ANNUAL REPORT for the implementation of the PULSE Project WITH DETAILED INFORMATION FOR JULY – SEPTEMBER, 2019 AND GENERALISED INFORMATION FOR PROJECT YEAR FOUR ANNUAL REPORT for the implementation of the PULSE Project Table of contents LIST OF ABBREVIATIONS 5 Introduction 6 Chapter 1. KEY ACHIEVEMENTS IN THE REPORTING PERIOD 14 Chapter 2. PROJECT IMPLEMENTATION 17 Expected Result 1: Decentralisation enabling legislation reflects local government input 16 Activity 1.1. Local government officials participate in sectoral legislation drafting grounded on the European sectoral legislative principles 1.1.1. Preparation and approval of strategies for sectoral reforms 20 1.1.2. Preparation of sectoral legislation 32 1.1.3. Legislation monitoring 36 1.1.4. Resolving problem issues and promotion of sectoral reforms 38 1.2. Local governments and all interested parties are actively engaged and use participatory tool to work on legislation and advocating for its approval 1.2.1 Support for approval of drafted legislation in the parliament: tools for interaction with the Verkhovna Rada of Ukraine (VRU) 39 1.2.2 Support to approval of resolutions and directives of the Cabinet of Ministers: tools to interact with the Cabinet of Ministers of Ukraine 44 1.3. Local governments improved their practice and quality of services because of the sound decentralised legislative basis for local governments 1.3.1. Legal and technical assistance 54 1.3.2. Web-tools to increase the efficiency of local government activities 54 1.3.3. Feedback: receiving and disseminating 56 Expected Result 2: Resources under local self-governance authority increased 58 Activity 2.1. Local self-government resources are increased ensuring local government financial autonomy 2.1.1. Tools to increase own resources of local governments 59 2.1.2. Dissemination of best practices and replication of experience 63 2 2 July – September, 2019 Activity 2.2. Tool for local government to access additional financial resources are in place and utilised 2.2.1. Capacity building for local government officials 64 2.2.2. Promotion of access to resources 64 Expected Result 3: Capacity of stakeholders increased 67 Activity 3.1. Local governments and stakeholders are informed and capable of carrying out new roles and responsibilities flowing from decentralisation reform 3.1.1. Capacity building for local officials at the local level 68 3.1.2. Capacity building for local officials at the oblast and rayon level 71 3.1.3. Training librarians and communicators of reforms (in cooperation with IREX) 73 3.1.4. Capacity building of non-government stakeholders (in partnership with IREX) 76 Activity 3.2. Communication and outreach of decentralisation reform is enhanced 3.2.1. Creating communication channels for central authorities outreach and messaging on decentralisation reform progress in various sectors 77 3.2.2. Strategic messaging through different media 79 Activity 3.3. Increased public awareness of reform successes and trust in local governments 3.3.1. Supporting Offices for Reform Implementation Support 88 3.3.2. Spotting Reform Successes 92 3.3.3. Promotion of reform successes 92 3.3.4. Attracting Youth and Teenagers to Decentralisation 94 Chapter 3. IMPLEMENTATION PROBLEMS AND BARRIERS 95 Chapter 4. SUCCESS STORIES 98 Chapter 5. COOPERATION WITH OTHER PROJECTS 110 Chapter 6. ESTIMATED SCHEDULE FOR THE NEXT QUARTER 114 ANNEXES: 115 List of Annexes: 3 3 ANNUAL REPORT for the implementation of the PULSE Project Annex А. Activities PULSE Project conducted in Project Quarter Four of project Year Four. Annex В. Detailed information of events conducted under the "Itinerary of Successes" nation- wide exchange study tour Project component. Annex С. List of Cabinet of Ministers regulatory and legal documents supported by PULSE Project experts with significant impact on the decentralisation reform. Annex D. List of sub-agreements concluded by AUC and PULSE Project sub-partners. Annex E. Detailed information about legislation application laboratories conducted in AUC Regional Offices. Annex F. Project Monitoring and Evaluation Plan. Annex F.1. List of communities receiving consultant assistance from the PULSE Project in 2019. Annex F.2. Number of Projects implemented in Ukrainian cities in 2019. Annex F.3. Distribution of certain indicators by regions. 4 4 July – September, 2019 LIST OF ABBREVIATIONS AUC – Association of Ukrainian Cities AUC RO – Regional Office of the Association of Ukrainian Cities AUNGO – All-Ukraine non-governmental organisation CAS – Center for Administrative Services CEC – Central Elections Commission CMU – Cabinet of Ministers of Ukraine CSEA – central state executive authorities CTC – consolidated territorial community HCC – housing construction cooperatives HCE – health care establishments IRC – inclusive resource center LGS – local governments MCTD – Ministry of Community and Territorial development of Ukraine MCU – Ministry of Culture of Ukraine MESU – Ministry of Education and Science of Ukraine MFU – Ministry of Finance of Ukraine MHCU – Ministry of Health Care of Ukraine MIAU – Ministry of Internal Affairs of Ukraine MIU – Ministry of Infrastructure of Ukraine MLSPU – Ministry of Labour and Social Policy of Ukraine MOTIDPU – Ministry of Temporarily Occupied Territories and Internally-Displaced Persons of Ukraine NASU – National Audit Service of Ukraine NEURC – National Energy and Utilities Regulatory Commission of Ukraine NFS – National Fiscal Service of Ukraine NGO – non-governmental organisation NRDF – National Regional Development Fund NSS – National Social Standards NSSN – National Social Standards and Norms OPU – Office of the President of Ukraine PIT – personal income tax RLD – regulatory and legal document SMCA –State Military and Civilian Administration STSU – State Treasury Service of Ukraine TCU – Tax Code of Ukraine UTG – Unified Tariff Grid UWLGA – Ukraine-Wide Local Government Associations SEA – state executive authorities 5 5 ANNUAL REPORT for the implementation of the PULSE Project INTRODUCTION The local government reform in Ukraine and the decentralisation reform started on April 01, 2014. It has been almost four years now, since the PULSE Project started in mid-December, 2015 and continues to work shaping the proper legislative framework for decentralisation reform in Ukraine, making sure local governments provide their input to the preparation and implementation of decentralisation policies, increasing resources of local governments and enhancing their capacity to effectively manage them, as well as improving the professional level of all stakeholder groups involved in the reform. One can judge about the achievements and the level of activity of the PULSE Project can be judged in part by the data provided in Section 1 of this report and by the list of activities performed in Quarter 3 of 2019 only (Annex A). The situation in local self-governance and its key sectors can be characterised by the following trends: ● The last quarter of 2018 and the nearly three quarters of the 2019 calendar year were marked by high degree of fierce political struggle. During this period, the presidential and parliamentary elections took place. There was a complete reboot of government elites and institutions. These processes have practically hindered the implementation of the reform. Both the previous and the newly elected (in July 2019) convocations of the parliament did not approve any legislation aimed at promoting the reform during the reporting period. Fortunately, these violent political turbulences did not prevent the new CTCs from organising initial elections (although there were numerous attempts to disrupt the CTC elections) and did not stop community consolidation around cities of oblast significance. ● The project implementation in the reporting period took place under two national governments (the 19th Cabinet of Ministers of V. Groisman and the 20th under O. Honcharuk). The Groisman government tried to actively demonstrate the success of the reform, but these attempts were a complete fiasco without the support from the parliament. However, in the reporting year, the number of new CTCs slightly increased, but this was exclusively due to the "carryover" tendency of the previous period. The Verkhovna Rada did not approve new acts that would introduce qualitative changes in the reform and activate it, although at the beginning of December, 2018, there was an event with the participation of President of Ukraine P. Poroshenko, Speaker of the Verkhovna Rada A. Parubiy, and Prime Minister V. Groisman, which declared the phase of active continuation of the decentralisation reform under the slogan "600 Day Action Plan", and although in February, 2019 the Cabinet of Ministers issued Directive # 77-p and outlined the steps needed to continue the reform. In fact, nothing happened. None of the "New 600 Day Action Plan" items were accomplished. In the opinion of PULSE Project experts, the reason for this was political intrigues and battles on the common electoral field between then-incumbent President Poroshenko and then Prime Minister Groisman during the 2019 elections. In addition, all other politicians being aware that Groisman was running during the parliamentary elections with his own political force decided not to let him use the success of this reform as a "trump card" to bring his political party to the new Parliament. Thus, the huge managerial and PR efforts of the Groisman government aimed at promoting the image of the "father of the successful decentralisation