citizen of the European Union who has the right to vote, who has attained 18 years of age by the last day for the registration of candidates and whose permanent residence is located in the corresponding rural municipality or city not later than on 1 August of an election year has the right to stand as a candidate. A person in active service in the Defence Forces or a person who has been convicted of a criminal offence by a court and is serving a prison sentence shall not stand as a candidate for election to a council.

The current council determines the number of members in the following council. The number depends on the population of a local authority, has to be an uneven number and at least 7.

Chairman (volikogu esimees) is the head of the council. The majority of the council elects the chairman of the council by secret ballot. The chairman organizes the work of the council, represents the council and fulfils other duties imposed by law or municipal statute. The position of chairman of the municipal council and deputy chairman may be remunerative based on a resolution of the municipal council and municipal council has the right to pay remuneration to its members for the participation in the work of the municipal council and compensation for expenses incurred in the performance of tasks assigned to them by the municipal council. Municipal council member can also be a member of the Riigikogu during his or her term of authority (in this case no remuneration will be paid).

The council may form both standing and ad hoc committees (alaline/ajutine komisjon) as determined in the statute of a local authority. Law prescribes only the formation of an audit committee (revisjonikomisjon) consisting of at least three members which verifies and assesses the activities of a rural municipality or city government. The chairmen of all committees and all members of the audit committee must be elected from among the council members.  Formation and tasks of all other committees is to be regulated in municipal statute. Most local authorities foresee that half of the members of the committees have to be the members of the council (except the audit committee).

The management of the following issues is within the exclusive competence of the municipal council:

  • decisions related to the budget, taxes, fees and duties, loans and municipal property;
  • alteration of the boundaries of a local government, formation of municipal districts;
  • approval of the statute and the development plan of the local government;
  • decisions on general issues concerning municipal council and government (election of the chairman of the council and the mayor, confirmation of a new municipality, determination of the wage conditions for the council and government, formation and liquidation of municipal council committees etc).

The main function of municipal council is making the most important and strategical decisions about local matters in education, culture, social welfare or public health and direct the coordinated development of different aspects of local life.

The government is appointed to office for the period of the authorities of the municipal council. The head of a government is the Mayor (linnapea, vallavanem), who is elected and released by council. The members of the government are confirmed to office on the proposal of the municipal mayor.

The government may include municipal employees or political appointees. Members of the council cannot be members of the government. While council sessions are generally open, government sessions are closed. Working procedures are determined by municipal statute.

The mayor is also the head of the municipal administration. Usually the administration consists of departments and the office (kantselei). Organizational structure of municipal administration is determined by municipal council and differs in smaller and bigger municipalities, though every local authority has to have a position of the secretary of city or rural municipality secretary (linnasekretär, vallasekretär). The town or rural municipality is the head of the office. The main tasks of the secretary are to prepare the materials for the sessions of the government and the council. The secretary is also responsible for the regulations that are being passed to be legally correct. In Tallinn and in other larger local authorities the council office is separated from government office.

Towns and rural municipalities may be divided into municipal districts (linnaosa, osavald) with a limited authority. The general principles of the formation of districts is regulated by the Local Government Act. The formation of a municipal district is stated in the statute of the municipality which regulates also its competence, territory in which it operates and principles its assembly is formed and the chairman elected. As of the local government reform only the assembly is the obligatory body of district (instead of the administration which was obligatory before the reform).

Municipal development plans

Every city and rural municipality has to have a development plan and a budget strategy on the basis of which the development of different fields of life is integrated and coordinated.

A development plan has to stipulate at least the following:

  • long-term directions in and needs for the development of the economic, social, cultural and natural environment and the health of the population;
  • analysis of the current status of problems and opportunities by areas of activity;
  • strategic objectives in areas of activity together with the effect to be achieved until the end of the development plan period;
  • activities necessary for the performance of the strategic objectives until the end of the development plan period.

Additional Information


Tasks of Local Authorities



The main tasks of local authorities are stated in the Local Government Organisation Act. According to the constitution functions may be placed to local authorities only by law or mutual agreement. All local issues are dealt with and resolved by local authorities unless assigned to other persons according to law.

The functions of a local authority include the organization of the provision of social services, the grant of social benefits and other social assistance, welfare services for the elderly, cultural, sports and youth work, housing and utilities, the supply of water and sewerage, the provision of public services and amenities, waste management, spatial planning, public transportation within the rural municipality or city, and the construction and maintenance of rural municipality roads or city streets unless such functions are assigned by law to other persons.

The functions of a local authority also include the organization 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 authority. Payment of specified expenses of such agencies from the state budget or other sources may be prescribed by law.

Local authorities may arrange the provision of certain public services through the private sector (contracting out to private companies or non-profit organisations). They may also establish agencies or joint agencies with other local authorities for the provision of services and be a partner or shareholder in a company, found foundations or be a member of non-profit association.

If necessary some of the local services can also be used in another local authority while the local authority the person lives in has an obligation to compensate this.


Local Democracy: City and Rural Municipality Districts


Local Democracy and new management models in merged municipalities

One of the topical issues in the discussions about administrative reform was the issue of the representation of smaller communities in the new municipality. Ministry of the Finance issued a guidance material (PDF) with suggestions for management models for decentralizing local power. One of the models included the establishment of city or rural municipality districts. Others included establishing community boards, electing head of settlement units (city, town, small town and village heads) and establishing territorial local authority sub-units (service centres, district administration) or agencies under the administration of rural municipal agencies (divisions) in more distant areas (smaller centres).

Municipal districts (City and Rural Municipality districts)

City and rural municipality district (municipal district) is a unit which operates in the territory and within the composition of a local authority pursuant to its statutes approved by the municipal council. Its objective is keeping the local initiative and identity, involvement of the residents of a local authority in deciding on local issues and representing regional interests in the performance of local government functions.

Municipal district assembly

During the formulation of the legislation regarding municipal district more flexible solution was chosen than the previously existing, leaving more alternatives for determining their establishing procedure, structure and tasks from which to choose and decide by local authorities themselves. Only obligatory body is the assembly, election of the district head or establishing a district administration is voluntary. Municipality district assembly is formed as the representative body of the residents, and the members are elected on the basis of the democratic principle pursuant to the statutes.

There are three main alternatives for establishing district assemblies in practice:

  • based on the election results, i.e. assembly is formed of the members of the council elected from the districts territory, additionally candidates who didn’t get elected from the territory can be involved also;
  • based on the election results and on the representation of the villages, i.e. assembly is formed of the members of the council elected from the districts territory, and additionally representatives of its villages;
  • based on the election results and on the representation of interest groups, i.e. assembly is formed of the members of the council elected from the districts territory and representatives of interest groups.

The numbers of members of district assemblies established currently ranges from 3 to 15 members, but the most common number is 7.

Municipal district assembly elects the chairman and is competent to take a position and make proposals on all issues concerning the functioning of the local government or local way of life in its territory.

Currently there are municipal districts in the following local governments:
1) Haabersti, Kesklinna, Kristiine, Lasnamäe, Mustamäe, Nõmme, Pirita ja Põhja-Tallinn City District in Tallinn City;
2) Paikuse, Audru and Tõstamaa Rural Municipality District in Pärnu City;
3) Kihelkonna, Laimjala, Leisi, Orissaare, Pöide, Salme, Pihtla, Torgu, Mustjala, Valjala Rural Municipality District in Saaremaa Rural Municipality;
4) Vigala Rural Municipality District in Märjamaa Rural Municipality;
5) Martna, Kullamaa, Nõva and Noarootsi Rural Municipality District Lääne-Nigula Rural Municipality;
6) Emmaste, Pühalepa, Käina and Kõrgessaare Rural Municipality District in Hiiumaa Rural Municipality;
7) Juuru and Kaiu Rural Municipality District in Rapla Rural Municipality;
8) Järvakandi and Kehtna Rural Municipality District in Kehtna Rural Municipality.

Municipal district administration

The practice of establishing municipal district administration differs. Some of the municipalities have established the position of a municipal head and municipal district administration (osavalla valitsus) as a regional sub-unit of local authority. Others have not appointed the municipal head nor established an administration but have established district centres (osavalla keskus) or service centre (teenuskeskus) as local authority sub-units for organizing the management of municipal district and to provide closer public services in the area.

Community Board

In addition to establishing municipal districts in accordance to the law, there is an alternative to establish community board which is not regulated by law, leaving more decision power about its establishment procedure and tasks to local authorities. Community boards have been established in Lääne-Nigula, Jõgeva, Mustvee, Türi, Alutaguse, Räpina and Saaremaa rural municipalities.

Similar to municipal district assembly, community board is regional (territorial) advisory body to the council which operates in the territory and within the composition of a municipality pursuant to its statutes approved by the local authority. Community board may be formed of the residents elected to the municipal council, residents who didn’t get elected to the council and representatives of its villages and interest groups comparable to district assemblies.

The composition and functions of a community board are laid down its statutes (or in the statutes of a local authority). Its tasks may involve taking a position and making proposals on all issues concerning the community (the territory on which it is established), e.g. about road construction and investments needs, management of sports and cultural events, public transport schedules and changes in them, operation of local authority agencies and the quality of public services in their territory and proposing their representatives to the committees of local council.

Establishing community boards is generally organized by the local administration who in some cases provides the rooms for its activities or compensates its members taking part in its work. As community board as a term is not set by law, there are similar representative bodies in municipalities called differently, e.g. regional board (piirkonnakogu), regional advisory board (piirkonna nõukoda).

Territorial Local Authority Sub-units

More often than the establishment of municipal districts or community boards rather the establishment of territorial sub-units of local authority were agreed upon in the amalgamation agreements. These sub-units are generally called service centres (teeninduskeskused), but are also called administrative centres (halduskeskus), administrative service centre (haldus-teenuskeskus), service point (teeninduspunkt) etc.

Although not a legal prerequisite the establishing of service centres were usually agreed upon in an amalgamation agreement. Their tasks were laid down differently, most commonly either based on the functions it provides (e.g. accepting applications preliminary counselling, receiving payments, managing regional development matters, lower level social welfare and activities concerning population register) or by the competences/ officials present in it (e.g. every service centre has three officials: social worker, assistant-registrant and a project manager- development specialist).

Several municipalities agreed also in establishing the positions of regional managers, which in their essence are rather similar to the position of a municipal district head or a head of a service centre (e.g. in Paide City, Viljandi Rural Municipality and Põhja- Sakala Rural Municipality).


Local Governments Financial Management

All matters of local life are organised and resolved by local authorities, which operate independently on the basis of law. They also have independent budgets, which are formed on the basis of and according to the procedure set out in the Local Government Finance Management Act.

Local authorities comprise a significant part of general government finance. Their consolidated share in total general government expenditure is 25%.

The Ministry of Finance develops the financing (incl. equalisation and support fund division) and financial management principles of local authorities.

The main form of cooperation between local authorities and central government is the annual budget negotiation workgroups of the government committee established by the government and the delegation of the Local Government Associations Cooperation Assembly. The support allocated to local authorities, their cost base and matters concerning tax policy are discussed in the financial and tax policy workgroup formed by the Ministry of Finance.

Additional Information


State Supervision

The purpose of the state supervision is to ensure the lawfulness and feasibility of municipal administrative procedures. External control is implemented by ministries, in some matters also by agencies and inspections and by Legal Chancellor (Ombudsman) and the State Audit Office.

Ministry of Justice exercises control over the lawfulness of local government administrative acts and procedures, Ministry of Finance over the lawfulness and justification of use of state assets. State supervision is carried out based on feasibility and purposefulness.

The Legal Chancellor carries out supervision over the legislation of local authorities for conformity with the Constitution and laws. The State Audit Office exercises control over the municipal use of state and municipal assets, allocations for specific purposes and subsidies granted from the state budget, funds allocated for the performance of state functions and funds of the European Union and performance of obligations to the EU thereof.


Associations of Local Authorities

One of the most important and common forms of municipal co-operation is being a member of an association of local authorities, which operate according to the Local Government Associations Act, the Non-profit Organisations Act and other relevant laws. As of the local government administrative reform there is one national association (instead of two associations before the reform) and 14 regional associations (instead of 15 associations before the reform). Regional as well as national associations represent their members interests in relations with central authorities. Membership of an association is voluntary.

Currently there is one national association - Association of Estonian Cities and Rural Municipalities which was formed in 2018 by merging the activities of the Association of Estonian Cities (established in 1920) and Association of Estonian Rural Municipalities (established in 1921 and both re-established in 1990).

The objectives of a national association are through the joint activity of the local authorities:

  • to foster the development of local government in general,
  • to represent its members,
  • to protect the common interests of its members,
  • to promote co-operation between its members and to create possibilities for improved performance of the statutory functions for its members.

Until the formal consolidation on the activities of two national associations a joint organ, the Co-operation Assembly of Associations of Local Authorities (Omavalitsusliitude Koostöökogu) which was established in 1994 conduct negotiations with the Government of the Republic on behalf of both associations.

Regional associations perform local government functions on behalf of those local authorities where the council has decided that the functions should be performed jointly through the association (and the general meeting has decided should be performed jointly through the association) and also functions set by law.

According to the law, regional associations have to participate in the preparation process of national spatial plan and be involved in the management of public transport in the county where necessary.

The objectives of a county association are, through the joint activity of the local authorities in the county:

  • to foster balanced and sustainable development of the county,
  • to preserve and promote the cultural traditions of the county,
  • to represent the county and the members of the association,
  • to protect the common interests of its members,
  • to promote co-operation between the local authorities in the county and
  • to create possibilities for improved performance of the statutory functions of its members.
Last updated: 1 November 2019