QUARTERLY REPORT for the Policy for Local Self-Governance (PULSE) Project

OCTOBER – DECEMBER, 2017 EIGHTH QUARTER OF PROJECT IMPLEMENTATION QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

TABLETABLE OF OF CONTENTS CONTENTS

List of abbreviations 4

Resume 5

Chapter 1. KEY ACHIEVEMENTS IN THE REPORTING PERIOD 5

Chapter 2. PROJECT IMPLEMENTATION 8

Expected Result 1: Decentralisation enabling legislation reflects local government input 8

1.1. Local government officials participate in sectoral legislation drafting 11 grounded on the European sectoral legislative principles

1.1.1. Preparation and approval of strategies for sectoral reforms 11

1.1.2. Preparation of sectoral legislation 20

1.1.3. Legislation monitoring 23

1.1.4. Resolving problem issues and promotion of sectoral reforms 24

1.2. Local governments and all interested parties are actively engaged and use 34 participatory tool to work on legislation and advocating for its approval

1.2.1 Support for approval of drafted legislation in the parliament: 34 tools for interaction with the VRU

1.2.2 Support to approval of resolutions and directives of the Cabinet of Ministers: 40 tools to interact with the Cabinet of Ministers of Ukraine

1.3. Local governments improved their practice and quality of services because 49 of the sound decentralised legislative basis for local governments

1.3.1. Legal and technical assistance 49

1.3.2. Web-tools to increase the efficiency of local government activities 50

1.3.3. Feedback: receiving and disseminating 50

Expected Result 2: Resources under local self-governance authority increased 52

2.1. Local self-governance resources are increased ensuring local government 53 financial autonomy

2.1.1. Tools to increase own resources of local governments 53

2.1.2. Dissemination of best practices and replication of experience 61

2.2. Tools for local government to access additional financial resources are in place and 63 utilised

2.2.1. Capacity building for local government officials 63

2 October – December, 2017 Eighth quarter of Project implementation

2.2.2. Promotion of access to resources 64

Expected Result 3: Capacity of stakeholders increased 65

3.1. Local governments and stakeholders are informed and capable of carrying out 65 new roles and responsibilities flowing from decentralisation reform

3.1.1. Capacity building for local officials at the local level 66

3.1.2. Capacity building for local officials at the oblast and rayon level 69

3.1.3. Training librarians and communicators of reforms 69

3.2. Communication and outreach of decentralisation reform is enhanced 70

3.2.1. Creating communication channels for central authorities outreach and messaging 70 on decentralisation reform progress in various sectors

3.2.2. Creating communication channels for central authorities outreach and messaging 71 on decentralisation reform progress in various sectors

3.3. Increased public awareness of reform successes and trust in local governments 79

3.3.1. Supporting Offices for Reform Implementation Support 79

3.3.2. Promotion of reform successes 79

Chapter 3. IMPLEMENTATION PROBLEMS AND BARRIERS 83

Chapter 4. SUCCESS STORIES 85

Chapter 5. COOPERATION WITH OTHER PROJECTS 103

Chapter 6. SUGGESTED PLAN OF ACTIVITIES FOR THE COMING QUARTER 108

Annexes 109

3 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project LIST OF ABBREVIATIONS ATO – Anti-Terrorist Operation AUC – Association of Ukrainian Cities AUC RO – Regional Office of the Association of Ukrainian Cities CAS – Center for Administrative Services CMU – Cabinet of Ministers of Ukraine CTC – consolidated territorial community EU – European Union HEE – Higher Educational Establishment HMU – housing and municipal utilities sector IKC – independent knowledge check ITA – international technical assistance KSSA – City State Administration LED – Local Economic Development LGC – local government caucus (Parliamentary Inter-Faction Local Government Support Group MFD – Multi Functional Device MFR – Municipal Fiscal Register MFU – Ministry of Finance of Ukraine MLSP – Ministry of Labour and Social Policy of Ukraine MOHC – Ministry of Health Care MPES – Ministry of Public Education and Science of Ukraine NAPA – National Academy for Public Administration NCS – National Construction Standard NEURCU – National Energy and Utilities Regulatory Commission of Ukraine NGO – non-governmental organisation NJSC – National Joint-Stock Company NRDF – National Regional Development Fund NSS – National Social Standards NSSN – National Social Standards and Norms OECD – Organisation for Economic Cooperation and Development OSA – Oblast State Administration PIT – Personal Income Tax PPP – public-private partnership RSA – Rayon State Administration RSG – Reform Support Group TAB – EU Transparent, Accountable and Responsive Budgeting Process at the Local Level in Ukraine Project TIB – Technical Inventory Bureau UTG – Unified Tariff Grid UAROC – Ukrainian Association of Rayon and Oblast Councils USAID – U.S. Agency for International Development UWNGO – Ukraine-Wide Non-Governmental Organisation

4 October – December, 2017 Eighth quarter of Project implementation RESUME

PULSE is working to develop a proper legal framework for decentralisation reform in Ukraine, ensuring that local governments contribute to decentralisation policy development and implementation, increase resources under local government authority and improve local government's ability to effectively use them, and enhancing the capacity and raising the professional level of key reform stakeholders involved. PULSE is working to develop the proper legal framework for the decentralisation reform in Ukraine, ensuring the local government input in the development and implementation of the decentralisation policy, increasing the resources under local government authority and improving the ability of local governments to effectively use them, and enhancing the capacity and raising professional level of key reform stakeholders involved.

This report provides information on the Project implementation in October-December 2017. The main achievements are presented in Chapter 1. The list of events is presented in Annex A. This report provides the information about the Project implementation in October – December 2017. The main achievements are presented in Chapter 1. The list (schedule) of events is presented in Annex A.

Chapter 1. KEY ACHIEVEMENTS DURING THE REPORTING PERIOD AND CALENDAR OF EVENTS

x In the fourth quarter of 2017, the initial local elections took place on October 29 and on December 24, 2017 in 252 CTCs that united 1,141 former smaller village, town and city territorial communities. All in all, during 2017, 299 CTCs were formed (comprising 1,373 territorial communities).

x In the reporting quarter, the first results of the voluntary consolidation of territorial communities (or consolidation of CTCs according to a simplified procedure) came up. 12 village and town territorial communities joined 7 already formed CTCs (including 4 urban).

x PULSE Project regional consultants provided 3,527 consultations on legal, financial and local economic development issues, which contributed to the consolidation of territorial communities.

x The of Ukraine on December 21, 2017 approved the Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Reforms in the Sphere of Transportation Vehicle Parking” (Registration # 5364 of November 04, 2016). The law developed with the support of the AUC and PULSE Project will significantly improve road traffic in large cities.

x Approval of the Law of Ukraine “On the National Budget of Ukraine for 2018”, as well as the corresponding amendments to the Budget and Tax Codes. The approved laws determine the peculiarities and basic approaches to the formation of local budgets in 2018. Thanks to the efforts of the Association in 2018, all territorial communities secured an additional resource in the amount of more than 50 billion UAH.

x The approval of the Law of Ukraine “On Housing and Municipal Utility Services” # 2189-VIII of November 11, 2017 prepared with active involvement of AUC experts. The approved law vests local governments with powers to set all tariffs with regard to tariff component and outlines the timeline for complete monetisation of privileges and subsidies.

x PULSE Project representatives participated in 14 meetings of the Cabinet of Ministers of Ukraine and 22 meetings of the three Cabinet of Ministers Committees (on economic policy - 10; on social policy - 7; and, on regional development - 5).

x PULSE Project experts monitored 1,161 central government draft regulatory and legal documents, in particular: 112 draft laws of Ukraine, 45 draft decrees and instructions of the , 862 draft resolutions and orders of the Cabinet of Ministers of Ukraine, 136 conclusions to daft laws, law implementation plans, etc. 1,161 draft Cabinet of Ministers regulations included 428 documents (or 36.8%) dealing with local government issues. The latter included 403 (or 94.2%) supported by

5 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project PULSE Project experts, and 25 (or 5.8%) not supported by them. Of the supported draft regulations, 51 (or 12.7%) had a significant positive impact on the development of local governments in Ukraine. At the same time, the Project managed to reduce the number of regulations, which posed a potential threat to local governments by almost 40% (by 37.6%) from 9.3 % to 5.8%. x The Project conducted 8 Regional Policy Dialogue Platforms attended by 10 National Deputies of Ukraine.

x In the 4th quarter, local budget revenues grew by 13.4%, from 29.0 to 32.9 billion UAH. This is almost 2.5 times more than in the 2nd and 3rd quarters when the basic NSSN did not increase, while the growth was only 5.4%.

x The Project implemented a distance learning course “Setting up local economic development institutions” on the Prometheus platform, which brought to the registration 1,235 persons including 127 those who received certificates (which is a good indicator of effectiveness). In addition, the Project continued the implementation of the courses “Preparation and implementation of community development projects” and “Effective budget process in local governments”. All courses showed high performance. All in all, 6,821 persons participated in all the three courses and 1,270 persons received certificates.

x The Project conducted 7 expert workshops for representatives of rayon and oblast councils. 149 persons participated in the training.

x IREX, the sub-partner of the Project, offered 18 small grants to representatives of pilot libraries and non-governmental organisations from 27 consolidated communities or communities in the process of formation who conducted 102 public awareness and outreach events with the participation of 2,478 persons with different backgrounds and representatives from a wide range of institutions. These events were attended by 18 consultants of AUC Reform Offices in 15 communities to provide additional professional consultations. 19 mass media representatives were present at public awareness and outreach events. The Project conducted coordination meetings with 96 members of RSG in 15 communities.

x Six new press clubs have started working in , , , , Kirovohrad, and oblasts.

x 269 representatives of the current and new library press clubs were trained at 17 special training events to strengthen the capacity of libraries as community decentralisation information centers.

x The Project conducted the Resource for Communities information fair within the framework of the Dialogue Day with the Parliament on November 14, 2017. 10 international technical assistance projects including the USAID DOBRE Project participated in the fair.

x The Project conducted 12 press tours in AUC Regional Offices attended by 200 representatives of local and regional media.

x In October - December 2017, the Project organised 21 study tours in AUC Regional Offices attended by 447 representatives of local governments that started the process of consolidation.

x The Project conducted 101 decentralisation information points in all AUC Regional Offices attended by community residents, activists, members of local non-governmental organisations, and local government representatives.

x The Project conducted 62 legislation application laboratories with the participation of 1,686 local government representatives.

x The Project conducted the third session of the annual training cycle in preparation of territorial community development strategies with the participation of 67 communities from 22 oblasts.

x The Project conducted a workshop for its regional consultants under the title: “Prospects for the implementation of the decentralisation reform. Next steps”.

6 October – December, 2017 Eighth quarter of Project implementation

x The Project conducted the National Press Club for Decentralisation under the title: “Results and Achievements of 2017, tasks for the next year” for 120 representatives of the regional media attended by Prime Minister of Ukraine V. Groisman.

x 20 programs were broadcast on 6 central TV channels as part of the TV PULSE OF REFORM Project.

x The Project organised 3 visits at the national level with the participation of 114 local government representatives and 21 study visits at AUC Regional Offices for 447 local government representatives within the framework of the “Itinerary of Successes” nation-wide Project component.

x The Project published the fourth BOOK OF SUCCESS.

x Prime Minister of Ukraine V. Groisman participated in two events conducted by the PULSE Project in the reporting quarter (National Press Club of Reforms and Dialogue Day with the Parliament).

x Vice Prime Minister H. Zubko participated in two events conducted by the PULSE Project in the reporting quarter (Sectoral Forum and Ukraine-wide tutorial on local governance for about 600 schools).

The calendar of the PULSE Project events held in October - December 2017 is presented in Appendix A

7 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Chapter 2. PROJECT IMPLEMENTATION

ER 1: Decentralisation enabling legislation reflects local government input

Overview of the overall context of implementation of the local government reform and reform of the territorial arrangement of government institutions Influence of Project activities under this component on local governments

The reporting period saw the approval of the Law of Ukraine “On the National Budget of Ukraine for 2018” and the related amendments to the Budget Code of Ukraine and Tax Code of Ukraine.

Starting from December 01, 2017, the basic national social standards (minimum subsistence level and minimum wage) increased. This provided additional revenue flow to local budgets from personal income tax and real estate tax. At the same time, due to this, the obligations of local governments in respect to remuneration of employees of the budget sphere have grown. The increase of such standards stipulates the necessity of proper guaranteeing by the state of other volumes of inter-budget transfers next year.

During the reporting period, the processes of voluntary consolidation of territorial communities continued actively. In October and December, the initial local elections were held in 252 CTCs, which comprised 1,141 village, town, and city territorial communities. In addition to this, another 27 CTCs formed in 2017 are waiting for the Central Elections Commission to schedule the initial elections. By the end of 2017, 665 CTCs were already formed, in which local governments are formed on a new territorial basis. In the reporting quarter, one could observe the first results of voluntary accession of territorial communities (for the purpose of enlarging a CTC according to a simplified procedure). To the already formed 7 (including 4 urban) CTCs another 12 rural, settlement, territorial communities joined.

Other relevant processes in the direction of decentralization should include sectoral reforms. The greatest progress in the reporting period was achieved in the area of reforms in the health care sector. The legislative framework for the introduction of a new model for financing health care has been created. Such a model involves the transition from the maintenance of health facilities to payment for the received medical service. It is planned that in the second quarter of 2018 such a model will be introduced in primary health care facilities.

In the 4th quarter of 2017, the process of transferring the property of vocational education institutions from the state to the joint ownership of territorial communities of the oblast started, and oblast center cities received real powers to manage these institutions with regard to personnel matters. The certification of educational institutions conducted by local governments is being revoked, and the institutional audit is being replaced, in particular by municipal educational institutions, which will be held by the newly established State Service for Quality of Education of Ukraine.

Local governments have received additional control powers in the sphere of prevention and counteraction to domestic violence (the Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Prevention and Combating of Domestic Violence” of December 07, 2017, Registration # 2229). There are regulatory procedures to regulate the use of subventions to local budgets (278 million UAH) for the construction and overhaul of social housing for orphans and family-type homes. The government identified 23 cities, including 5 in consolidated territorial communities, in which it is planned to set up centers for the provision of administrative services, including services of a social nature, in the Transparent Office format. In the reporting period, local governments resolved certain issues related to the compliance with labour legislation. By the end of the year, 221 employees of local self-government bodies from 23 regions received a labour inspector's license.

The President of Ukraine registered in the Parliament a draft law (Registration # 7363 of December 06, 2017), which proposes, in particular, a significant extension of the powers of local governments in the sphere of land resources management (disposition of land plots located outside settlements, state land cadastre maintenance, and approval of land use documentation). The attention of the highest official of the state to this issue gives hope for a positive resolution of these issues in the near future. The administrative services for registration of land plots improved. The exchange of information between local governments and state

8 October – December, 2017 Eighth quarter of Project implementation executive authorities has been introduced in terms of information on rights to immovable property and land plots. There is also legislative regulation to govern the responsibility of local governments to control the quality of land in leased land plots.

One of the key laws adopted during the reporting period is the approval of the Law of Ukraine “On Housing and Municipal Utility Services”, which was developed by experts from the AUC. The approved law transfers the authority to local governments to establish all tariffs for the components of waste management services; defines the terms for complete monetisation of benefits and subsidies. One should note the introduction of monetisation of benefits and subsidies for housing and communal services providers as of January 01, 2018. At the end of 2017, an additional UAH 17.6 billion are allocated to the National Budget for this year to repay the debt of the state to housing and municipal utility enterprises for granted privileges and subsidies.

At the end of December, the Verkhovna Rada of Ukraine approved the Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Reforms in the Sphere of Transportation Vehicle Parking” (Registration # 5364 of November 04, 2016), which will significantly improve road traffic in large cities.

Status of the implementation of laws approved in 2017, in particular in the reporting quarter: - “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)”, which promotes the consolidation of CTCs according to a simplified procedure. 12 rural and town territorial communities joined already formed 7 CTCs (including 4 urban ones). Three village and town councils of such communities saw by-elections of council members. More than 10 village and town CTCs are waiting for the CEC to schedule by-elections of council members. The process is hampered by the necessity of making changes to the long-term perspective plan for the formation of community territories that are approved by oblast councils (overly politicised nature of the process). In addition, the procedure for conducting by-elections of council members in case when village and town communities from different rayons joint a CTC. - “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of the Voluntary Consolidation of Territorial Communities Located on the Territories of the Adjacent Rayons”, which regulates the process of scheduling the initial local elections in the territorial communities formed after the consolidation of territorial communities located on the territories of adjoining rayons. In the 4th quarter of 2017, the first local elections were conducted in 24 CTCs (out of 252), which included communities from different rayons. The Law of Ukraine “On Introducing Amendments to the Budget Code of Ukraine” (of December 07, 2017, # 2233-19), which defines the concept of “budgets of consolidated territorial communities” including the budgets of consolidated territorial communities recognised by the Cabinet of Ministers of Ukraine as capable in accordance with the procedure established by law was approved. VRU committees are working on the following draft laws: - “On Introducing Amendments to the Law of Ukraine “On Voluntary Consolidation of Territorial Communities” Regarding Voluntary Mergers of Territorial Communities of Villages and Towns to Territorial Communities of Oblast Significance Cities” (Registration # 6466) Adoption of the law will allow unblocking the process of consolidation of territorial communities of oblast significance cities. The AUC prepared the relevant draft law and elaborated it for the repeated second reading. - “On Introducing Amendments to Certain Ukrainian Legislation on Management of Land Resources within the Boundaries of the Territory of Consolidated Territorial Communities” (Registration # 7118), “On Introducing Amendments to Certain Ukrainian Legislation on Management of Land Resources within the Boundaries of Consolidated Territorial Communities and Resolving Other Issues in the Sphere of Land Relations” (Registration # 7118-1), and “Draft Law on Introducing Amendments to the Tax Code of Ukraine and Certain Ukrainian Legislation on Providing Incentives for Establishing and Running Small-Scale Farms and Deconcentration of Powers in the Sphere of Land Relations” (Registration # 7363). The approval of the relevant changes will increase the powers of local governments in the sphere of land relations by transferring to village, town and city councils of consolidated territorial communities the powers to manage state-owned land within the boundaries of the territory of the respective territorial communities. Representatives of the AUC participated in the consideration of the draft laws during the meetings of the relevant committees of the Verkhovna Rada and supported them. The AUC position was taken into account in the course of the preparation of draft laws.

9 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project In addition to this, the Draft Law “On Service in Local Governments”, which extends the scope of powers and opportunities in the course of the formation of professional staff at the level of local governments, needs to be approved. The AUC elaborated the draft law for the second reading and constantly takes efforts to put it back for consideration.

The PULSE Project together with the AUC contributed a lot to the processes of decentralisation and establishment of new CTCs. During 2017, 299 CTCs were established (comprising 1,373 territorial communities). In particular, in the fourth quarter of 2017, the initial local elections took place in 252 CTCs (1,141 village, settlement, city territorial communities were merged) on October 29, 2017 and December 24, 2017). During the quarter, PULSE Project regional consultants provided 3,527 consultations to communities. In addition to this, there are 27 CTCs established in 2017 comprising more than 130 territorial communities, which are waiting for the Central Election Commission on scheduling the initial local elections.

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

Progress in strategy implementation Local Government Finance Strategy

– With regard to the achievement of Operational Goal 1.1 “Preservation and Expansion of Resource Base” – in the course of introducing amendments to the Law “On the National Budget of Ukraine for 2017”, the government added 9 billion UAH to local budgets (to repay debts to utility companies for granted privileges and subsidies, to take steps for social and economic development of individual territories, and to pay salaries for employees in the health care sector).

The National Budget for 2018 actually provides for an additional resource to territorial communities in the amount of more than 50 billion UAH. (Later in the document we will describe it in details in the paragraph “Defending the positions of local governments in the Law of Ukraine “On the National Budget of Ukraine for 2018” and in Chapter 4). Local budgets will also receive 5% of rent payments for the use of subsoil resources, as well as fees for issuing licenses for commercial activities in issuing and organising lotteries. – With regard to the achievement of Operational Goal 1.3 “Improving the Efficiency of Local Taxes and Fees”, the government ensured compensation to local budgets of the revenues from the excise tax on the production and import of petroleum products to local government budgets (13.44%) to each separate local government in the case a given local government budget gets less collections than it used to get last year. – With regard to the achievement of Operational Goal 1.4 “Creation Perfect Municipal Fiscal Registers” - the AUC created the Municipal Fiscal Register as a software product containing information on real estate, communally-owned property, land parcels, will process and preserve these data and provide information separately for each local budget, as well as keep records of pupils, children of preschool age, citizens using health care services and citizens in need of social assistance, as well as registers of persons from privileged categories. In the reporting quarter, the Project introduced the software in the pilot communities, namely: provided consultations to IT, updated the installation package, and refined some modules. – With regard to the achievement of Operational Goal 2.3 “Increasing the scope of local government powers in administering and controlling the payment of local taxes and fees”, the AUC managed to simplify the procedure for setting local taxes and fees for 2018 during the discussion of amendments to the Tax Code of Ukraine. – With regard to the achievement of Operational Goal 4.1 “Preserving the Existing System of Horizontal Equalisation of Financial Sufficiency of Local Budgets” – in the course of the preparation and adoption of the National Budget for 2018, the PULSE Project managed to preserve the existing system of horizontal equalisation. At present, the AUC is engaged in the active work to preserve the ceiling rates used to calculate the baseline and reverse subsidies. – With regard to the achievement of Operational Goal 1.2 “Replacing Tax Preferences with the Targeted assistance Mechanism. Reducing the Number of Preferences”, the Cabinet of Ministers adopted Resolution # 951 “On Introducing Amendments and Considering Certain Resolutions of the Cabinet of Ministers of

10 October – December, 2017 Eighth quarter of Project implementation Ukraine Void”, which actually introduced the mechanism to monetise subsidies in Ukraine as of January 01, 2018. – With regard to the achievement of Operational Goal 2.6 “Formation of a System to Teach Effective Budgeting”, budget consultants in AUC Regional Offices performed many site visits to communities in order to provide methodological and explanatory consultations and disseminate best budgeting practices. – With regard to the achievement of Operational Goal 4.2 “Implementation of Budget Regulations in the Work of Local Councils”, the Project prepared a model budget regulation that streamlines the processes for the formation and use of financial resources for the implementation of tasks and functions by local governments during the budget period and governs the relations between different participants of the budget process. This document has been implemented in a number of communities, in particular, in oblast center cities.

Housing and Municipal Utilities Strategy In the context of the approval of the Law of Ukraine “On Housing and Municipal Utility Services” on November 0: - The Project has implemented Operational Goal 1.7 “Expanding the Scope of Service Recipients Who Are Citizens, Legal Persons – an Individual Consumer, and Legal, Which Are Collective Consumers”; - Partial implementation of Operational Goal 4.1 “Transferring Powers to Set Tariffs for All Housing and Municipal Utility Services to Local Governments. The partial implementation means transferring the powers to set tariffs for solid waste management to local governments; - The Project has implemented Operational Goal 6.1 “Make Clear Delineation of Control Functions in the Sector of Housing and Municipal Utilities between the State and Local Governments”;

Thanks to the approval of the Law of Ukraine “On Steps Aimed at the Repayment of the Debt of Heat Supply and Heat Generating Companies and District Heating and Centralised Water Supply and Sewerage Companies for Consumed Energy” and the approval of a number of supporting by-laws, the Project managed to repay the debt of district heating and water supply companies on the difference in tariffs accumulated over previous periods, thus making it possible to partially implement Operational Goal 1.4 “To Repay the Existing Difference in Tariffs”.

Due to the approval of Resolution of the Cabinet of Ministers of Ukraine # 951 of November 08, 2017 “On Introducing Amendments and Considering Certain Resolutions of the Cabinet of Ministers of Ukraine Void”, the Project managed to implement Operational Goal 1.10 “To Cancel the System of Clearing Payments (introduced by Resolution of the Cabinet of Ministers of Ukraine # 20 of January 11, 2005) and to partially implement Operational Goal 1.9 “Implement the Targeted Mechanism for Providing Privileges and Subsidies for Housing and Municipal Utility Services” under Strategic Goal # 1 “Transfer the Housing and Municipal Utility Sector Completely to the Market and Competitive Environment”. The partial implementation means the 1st stage of monetisation of privileges and subsidies, namely the monetisation of privileges and subsidies for providers of housing and municipal utility services.

Organisational Aspects and Professional Development Strategy - Partial implementation of Operational Goal 2.2 “Promoting Conditions for Regular Updating of Professional Qualifications of Local Government Officials” with the approval of the Concept for reforms in the system of professional training of civil servants, heads of local state administrations, their deputies, local government officials and local council members (Directive of the Cabinet of Ministers of Ukraine # 974 of December 01, 2017). The Directive envisages, in particular, earmarking a fixed percentage of local budget expenditures, which should be directed for modernisation of professional qualifications of local government officials. E-Governance and Public Services Strategy - The Project achieved Operational Goals 2.5 “Automating Public Services” and 3.2 “Create and Ensure Proper Functioning of the Basic Infrastructure of E-Governance” through the approval of the Law of Ukraine “On Electronic Trust Services” approved on October 05, 2017. It regulates relations in the sphere of the provision of electronic trust services (creation, verification and confirmation of improved electronic signature or stamp, certificate of electronic signature or stamp; website authentication; formation, verification and confirmation of the electronic timestamp, etc.) and electronic identification. The law represents a significant step towards the implementation of e-governance and e-economy.

11 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The Project achieved Operational Goal 2.8 “To Promoting the Environment for Interaction with Physical and Legal Persons with Regard to the Provision of All Public Services through Local Government Centers for Administrative Services” through the Cabinet of Ministers changing on December 06, 2017 the procedure for state registration (re-registration), de-registration of cars, buses, and other vehicles. The corresponding CMU Resolution outlines the legislative framework service centers working under the Ministry of Internal Affairs to perform state registration through Centers for Administrative Services. The Resolution foresees the right of the CAS administrators to connect to the MIA databases. The document also envisions a number of other important changes.

Social Protection Strategy - With regard to the achievement of Operational Goal 2.1. “Planning Expenditures from Local Budgets and National Budget and Raising Donor Funds for Improvements of the Material Base of CASs”, the Law of Ukraine “On the National Budget of Ukraine for 2018” provides for a subvention to perform the works to set up and run Centers for Administrative Services together with the provision of social services in the Transparent Office format in the amount of 150 million hryvnyas. Directive of the Cabinet of Ministers “On Certain Issues Related to Setting up and Running Centers for Administrative Services together with the Provision of Social Services in the Transparent Office Format” # 736-p of October 11, 2017 endorsed a list of oblast significance cities and CTCs, which have the intention to set up and run CASs in the Transparent Office format using the funds of the corresponding subvention. All in all, the Directive lists 23 cities including 5 CTCs.

During the reporting period, current changes were introduced to the corresponding sectoral profiles. The Project updated the Current Legislative Framework sections of the following sectoral profiles (See Table 1.1):

Table 1.1. Updates to the current legislative framework for sectoral profiles

Technical Titles of regulatory and legal Titles of regulatory and legal documents excluded area documents added laws CMU CMU instructio Decrees of the laws CMU CMU instruct resolutions directives ns of President resolutio directives ions of ministries ns ministr ies Local Finance 2 1 Public 3 3 2 education Social 1 3 1 1 protection Organisational 1 1 2 1 aspects and professional development Housing and 2 1 1 municipal utilities E-governance 1 1 2 and public services Land relations 2 3 TOTAL 8 12 6 3 2 3 1

All in all, the Project added 29 new titles to the public education sectoral profile and excluded 6 titles of regulatory and legal documents, which became void, were excluded.

Of the problem issues, which were resolved during the reporting period, one should mention the following: x The Law of Ukraine “On Housing and Municipal Utility Services” (# 2189-VIII of November 09, 2017), which will be enacted on June 10, 2018 will outline the requirements for building

12 October – December, 2017 Eighth quarter of Project implementation managers, resolve the problem of provision of building management services and payments for them; and, will set the timeframe for monetisation of privileges and subsidies (partial solution); x The Law of Ukraine “On Introducing Amendments to the Law of Ukraine “On the National Budget of Ukraine for 2017” (# 2191-VIII of November 09, 2017) provides an additional amount of 7.6 billion UAH for the repayment of the state debt for the subsidies granted by housing and municipal utility companies, which enabled these service provision companies to partially repay the accounts payable accumulated over previous periods (partial solution); x The Cabinet of Ministers of Ukraine approved Resolution # 951 of November 08, 2017 “On Introducing Amendments and Considering Some Resolutions of the Cabinet of Ministers of Ukraine Void” introducing a new simplified mechanism for the state to settle accounts with service providers for the privileges and subsidies they have provided; x The problem with bidders abusing the requirements of the tender to select the best rentor of communally-owned or state-owned property that first offers the best conditions and then refuse to conclude the property lease agreement has been resolved through the approval of the Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Procedure for Conducting a Competition for the Right to Lease State Property” (# 886 of November 22, 2017). The approved document introduces the requirement for all competition participants to pay the guarantee fee in the amount of at least 6-month rent, which is, at the same time, the advance payment for the competition winner. The fees of unscrupulous participants shall not be returned and shall be directed to the National Budget of local budgets; x The issue with the unfunded amount of the health care subvention was partially resolved. For instance, amendments to the State Budget of Ukraine for 2017 of November 30 increase the amount of the health care subvention 300 million UAH. x The issue of debts on mid-term loans of local budgets was partially resolved. According to the Law of Ukraine “On the National Budget of Ukraine for 2018”, the Cabinet of Ministers of Ukraine received a directive to submit, based on the performance during three quarters of 2018, to the Verkhovna Rada of Ukraine proposed amendments to the National Budget of Ukraine for 2018 in the part dealing with the repayment of debts on mid-term loans and interest-free loans. x The problem of upgrading the material and technical base for inclusive education was partially resolved through Resolution of the Cabinet of Ministers of Ukraine # 963 of November 15, 2017 “On Introducing Amendments to the Procedure and Conditions for the Provision of the Subvention from the National Budget to Local Budgets to Provide State Support to Persons with Special Educational Needs”. This is about abolishing restrictions on using unliquidated balance funds of the subvention and permission to use them to purchase means for psychological and physical development. x The problem with the lack of vacant slots in pre-school educational primary schools in connection with the growth of the number of children of preschool age was partially resolved through the approval of Directive of the Cabinet of Ministers of Ukraine # 871-р of December 06, 2017 “On Approving the Action Plan for 2017 - 2019 for the Step-by-Step Opening of Additional Places in Educational Institutions for Pre- School Children”. The Government of Ukraine is planning to open 96,147 places in pre-school educational institutions by 2020 by opening new communally-owned educational institutions, reorganisation of educational institutions together with opening of pre-school units, opening of private educational institutions, reconstruction of pre-school educational establishments, resuming the work of institutions that were not used for the intended purpose for a long time, opening of institutions in the reconstructed premises, etc. x The problem of excessive number of supervisory and oversight entities in the sector of public education was resolved by the approval of Resolution of the Cabinet of Ministers of Ukraine # 947 of December 06, 2017 “On the Establishment of the National Education Quality Service of Ukraine”. From now on, the issue of conducting the institutional audit (once every 10 years) of educational institutions falls within the authority of this service, while local education management entities will be deprived of the powers to perform certification and faculty examinations of educational institutions. x The problem with the absence of a transparent formula to calculate the amount of the education subvention was resolved by the approval of the Resolution of the Cabinet of Ministers of Ukraine of December 27, 2017 “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”. The formula takes into account the number of pupils, number of children with special educational needs, and the projected rates of teacher salaries, as well as takes into account adjustment rates. According to the formula, the amount of education subvention for local budgets will be calculated. x The Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation on Increasing Pensions” of October 03, 2017 # 2148 provides for the payment of 100% of pensions for employed citizens, including local government officials (not 85% as before).

13 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project Table 1.2. Current status of problem solutions by each sectoral profile over the reporting period

Included through the As of the optimisation As of the end of Sectoral profile beginning of the of problem Resolved the reporting reporting period issues period defined earlier Local budgets and 20 0 1 21 financial foundations of local self- governance Housing and 42 0 1 41 municipal utilities Land relations 11 0 0 11 Organisational 26 0 1 25 aspects and capacity building Social protection 24 2 6 20 Health care 22 0 0 22 Public education 21 0 2 19 Local economic 15 0 0 15 development E-governance and 19 0 0 19 public services

Meetings of AUC Professional Groups

Public Education Professional Group On October 12 - 13, the Project organised a meeting of the AUC Public Education Professional Group.

The meeting agenda included the issues related to key changes in the sectoral legislation, in particular, related to the reform of the New Ukrainian School. The event was attended by heads of departments for education from 15 oblasts and the city of Kyiv. A total of 34 participants were registered. Halyna Ostapenko, Head of the Department for Public Education of the Pervomaisk City Council and the Chairman of the Professional Group, presided at the meeting. A PULSE Project expert spoke about the main changes in legislation and the role of the AUC in these changes. She also presented the status of the implementation of the Public Education sectoral. In particular, 7 tasks for the preparation of the regulatory and legal documents were accomplished, one task was partially accomplished, while the accomplishment of another one was suspended, in connection with the decision of the Committee of the Verkhovna Rada of Ukraine on Science and Education. Roman Yermolychev, Director of the Department of Budget Expenditures of the humanitarian sector of the Ministry of Finance of Ukraine, spoke about the system of state financing of the sector. It was about the size of the educational subvention, the decision of the Ministry of Finance on expenditures for 2018. The participants of the Professional Group meeting came up with a number of questions to the speaker and received exhausting answers. Most of the participants were concerned about the new formula for the distribution of the education subvention, which significantly reduces the amount of the subvention for oblast center cities, since it does not take into account the division of students into classes and other important aspects of funding in the public education sector. Serhiy Dyatlenko, Deputy Director of the Department of Comprehensive Secondary and Pre-School Education of the Ministry of Education and Science of Ukraine, told about the gradual implementation of the Law of Ukraine “On Education” and the main steps of the reform of the New Ukrainian School. The

14 October – December, 2017 Eighth quarter of Project implementation audience also asked the speaker questions about the rules for inclusive education, as well as staffing issues, in particular, the procedures for dismissal of teachers who were previously appointed by the department for education in the context of staffing autonomy. The representative of the Ministry of Education and Science reported on the preparation of an explanatory letter on this issue. The problems voiced by directors of departments for education during the round table included optimisation of schools, setting up service and resource centers, their number, mechanisms for reorganisation of psychological, medical and pedagogical commissions, the need to take into account changes in the number of students as of September 01 each year while allocating the education subvention during the budget year, transfer of vocational schools to the local level, streamlining the functions of departments for education in accordance with the new legislation governing the sector, organisational aspects of specialised training in high school, mechanisms to introduce the financial autonomy of educational establishments, additional opportunities for attracting funds from alternative sources. Raising of funds from parents also remains one of the main problems. Following the two-day work, the event organisers distributed a questionnaire to the participants of the Public Education Professional Group. According to the event participants, the main advantages of the event were: - focus on main amendments in the legislation (5 persons); - exhaustive answers to key questions (3); -high level of professional qualifications of all speakers and vivid communication, positive dialogue atmosphere (5); - a dialogue with representatives of the Ministry of Education and Science and the Ministry of Finance (15); and – constructive approach (2); - agile dynamics; good and useful information (3); - sound knowledge and preparation of AUC experts for the meeting (2); - opportunities for dialogue, sharing professional experience with colleagues, active participation of the participants (5); - preparedness and thoughtfulness of the meeting, the quality of printed PULSE Project products; and, good content of the presentations. The disadvantages included lack of time to discuss all the problem issues, communicate with speakers, and share experience (7), and lack of answers to some issues that had not been discussed due to the lack of time. At the end of the meeting, the participants summed up its results and came up with a decision to organise the next session of the AUC Public Education Professional Group in the city of and its educational establishments (tentatively in April, 2018) and Vinnytsya (October, 2018).

Land Resources Professional Group

On October 19 – 20, the organised a meeting of the AUC Land Resources Professional Group in the city of

More than 30 representatives of local governments (specialists in the sphere of land relations) from different parts of Ukraine including directors of land management departments, their deputies, representative of the National Cadastre Agency A. Ilyenko, Deputy Director of the Department for Land Management, Use and Protection, participated in the meeting. The event brought together representatives of the , Kyiv, Kherson, Dnipropetrovsk, , Mykolaiv, , Volyn, Khmelnytskyi, Odesa, Ivano-Frankivsk, , Lviv, , and Vinnytsya oblasts. A. Ilyenko made a presentation about delegating powers to manage land resources to local governments. A PULSE Project expert spoke about the major changes that took place in the legislative framework putting an emphasis on draft laws in the sphere of land resources, in particular the Draft Law of Ukraine “On Introducing Amendments to Certain Legislation on Land Resources Management within the Territory of Consolidated Territorial Communities” registered under # 7118, which was supported by the Cabinet of Ministers and discussed by the Verkhovna Rada Committee, and an alternative Draft Law Bill # 7118-1. During the session, the participants discussed the main issues of the sector. In addition to this, the agenda of the meeting included the issue of providing ATO participants with land parcels. Taking into account the numerous letters coming from oblast center cities, the participants of the meeting came to a consensus about their proposals to this draft law. Other important issues included empowering of local governments with the authority to manage state-owned lands located beyond the boundaries of populated areas outside the settlements. Based on the discussions, the participants of the meeting of the AUC Land Management Professional Group expressed their support to Draft Law # 4355, since it offers new powers in land management not only to CTCs, but to all local governments and its provisions are easy to understand for local government. In addition to this, it has already been prepared for the second reading.

15 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project During the second day of the meeting, the Professional Group members worked in groups focusing on potential solutions to problem issues local governments face in the sphere of land relations. They also came up with a decision to organise the next meeting of the Professional Group Section in January, 2018 in Lviv.

Consolidated Territorial Communities Professional Group

On October 30 - 31, the Project organised a meeting of the AUC Consolidated Territorial Communities Professional Group in the city of Ivano-Frankivsk

More than 40 persons participated in the meeting including representatives of consolidated territorial communities from 12 oblasts, such as: Zhytomyr, Zakarpattya, Ivano-Frankivsk, Lviv, Poltava, Rivne, , Ternopil, , Khmelnytskyi, Chernivtsi, and Chernihiv participated in the meeting. The event brought together the following presenters: Ivano-Frankivsk City Mayor R. Martsinkiv and Advisor to the Head of the Ivano-Frankivsk Oblast State Administration V. Kretsul. The meeting of the Professional Group was organised in the peer-to-peer experience exchange format. During the meeting with CTC representatives the following topics were discussed: x Experience and peculiarities of the formation of local government bodies in consolidated territorial communities. x Planning the development of a consolidated territorial community. x The necessity of developing city planning documentation, which is serves as the basis for integrated and balanced development of the territory. x Provision of high quality health care services in the consolidated territorial community. x Provision of high quality education services in the consolidated territorial community. x Providing high quality administrative and municipal utility services to inhabitants of the consolidated territorial community (opening of the Center for Administrative Services). x Providing high quality services in the sphere of culture. x Setting up utility companies. x Promoting a favourable investment climate and attracting investments.

On the second day of the event (October 31, 2017), the participants of the Professional Group meeting paid a visit to the Pechenizhynska Consolidated Territorial Community. During the visit, the representatives of the delegation became familiar with the work of the Center for Administrative Services in the Pechenizhynska Community and visited the newly created administrative building of the starosta and the unfinished construction of the gym in the village of Kyidantsi.

Housing and Municipal Utilities Professional Group

On November 30 - December 01, the Project organised a meeting of the AUC Housing and Municipal Utilities Professional Group in the city of

The meeting brought together 27 representatives of local governments from 11 oblasts, such as: Donetsk (1), Dnipropetrovsk (10), Zhytomyr (2), Poltava (4), Kherson (1), Kharkiv (3), Rivne (1), (2), Odesa (1), Chernivtsi (1), and Lviv (1) and 4 representatives of the Dnipropetrovsk AUC Regional Office, companies in the housing and municipal utility sector, and condominiums of the city of Kryvyi Rih. Deputy Mayor of Kryvyi Rih and Chairman of the AUC Housing and Municipal Utilities Professional Group Oleksandr Katrychenko opened the meeting of the Professional Group. He provided a brief overview of the situation in the sector of housing and municipal utilities in general, and focused the attention of the audience on the peculiarities sectors in the city. During the first day of the event the participants: - considered the possibility of implementing municipal programs for local government support to housing owners in apartment blocks, methods of stimulating them for a more careful attitude to jointly- owned property, and incentives for timely payment for housing and municipal utility services; - discussed mechanisms for the implementation of the approved Laws of Ukraine “On Housing and Municipal Utility Services” and “On Commercial Accounting of Heat Energy and Water Supply”; - overviewed Draft Laws “On Introducing Amendments to Certain Laws of Ukraine Regarding the Prohibition to Charge and Impose Seizure on Funds of Business Entities Working in the Spheres of Heat and Water Supply and Sewerage Received from International Organisations for the Implementation of Investment Projects (activities) in Ukraine” and “On Introducing Amendments to the Law of Ukraine “On State Assistance to Business Entities” (regarding compliance with the principles of local self-governance)”,

16 October – December, 2017 Eighth quarter of Project implementation Resolution of the Cabinet of Ministers of Ukraine “On Approving the Procedure for the Utility Service Provider to Transfer Fees to the External Engineering Network Operator for the Installation, Maintenance and Replacement of Commercial Accounting Devices”, and Ministry of Regional Development Directive “On Approving Amendments to the Rules of Operation and Household Waste Treatment Facilities”, which were prepared by the Ministry of Regional Development and sent to the AUC for concurrence; - discussed the unsatisfactory performance of the district heating industry in general and in the city of Kryvyi Rih in particular, the main reasons of which are as follows: imperfect mechanism of tariff setting, inefficient work of the national regulator, significant cash shortages in the payment system, current system of special accounts, constant debt of the state to municipal heating companies for the subsidies and privileges they provide to service consumers, current debt of the state on the difference in tariffs, and monopoly of suppliers of energy resources and their unreasonable penalties; and, - overviewed the map of reforms in the sphere of housing and municipal utilities prepared by the AUC and decided to make certain changes to this map. On the second day of the Professional Group meeting, the participants engaged in a general discussion, during which they discussed key issues of the sector of housing and municipal utilities of local government importance and exchanged practical experience in resolving them. In addition to this, Deputy Kryvyi Rih City Mayor O. Katrychenko briefed the participants of the Professional Group about the work of the city public transportation system including the underground tram, as well as with the diesel generator driven trolleybus designed by the City Trolleybus Municipal Utility Company. The city also demonstrated its municipal machinery and equipment prepared to work in the autumn and winter season. Based on the questionnaire survey, the participants highly evaluated the event that took place. They came up with a decision to schedule the next session of the Professional Group in the spring in the city of Ternopil.

Local Economic Development Professional Group

On December 04 – 05, the Project organised a meeting of the AUC Local Economic Development Professional Group in the city of Ivano-Frankivsk

The event brought together approximately 30 persons: directors and specialists of the directorates and departments for local economic development local councils and experts. The meeting of the Professional Group was conducted in the round table discussion format and focused on the main problems local governments face and potential solutions. The session was opened by Ihor Parasyuk, Director of the PULSE Project. Then, representatives of the Ivano-Frankivsk City Council presented the Ivano-Frankivsk City Development Strategy and the investment attraction tools they use in their work. The event participants also discussed and reviewed the relevant laws and draft laws. Based on the discussions at the meeting of the Professional Group, the participants came up with the following proposals: x Initiate the distribution of the subvention for infrastructure improvements in CTCs in January of each year starting from 2018. x To envisage in the National Budget of Ukraine for 2018 the funds for the implementation of projects for opening of sport fields with artificial cover in the amount necessary for the completion of the implementation of projects selected in 2017, since due to the late allocation of the subvention funds there is a high risk of delays or impossibility to perform the construction works in a timely manner. x Introduce amendments to the Budget Code to expand the grounds for CTCs to switch over to direct inter-budget relations. x Initiate amendments to the legislation governing the payment of the personal income tax at the place where the relevant businesses have been registered. x Initiate amendments to the legislation to channel 50% of fines for violating labour legislation to local budgets with a prescribed use for the development of engineering, transportation and social infrastructure. x Initiate amendments to the legislation governing the inclusion of a part of company profit tax collections to local budgets. x Initiate amendments to the legislation legislative to channel fines for violation of traffic rules and urban beautification rules to local budgets. x Initiate amendments to the legislation to introduce a mechanism for carrying out inspections of self- employed persons.

17 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project x Initiate amendments to the legislation legislative to stimulate legalisation of taxi drivers, for example, vesting local governments with the right to issue licenses to taxi drivers. x Vest local governments with the power to maintain general purpose local roads starting with summer months, rather than starting from January, 2018. x Initiate amendments to the legislation requiring mandatory concurrence from local governments on decisions of setting up public transportation itinerary is case it envisions stop/stops on their territory. x Vest village and town councils of CTCs to open positions of the Chief Architect. x Organise practical training sessions on tender procedures. x Initiate amendments to the legislation to make it possible to make changes, upon request, to the announced tender after it has been automatically closed. x Have the legislation resolve the issue of providing the financial support to municipal companies from the local budget. x Ensure the financing support for the provision of state benefits at the expense of the National Budget. x Have the legislation resolve the issue transferring to local governments industrial facilities that are not used for their intended purpose and are located on communally-owned lands.

Social Protection Professional Group On December 11 - 12, 2017, the Project organised a meeting of the AUC Social Protection Professional Group in the city of Vinnytsya The meeting brought together approximately 40 persons including Deputy Mayor of Vinnytsya, Director- General of the Directorate of the Ministry of Social Policy of Ukraine, managers of the Office of the National Service for Labour of Ukraine in the Vinnytsya oblast and directors of structural departments for social protection of local councils. In the course of the working session, the participants touched upon a number of problem issues in the sector and potential solutions. They discussed the National Budget of Ukraine for 2018 in the part dealing with the financial support of social protection and amendments to the Budget Code of Ukraine. The presenters welcomed the idea of providing a subvention from the National Budget to local budgets for purposes of managing apartment, purchasing (construction) housing for disabled persons for Group III War Disabled Persons from internally-displaced persons and for participants in military operations on the territory of other states (families of victims) who were rendered to Disability Groups I and II. They also discussed the mechanism to use the subventions mentioned above. The Director General of the Directorate for Families and Social Support of the Ministry of Social Policy presented changes in the system of granting privileges and subsidies and the plans of the Ministry to reform this system. The event participants discussed the draft mechanism to monetise public transportation privileges proposed by the Ministry of Social Policy and came to the conclusion that in reality it can not be implemented at the expense of local budgets. The AUC sent an official letter to present this position for consideration in the Ministry of Social Protection. The meeting participants also discussed the issue of offices of the State Treasury implementing the decision to withdraw funds from local governments. Due to the lack of the subvention from the National Budget to local budgets for providing telecommunication services and preferential public transportation in 2016, service providers began appealing to the court for compensation of losses their at the expense of local budgets, which has led to blocking of treasury accounts of the respective councils. Such a decision suspends social payments. Therefore, PULSE Project experts in cooperation with some local governments prepared explanations for local governments how to prevent blocking of accounts of social protection institutions. The event participants together with representatives of the Office of the National Labour Committee in the Vinnytsya oblast discussed the peculiarities of the local government oversight of compliance with the labour legislation. In particular, in the context of approved Law of Ukraine “On the National Budget of Ukraine for 2018” of December 07, 2017 extending the moratorium on inspections, the participants expressed the need to include local governments in the list of entities to be exempt from the moratorium. On the second day of the Professional Group meeting, the participants familiarised themselves with the work of the program to facilitate communication for people with hearing impairment at the Transparent Office Center for Administrative Services and with the activities of the Harmony City Center for Social and Psychological Rehabilitation of Children and Youth with Functional Restrictions.

18 October – December, 2017 Eighth quarter of Project implementation Administrative Services Professional Group

On December 11 – 12, the Project organised a meeting of the AUC Administrative Services Professional Group in the city of Rivne

The meeting brought together 44 representatives of cities, such as , Varash, Vinnytsya, , , , Zhytomyr, Kyiv, , , Kryvyi Rih, , Lutsk, , Odesa, , Radiviliv, Rivne, Sumy, Ternopil, Uzhgorod, Kharkiv, Khmelnytskyi, Cherkasy, and Chernivtsi, as well as National Deputy of Ukraine Oleksandr Dekhtyarchuk, a representative of the Ministry of Economic Development and Trade, representatives of the Rivne AUC Regional Office and Reform Office, Main Directorate of the National Cadastre Agency in the , and the Association of Centers for Administrative Services. All in all, 17 oblasts and the city of Kyiv sent their representatives. Oleksandr Dekhtyarchuk, National Deputy of Ukraine and Chairman of the Sub-Committee on Administrative Services, State Symbols and Awards of the Committee on State Building, Regional Policy and Local Self-Governance, spoke at a meeting about the current status of consideration of draft laws on administrative services by the parliament. The event participants discussed the following key issues. 1. On the development of the system of administrative service provision in Ukraine in 2017. This presentation was made by a representative of the Ministry of Economic Development and Trade. 2. A representative of the Rivne Oblast Office of the State Cadastre Agency made a presentation on key issues of administrative services in the sphere of land relations. 3. Draft Law “On Introducing Amendments to Certain Laws of Ukraine Regarding Bringing the Legislation in Accordance with the Law of Ukraine “On Administrative Services”” prepared by the Ministry of Regional Development. The event participants offered a number of proposals regarding important amendments to procedural issues related to the provision of the corresponding administrative services. Later on, the event organisers summarised these suggestions and sent them over to the authors of the Draft Law. 4. Opening of the Rivne Regional Center for Administrative Services as a successful example of decentralisation. Deputy Rivne City Mayor Vitaliy Herman made the corresponding presentation. The event participants engaged in a lively discussion of the presentations. They initiated the preparation of the draft law and provided proposals to it about how to outline the grounds and improve the procedures for administrative liability for violations in registration of places of residence and in the procedures to provide such services. The meeting participants also became familiar with the hands-on experience of the system of administrative services provision in the cities of Rivne and Dubno, discussed specific issues related to the introduction of new laws on registration of places of residence, issuing passports, and state registration. The event participants paid visits to Centers for Administrative Services in Rivne and Dubno.

1.1.2. Preparation of sectoral legislation

Over the reporting period, PULSE experts prepared 11 draft regulatory and legal documents, including: x 5 draft regulatory and legal documents prepared exclusively by PULSE Project experts including 1, which was registered in the parliament; x 5 draft regulatory and legal documents, with comments and proposals to them submitted in the course of the concurrence of these documents in the manner specified by the Law of Ukraine “On Local Government Associations”, or as expert opinions. In addition to this, PULSE experts introduced comments and suggestions to one draft regulatory and legal document during the work of the working group under a government entity.

During the reporting quarter, the Cabinet of Ministers and Verkhovna Rada of Ukraine approved 4 regulatory and legal documents, which are important for local self-governance. PULSE Project experts participated in the preparation of these documents:

1. Law of Ukraine “On the National Budget of Ukraine for 2018” of December 07, 2017, Registration # 2246-VIII; 2. Law of Ukraine “On Introducing Amendments to the Budget Code of Ukraine” of December 7, 2017, Registration # 2233-VIII; 3. Law of Ukraine “On Housing and Municipal Utility Services” of November 09, 2017, Registration # 2189-VIII; and,

19 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project 4. Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Reforms in the Sphere of Transportation Vehicle Parking” (Registration # 5364 of November 04, 2016, at the moment of the submission of the report, this law was not signed by the President of Ukraine).

Also, PULSE Project experts worked to prepare for the first reading the Draft Law “On Introducing Amendments to the Law of Ukraine “On Voluntary Consolidation of Territorial Communities” Regarding the Voluntary Merger of Territorial Communities of Villages and Towns to Territorial Communities of Oblast Significance Cities” (Registration # 6466 of May 18, 2017).

Table 1.3. Distribution of draft regulatory and legal documents by sector

Number of draft Number of draft documents documents Sector prepared in the prepared since reporting the beginning of quarter the Project Local finance 6 64 Housing and municipal utilities 14 Land and communally-owned property 6 Organisational aspects of local government activities and capacity 3 31 building for their officials Social protection 21 Health care 5 Public education 1 15 Administrative services and e-governance 1 Sustainable economic development and urban development 1 12 TOTAL 11 169

Table 1.4. List of prepared draft regulatory and legal documents

Registration Subject matter of the proposed amendments number The Draft Law of Ukraine “On Introducing Amendments to the Law of Ukraine “On the National Budget of Ukraine for 2017”. The purpose of the draft law is to repay the debts Not registered on mid-term loans of local budgets at the expense of a subvention from the National Budget, which will provide the opportunity to improve credit ratings of local budgets, resolve the problem issue with the debt, which has remained unresolved since 2009. Amendments and proposals to the Draft Law of Ukraine “On the National Budget of Ukraine for 2018”. The draft law envisages a mechanism for writing off debts on mid- term loans from local budgets at the expense of the outstanding balance of the National Not registered Budget as of January 01, 2018. In case of its approval, the credit ratings of local budgets will improve and the debt problem will be resolve, which remains unresolved since 2009. This is an alternative draft law to the one mentioned above. Draft Law of Ukraine “On Introducing Amendments to the Budget Code of Ukraine Regarding the Legislative Regulation for Repayment of the Debt on Intermediate Term Loans”. The draft document envisions supplementing the Closing and Transitional Not registered Provisions of the Budget Code with a provision on writing off debts on mid-term loans of local budgets on an annual basis in the amount of 1/15 of the total amount of the debt until the complete cancellation of such debts. Draft Law “On Introducing Amendments to Certain Laws of Ukraine on Charters of Territorial Communities. The purpose of the Draft Law is to more clearly define the Registration # subject matter of the territorial community charter, with the prime focus on the 7297 of regulation of participation of members of territorial communities in exercising local self- November 16, governance, the interactions between local governments and their officials with civil 2017 society institutions, and the status of citizen self-organisation entities. The draft law was submitted to the Ministry of Regional Development and was registered in the parliament

20 October – December, 2017 Eighth quarter of Project implementation

upon the Cabinet of Ministers submission. Draft Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Improvements of the Legal Regulation of the Status of Members of Local Councils”. The purpose of the Draft Law is to improve the legal regulation of the status Not registered of local council members provided they have been elected according to the proportional elections system, as well as the procedures for recalling council members upon the citizen initiative.

Draft regulatory and legal documents, which were amended during their discussion in the manner prescribed by the Law of Ukraine “On Local Government Associations”, or in the process of submitting expert opinions:

x to the Draft Law “On Introducing Amendments to the Law of Ukraine “On Voluntary Consolidation of Territorial Communities” Regarding Voluntary Mergers of Territorial Communities of Villages and Towns to Territorial Communities of Oblast Significance Cities” (Registration # 6466 of May 18, 2017). The Draft Law was developed with the participation of PULSE Project experts. In the course of the elaboration of the draft document for the second reading, PULSE Project experts suggested the amendments that take into account the position of individual National Deputies in terms of simplifying the process of consolidation of territorial communities around oblast significance cities (with a view of removing certain controversial points that arose during the consideration in the second reading); x to the Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding Reforms in the Sphere of Transportation Vehicle Parking” (Registration # 5364 of November 04, 2016, at the time of the submission of the report was approved by the parliament, but was signed by the President of Ukraine). During the elaboration of the draft law for the second reading, PULSE Project experts came up with a suggestion to extend the scope of powers of local councils of local governments at different levels to select parking inspectors who would be authorised to consider cases of administrative violation of parking rules; x to the Draft Law “On Introducing Amendments to the Budget Code of Ukraine” (Registration # 7116 of September 15, 2017). (The draft law was approved on December 07, 2017). During the elaboration of the draft document for the second reading, PULSE Project experts suggested the amendments to ensure the sustainable development of local budgets, take into account the position of local governments, increase the right of local governments to dispose of their own funds, and improve the revenue flow to local budgets. x to the Draft Law “On the National Budget of Ukraine for 2018” (Registration # 7000, of September 15, 2017). In the course of the elaboration of the draft document of the second reading, PULSE Project experts came up with proposals that take into account the local government interests, prevent misbalance of local budgets, and increase their financial sufficiency; x to the draft, the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine Regarding Ensuring the Balance of Budget Revenues in 2018” (Registration # 6776-d). PULSE Project experts proposed amendments not to apply the legislative requirements to local government ordinances on setting local taxes and fees that were approved pursuant to the mentioned Law.

PULSE experts suggested the following comments and edits to draft legislation in the course of the preparation of draft legislation in various government entities: A PULSE Project expert suggested comments to the Draft Law “On Comprehensive Secondary Education” (prepared by the Ministry of Education of Ukraine) about the rights of the founder (local government) of an educational establishment to allocate funds within the network of educational institutions, as well as to determine the limits of financial autonomy of comprehensive educational establishments.

1.1.3. Legislation monitoring

During the reporting period, the AUC received 57 draft regulatory and legal documents sent by central agencies of the state executive for concurrence including: x National Service of Ukraine for Geodesy, Cartography and Cadastre - 1; x Ministry of Internal Affairs - 1;

21 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project x Ministry of Infrastructure - 2; x Ministry of Family, Youth Policy, Sports and Tourism - 2; x Ministry of Regional Development, Construction, Housing and Municipal Utilities - 36; x Ministry of Labour and Social Policy - 8; x Ministry of Finance - 1; x Ministry of Education and Science - 5; and, x National Emergency Service - 1.

31 of these draft regulatory and legal documents were concurred with without reservations, 18 were concurred with reservations, and 8 – not concurred with.

PULSE experts prepared and submitted 35 expert opinions to the draft legislation under consideration in Verkhovna Rada of Ukraine Committees and central agencies of the state executive including: x negative opinions with the proposal to either reject or return for further elaboration – 10; x positive opinions - 8; and, x expert opinion with comments and proposals – 17.

The expert opinions were submitted to: x VRU Budget Committee - 1; x VRU Committee on Veterans, Participants in of Military Activities, Anti-Terrorist Operation and Persons with Disabilities - 1; x VRU Committee on Economic Policy - 1; x VRU Committee on Construction, Urban Development, Housing and Municipal Utilities - 2; x VRU Committee on Agrarian Policy and Land Relations - 5; x VRU Committee on State Building, Regional Policy and Local Self-Governance - 11; x VRU Committee on Science and Public Education - 7; x VRU Committee on Tax and Customs Policy - 4; x VRU Committee on Family, Youth Policy, Sports and Tourism - 1; and, x Cabinet of Ministers of Ukraine - 2

1.1.4. Resolving local government problem issues and promotion of sectoral reforms

Specifying the procedure for annexation of territorial communities to ARC republican and oblast significance cities The experience of the implementation of the Law of Ukraine “On Voluntary Consolidation of Territorial Communities” has demonstrated that the mechanism of consolidation with territorial communities of oblast significance cities is too complicated, therefore such consolidation did not take place. To resolve this problem, the PULSE Project experts prepared a draft law “On Voluntary Consolidation of Territorial Communities” Regarding the Voluntary Merger of Territorial Communities of Villages and Towns with Territorial Communities of Cities of the Autonomous Republic of Republican and Oblast Significance” (Registration # 6466 of May 18, 2017), which will unblock the process of consolidation of territorial communities of the cities of Autonomous republican significance and oblast significance cities according to the simplified procedure without holding new elections. The draft law mentioned above was approved on November 16, 2017 in the first reading, and on December 07, 2017 it was submitted for the repeated second reading to remove the contradictions that were voiced during its consideration in the session hall. PULSE Project experts participated in the elaboration of the draft law for the second reading. At present, the draft law is under consideration in the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance.

Defending the position on the “local” excise tax In the course of preparing the draft Law of Ukraine “On the National Budget of Ukraine for 2018” and the corresponding amendments to the Budget Code, during the budget consultations at the Ministry of Finance of Ukraine, working groups of the Verkhovna Rada Budget Committee and during meetings of the said Committee, PULSE Project experts saw a threat of having some revenues excluded from local budgets:

22 October – December, 2017 Eighth quarter of Project implementation

x provision to include 13.44% of the excise tax on the production and import of petroleum products; x 15% of rent fee for special use of forest resources; x 15% of rent fee for special use of water resources. These revenues constitute approximately 8 billion UAH. Project experts advocated for need to prevent such losses of local budgets. Thanks to the position expressed by PULSE Project experts, the VRU Budget Committee kept the current norms for the inclusion of collections from the excise and from fees for special use of forest resources into local budgets. At the same time, local budget revenues from the rent payment for the special use of water resources was reduced by 5%. These funds will be channelled to finance the National Water Resource Development Fund to be later on redistributed between local budgets.

Improvement and decentralisation of administrative services On October 10, 2017 the parliament approved the Law of Ukraine ”On Electronic Trust Services”. The law streamlined the relationships in the sphere of electronic trust services (creation, verification and confirmation of the advanced electronic signature or seal, certificate of electronic signature or seal, web site authentication, formation, verification and confirmation of the electronic time stamp, etc.), as well as electronic identification. The law represents a major step forward for the introduction of e-governance and e- economy. The Government expanded the list of administrative services provided in Centers for Administrative Services. Thus, as of October 11, 2017, citizens will have the opportunity to receive the following services: x issuing a driver's license; x state registration of vehicles; x registration of civil status acts; x obtaining a permit to employ foreigners; and, x social services.

On December 06, 2017, the Cabinet of Ministers changed the procedure for state registration, de-registration of cars, buses, and other vehicles. The corresponding resolution outlines the following legal grounds for service centers of the Ministry of Internal Affairs to provide services on the state registration through Centers for Administrative Services. The resolution also envisions the right of the administrators of CASs to connect to MIA databases. PULSE Project experts participated in the preparation of such decisions and supported them.

Preventing the repayment of debts on mid-term loans at the expense of local budgets During the reporting quarter, the Ministry of Finance made two attempts to give to the Cabinet of Ministers Committee on Economic, Financial and Legal Policy, Development of the Fuel and Energy Complex, Infrastructure, and Defence and Law Enforcement Activities a draft CMU resolution “On Approving the Mechanism for the Repayment of the Debt on Mid-Term and Interest -Free Loans Provided to Local Budgets At the Expense of the Unified Treasury Account”, which envisions mandatory writing off the debts accumulated on mid-term loans at the expense of its own resources of local budgets. By doing so, the Ministry of Finance tried to increase collections to the unified treasury account at the expense of local budgets, thus reducing the resource of local budgets by 9 billion UAH. A PULSE Project expert prepared informational and analytical materials saying that this decision was not properly prepared, was made hastily and lacked detailed calculations supporting it. The expert provided a number of counterarguments and emphasized that during working meetings with the Ministry of Finance of Ukraine the agreement was reached to repay the debt at the expense of the National Budget of Ukraine. In order to eliminate this threat, three alternative proposals were sent to the Ministry of Finance to resolve this issue without exercising too much pressure on local governments, highlighted the main risks of the original resolution. Representatives of local governments and National Deputies of Ukraine also participated in this discussion. As a result of the discussions and consequent actions, the Cabinet of Ministers never considered the draft resolution and was not submitted to the Cabinet of Ministers for the discussion.

23 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Preventing changes to the existing mechanism of horizontal equalisation of local budgets During the reporting quarter, the Ministry of Finance actively pushed the idea of changing the system of equalisation of local budgets by increasing fund withdrawals to the National Budget. Such provisions were already envisioned at the stage of the preparation of the draft Main Directions of the Budgetary Policy for 2018 - 2020 which were effectively blocked by the Association of Ukrainian Cities in the parliament. In the course of the preparation of the draft National Budget for 2018, the Cabinet of Ministers proposed the reverse subsidy rates, which were based on the changed equalisation system, which would have led to a significant reduction of the revenue part of local budgets. At the same time, the relevant provisions were included in the draft amendments to the Budget Code of Ukraine. PULSE Project experts actively defended the position regarding the inappropriateness of introducing the equalisation system proposed by the Ministry of Finance. This issue was raised during budget consultations and was mentioned in the signed minutes of the meeting dedicated to budget consultations. In addition to this, the Association advocated for retaining the current equalisation mechanism both at the meetings of the working group and at the meetings of the Budget Committee of the Verkhovna Rada of Ukraine. The PULSE Project expert prepared a thorough analytical note about the proposal suggested by the Ministry of Finance, highlighted the negative effects of such changes, demonstrated indicators of budgets at different levels and the burden on elected cities, and a number of arguments about the negative effects of the proposed system and benefits of the existing one. Due to the active work and cooperation of PULSE Project experts with the Ministry of Finance, Secretariat of the Cabinet of Ministers of Ukraine, involvement of individual National Deputies, and intense discussions of this issue at the meeting of the Verkhovna Rada Budget Committee, the Association finally managed to preserve the existing system of horizontal equalisation.

Supporting decision-making autonomy of local governments in providing financial assistance to economic entities The Law of Ukraine “On State Assistance to Business Entities”, which came into force on August 02, 2017, contains a number of unspecified and contradictory provisions, which make it possible to effectively block any financial assistance to economic entities (including utility companies) in fulfilling their statutory tasks to sustain basic functions of communities. A PULSE Project expert prepared a suggestion to suspend the law and make the necessary changes to ensure independence in the management of own funds to local self-government and sent it to the Prime Minister of Ukraine, Chairman of the Verkhovna Rada of Ukraine and the Anti-Monopoly Committee of Ukraine. The position was justified by the potential threats and risks of making spending from local budgets, the inconsistency of established restrictions with democratic principles, enshrined, in particular, in the European Charter of Local Self-Government. As a result of the discussions and persistent lobbying from the AUC, the Anti-Monopoly Committee of Ukraine agreed promised it would provide its concurrence to local governments without delay. The PULSE Project expert also came up with a suggestion to the Anti-Monopoly Committee and the Ministry of Economy with a request to accelerate the preparation of a draft resolution of the Cabinet of Ministers of Ukraine to approve the list of services of general economic interest and to include the services provided my municipal utility companies in this list. In addition to this, during meetings of VRU line Committees, the PULSE Project supported the idea of approving the Draft Law under Registration # 7073, which resolves the current problem existing issue for local governments through lifting the restrictions.

Safeguarding local government interests in the course of approval of the Law of Ukraine “On the National Budget of Ukraine for 2018”

24 October – December, 2017 Eighth quarter of Project implementation Being actively involved in the process of preparing the key approaches to the formation and implementation of local budgets in 2018, the PULSE Project faced a number of challenges and threats that have been overcome through close cooperation with the Cabinet of Ministers, parliament and all stakeholders. Thus, in particular, the first draft version of the National Budget for 2018 prepared by the Ministry of Finance for consideration by the Cabinet of Ministers of Ukraine envisioned transferring to local governments significant expenditures without compensatory resources, did not envision the increase of the revenue part of local budgets, changed the system of horizontal equalisation through a significant increase in withdrawals, envisioned the repayment of significant amount of debts at the expense of local budgets, and provided for the volume of health care and education subventions, which would not have been able to meet even the minimum demand. If taken, such steps would have actually minimised all previous achievements of fiscal decentralisation. So, the AUC focused its work on preventing this. Thus, the AUC managed, in particular, to ensure: - increase in the volume of health care subvention (+ 4.5 billion UAH) and education subvention (+ 8.8 billion UAH); - extension of the force of the provision to channel collections from the excise tax on the production and import of petroleum products to local government budgets (13.44%); - extension of the force of Paragraph 20 of Section VI of “Closing and Transitional Provisions” of the Budget Code of Ukraine regarding the financial support for pre-school and cultural facilities through transfers from rayon budgets; - an additional subsidy from the National Budget to compensate for the losses of local budget revenues arising as a result of the state granting tax preferences on land tax payment to the entities engaged in space activities (273 million UAH); - envision a stabilisation subvention in the amount of 1.7 billion hryvnyas; - provide a subvention for the development of infrastructure in CTCs in the amount of 1.9 billion UAH; - envision the National Regional Development Fund (NRDF) in the amount of 8.1 billion UAH; - add a new revenues source: lottery license fee; - retain the right of local governments to direct the remaining balance of the education subvention to the renovation of the material and technical base of educational institutions, which was originally planned to be excluded from the provisions of the Budget Code. The draft law submitted by the Ministry of Finance was elaborated by the Cabinet of Ministers of Ukraine, where it was possible for the Association to defend part of its positions prior to the submission of the document to parliament. Unfortunately, the Cabinet of Ministers of Ukraine did not take into account all proposals the PULSE Project insisted on during the preparation of the draft law. For instance, the following issues remained unresolved: - local budgets do not have to finance state guaranteed privileges to the population on payments for housing and municipal utility services and to cover the debts on such payments over the previous year; - the planned amount of the subvention to the public education and health care sectors was not sufficient for institutions in these sectors to provide high quality services to citizens; - the mechanism for horizontal budget equalisation suggested by the Cabinet of Ministers was not perfect; - local budgets should not repay the debt on mid-term loans arising from improper calculations of indicators by the Ministry of Finance.

Therefore, PULSE Project experts attended meeting at the Cabinet of Ministers to lobby for the needed changes to the formation of local budgets in the next year. Also, aiming at introducing the necessary proposals to the Laws of Ukraine “On Introducing Amendments to the Budget Code of Ukraine (Registration # 7116) and “On the National Budget of Ukraine for 2018” (Registration # 7000), the PULSE Project appealed to National Deputies who are members of the “Local Government Support” Inter-Faction Group.

25 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The Group members also advocated for the corresponding position during meetings at the Cabinet of Ministers and in working groups, and in their presentations actively raised concerns about potential threats of transferring additional expenditures categories to local budgets. In order to receive support from the Cabinet of Ministers, the Project organised 4 meetings with the Prime Minister of Ukraine whose participants discussed the details of all local budget issues, reached compromise solutions, involved the relevant central executive authorities, prepared materials and options of solutions to problems. Taking into account the above, the PULSE Project had to develop the mechanisms to balance the National Budget for each position and get clearance on them from all line ministries, involving not only the leadership of these ministries, but also line Vice Prime Ministers of Ukraine. Such clearances were obtained during working meetings and coordination meetings initiated by the PULSE Project. The Project ensured the submission by 35 National Deputies of Ukraine from all factions and groups, as well as by a number of line committees of the Verkhovna Rada, in particular the VRU Committee on Committee on State Building, Regional Policy and Local Self-Governance, the VRU Committee on Construction, Urban Development, Housing and Municipal Utilities the prepared proposals and amendments to the draft State Budget of Ukraine for 2018 for consideration by the Verkhovna Rada of Ukraine Budget Committee. All the proposals were also discussed in detail at 3 meetings of the AUC Local Finance Professional Group, which were conducted with the participation of directors of the finance departments of the local councils. Following the steps taken by the PULSE Project, the Law of Ukraine on he National Budget:

Prevented: x transferring to the local budgets of benefits to the population for the payment of housing and communal services (UAH 7 billion) and repayment of arrears on such services that arose in previous budget periods (UAH 2.5 billion). In addition, UAH 17.9 billion of social subsidies were further increased to maintain the 2017 mechanism for financing expenditures for granting privileges, housing subsidies to the population and providing state social assistance. This will allow local budgets next year to not divert a significant part of their own resources, which otherwise could may be spent on developing their own infrastructure. The principle of subsidiarity has been preserved, and the financing of benefits for housing and communal services is shifted to the National Budget; x transferring the maintenance of higher educational institutions of Accreditation Level I - II (technical schools, colleges, schools) (6 billion UAH) to the level of oblast significance cities. The financial support will be provided from oblast budgets and the budget of the city of Kyiv. In addition, 371 colleges, which are structural subdivisions of universities and institutes, will continue to be supported by the National Budget. The Association of Ukrainian cities managed to persuade the Cabinet of Ministers about the negative experience and consequences of transferring the financial support to educational institutions to the local level; x removing of 10% of environmental tax from village, town and city budgets and budgets of consolidated territorial communities.

Ensured: 9 transferring of 299 united territorial communities where elections were held in 2017 to direct inter- budget relations. This will enable communities to receive the necessary resources, develop their infrastructure and use the opportunities of their enhanced financial autonomy; 9 resolving the issue of local budget debt on mid-term loans local budgets received in 2009 - 2014 (total amount of 9 billion UAH in 332 local budgets) by writing it off. For several years, this issue was delayed and, correspondingly, worsened the credit ratings of local budgets preventing communities to get cheap loan funds. At the same time, several attempts were made by the Cabinet of Ministers of Ukraine to approve a resolution to repay such debt at the expense of local budgets, which would significantly misbalanced local budgets; 9 compliance with Article 142 of the Constitution and provision of compensatory resource to communities in the form of an additional subsidy to cover local budget losses associated with the

26 October – December, 2017 Eighth quarter of Project implementation provision of state guaranteed tax privileges on land tax payment to entities working in the space and aircraft industry in the amount of 273 million UAH; 9 inclusion of all local budgets into the system of redistribution of additional subsidy for maintenance of educational and health care facilities (16.5 billion UAH). Initially, such a subsidy was supposed to go to oblast budgets to be further redistributed exclusively between rayon budgets for their needs. This move will provide opportunities to channel significant recourses to cities and CTCs for maintenance of educational and health care facilities; 9 an educational subvention in the amount of 62.2 billion USD, which includes funds for financing vocational schools. Also, the right to direct unused funds of the education subvention for updating the material and technical base of educational institutions; 9 a health care subvention in the amount of 57.4 billion UAH. This subvention was increased by 5.9 billion UAH before the second reading of the draft law on the National Budget, of which 5.2. UAH billion will be spent by July 01, 2018 according to the old mechanism of primary health care; 9 collection of a significant resource to local budgets for the development of the road infrastructure; 9 retaining for 2018 and 2019 the provision to include in local government budgets 13.44% of the excise tax on fuel (from 7 to 9 billion USD annually); 9 channelling 35% of the funds of the National Road Fund for roads of national importance in local communities and communal roads (11.4 billion UAH). At the same time, at least 20% of these funds will go to streets and roads in populated areas; and, 9 prolongation for 2018 of the customs experiment to provide financial support for the implementation of road development and repairs projects (recipients - local budgets).

Safeguarded: 9 the current mechanism for horizontal equalisation of sufficiency of local budgets, which will enable communities to develop and balance their revenues. Consequently, cities will not lose their motivation to increase their revenues, strengthen their financial potential, attract investors, and develop the entrepreneurial sector; 9 the total of 3.3 billion UAH will stay in communities: this is the amount of reduction in withdrawals of funds from local budgets in favour of the National Budget. At the same time, for the first time, internally displaced persons (1.5 million people) were factored in the calculation of indicators of the basic subvention and the reverse subvention; 9 additional increase of social subventions by 17.9 billion UAH for preserving the mechanism of financing expenditures for the provision of privileges, housing subsidies to the population in 2017 and for the provision of state social assistance; 9 the National Regional Development Fund was set at the amount of 6 billion UAH. This will allow not only to attract funds to communities, but also to direct them to promising projects with detailed justification for selecting the best ones in order to achieve national goals and strategic objectives; 9 a subvention from the National Budget to local budgets to pay the difference in tariffs in the amount of 1 billion UAH. This subvention will reduce the payables of municipal heating and water supply companies. It should be noted that debt for energy payments has a negative affect on the financial condition of municipal utility companies and may lead to fines and penalties. The Association of Ukrainian Cities insisted on the allocation of 5 billion UAH to resolve this problem; 9 the national Potable Water of Ukraine targeted program (200 million UAH), as well as the 100 million UAH increase of the financial support from the National Budget to the Youth Housing Assistance Program (to provide co-financing for local housing programs). These programs will provide opportunities to satisfy the needs of consumers in high quality water at affordable, economically justified prices, ensure sustainable and balanced development of centralised and decentralised drinking water supply systems, as well as ensure the implementation of a high quality national housing policy; 9 a subvention in the amount of 1.9 billion UAH for infrastructure improvements in all 665 CTCs. Such support for newly established communities is somewhat smaller than that the one originally required by the AUC, but at the same time, it will promote the conditions for increasing the competitiveness of CTCs stimulate their sustainable economic growth, modernise their infrastructure and assist in implementation of investment projects.

For the first time:

27 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project ƒ takes into consideration internally displaced persons (1.5 million people) in the course of the calculation of the indicators of basic and reverse subventions; ƒ switches over to direct inter-budget relations 299 united territorial communities where in 2017 initial local elections has taken place and will be conducted; ƒ regulates the issue related to applying regulatory requirements to decisions on setting local taxes and fees approved in pursuance of the Law “On Introducing Amendments to the Tax Code of Ukraine” by local governments and consolidated territorial communities. Consequently, such requirements will not be applied to decisions of local governments in 2018; ƒ envisions a new source of income for all local government budgets, namely: a fee for issuing a license for conducting commercial activities in issuing and organising lotteries. Such a resource was envisioned exclusively for the budget of the city of Kyiv in the draft document submitted for the first reading of the Law “On the National Budget for 2018”. The Association of Ukrainian Cities requested to give a possibility to have such source of revenues for all local governments at the community level to properly implement and balance their budgets, as well as to provide a systemic mechanism for compensating for losses of local budgets.

Resolving the issue of central state executive authorities approving regulations vesting local governments with the powers to exercise oversight of compliance with the labour legislation Thanks to the work of PULSE Project experts, on April 26, 2017, the Cabinet of Ministers issued Resolution # 295 to introduce the Procedure for exercising state oversight of compliance with the labour legislation. In pursuance of the CMU Resolution, central executive authorities were supposed to develop a number of regulations. Back in August of 2017, the Ministry of Social Policy approved the format of the documents that are to be prepared for the state oversight and control of compliance with the labour legislation. At the same time, the regulatory document mentioned above did not pass the state registration with the Ministry of Justice of Ukraine, with the reason for this being disagreement with the State Regulatory Service. Thanks to the lobbying work of PULSE Project experts, the document of the Ministry of Social Policy mentioned above was reviewed by the State Regulatory Service, was registered with the Ministry of Justice of Ukraine on December 12, 2017, and entered into force on December 29, 2017. This will enable local labour inspectors to perform as of January 01, 2018 unscheduled activities to monitor compliance with the labour legislation. The unscheduled activities, in particular, include: monitoring appeals of employees concerning violations of this legislation, in the event of an accident, death, upon court decision, or upon the appeal of the employer. At the end of the reporting period, 221 local government officials from 23 oblasts received their certificates of labour inspectors.

Education reform In the reporting quarter, a PULSE Project expert provided local governments with the consulting support for the implementation of certain provisions of the new Law of Ukraine “On Education”, which entered into force in the previous reporting period, in particular, by providing 72 written consultations and more than 50 oral explanations. Primarily, these consultations dealt with the procedures for the appointment of heads of educational institutions, financial activities in the sphere of public education, ensuring autonomy of educational institutions and ensuring access of applicants to it, registration of children and school-age children and the formation of separate education management departments in CTCs. In order to bring the regulatory framework in line with the propositions of the Law of Ukraine “On Education”, the PULSE expert participated in the working groups set up by the Ministry of Education and Science of Ukraine, which should prepare a new version of special laws. Thus, according to Directive of the Ministry of Education and Science of Ukraine # 1470 of November 13, 2017, the Ministry set up a working group to prepare a new draft Law of Ukraine “On Comprehensive Secondary Education”, which included the PULSE Project expert. During the reporting period, PULSE experts developed a section on the draft law “Financial and Economic Relations in the Sphere of Comprehensive Secondary Education”, as well as clarified the concept of the autonomy of the comprehensive secondary education establishment. Currently, the working group continues to work on the draft law.

28 October – December, 2017 Eighth quarter of Project implementation The reporting period saw significant changes in the financing of the education sector. For example, on December 27, 2017, the Cabinet of Ministers of Ukraine at its meeting approved the Resolution “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”. The formula takes into account the contingent of pupils, the availability of children with special educational needs, the projected rates of teachers' wages and takes into account adjusting the coefficients. According to it, the amount of educational subvention for local budgets was calculated. The formula was developed by a working group created under the Ministry of Education and Science of Ukraine, which included PULSE experts. During the reporting period, the Cabinet of Ministers focused considerable attention to the problem of long waiting lines to pre-school establishments, which prevents all children to get access to high quality educational. It is particularly important for cities where there is an increase in population. In order to solve this problem, on December 06, 2017, the Cabinet of Ministers of Ukraine approved Resolution # 871-p “On Approving the Action Plan for 2017-2019 for the Step-by-Step Opening of Additional Slots in Educational Establishments for School Age Children”. The document introduces an action plan for the period of 2017 - 2019 for a step-by-step opening of additional slots in educational institutions for pre-school age children, as well as projected quantitative indicators for opening of additional slots in educational institutions in 2017 - 2019 for pre-school age children. The Cabinet of Ministers is planning to open 96,147 slots in pre-school educational institutions by 2020 by opening of new communally-owned educational institutions, reorganisation of educational institutions through opening of pre-school establishments, opening of private educational institutions, reconstruction of pre-school establishments, and resuming the activities of those institutions that were not used for a long. In the course of the preparation of the action plan, the Cabinet of Ministers of Ukraine took into account the proposals of the AUC, which were prepared and submitted by the PULSE Project expert. During the 4th quarter of 2017, the AUC continued to safeguard the right of oblast center cities to manage vocational education institutions, as the Ministry of Education and Science of Ukraine continues to slow down the transfer of vocational education institutions from the state property to communal property of oblast center cities. Thus, on October 25, 2017, the Cabinet of Ministers approved Directive # 831-p “On Issues of Management of State-Owned Vocational Training Institutions Subordinate to the Ministry of Education and Science of Ukraine”. In accordance with this document, oblast state administrations and Kyiv City State Administration received the right to manage state-owned vocational schools subordinate to the Ministry of Education and Science. The transfer of these institutions will be performed at the expense of local budgets. At the same time, oblast center cities, which provide the financial support to vocational training institutions, will have the powers only to appoint, motivate and bring disciplinary responsibility to managers of vocational schools. In addition, the Cabinet of Ministers is about to consider a draft directive “On the Transfer of Integrated Property Complexes of State-Owned Vocational Training Facilities of State-Owned Vocational Training Institutions to the Joint Ownership of the Territorial Communities of the Zhytomyr and Ivano-Frankivsk Oblasts”. The AUC appealed to the Cabinet of Ministers to take into account the fact that of those vocational schools that are being prepared for the transfer, 4 vocational schools are financed from the budget of Ivano-Frankivsk. With this in mind, the AUC came up with a suggestion to transfer these institutions to the communally-owned property of the city community, rather than the oblast. The Association of Ukrainian Cities received an excerpt from Minutes # 44 of the meeting of the Cabinet of Ministers Committee dated November 30, 2017 saying that the Cabinet of Ministers of Ukraine approved the draft directive prepared by PULSE Project experts.

Approval of the Law of Ukraine “On Housing and Municipal Utility Services”

Taking into account the fact that improvements in the sphere of housing and municipal utility services required systemic changes, including demonopolisation and deregulation of potentially competitive markets in the context of free choice of apartment block co-owners of managerial service providers, the Cabinet of Ministers of Ukraine prepared and registered the draft Law “On Housing and Municipal Utility Services” (Registration # 1581) back on December 22, 2014. Since this draft law had many drawbacks, on November 11, 2015, the parliament of Ukraine sent it for the repeated first reading. On December 10, 2015, a group of National Deputies of Ukraine registered a draft law “On Housing and Municipal Utility Services” (Registration # 1581-d), which took into account the need to deepen the process of demonopolisation of housing and communal services and to promote competitive environment in the

29 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project services market, technical re-equipment of housing and communal services, reduced use of energy and material resources, and increase efficiency of enterprises in the sector. To ensure effective and comprehensive inclusion of positions of all stakeholders, the Verkhovna Rada Committee on Committee on Construction, Urban development, Housing and Municipal Utilities set up a working group to elaborate the registered draft law, which included PULSE Project experts. The work on the draft law lasted more than a year and a half. During this time, the working group conducted approximately 20 working meetings at the parliamentary committee. Some issues were discussed by the governing bodies of the AUC. For example, one of the issues suggested by PULSE Project experts was discussing at the AUC All-Hands Meeting the issue of transferring to local governments the powers to set tariffs for solid waste management. As a result of this decision, the Project experts were able to include in the text of the draft law the provisions about the powers of local governments to set tariffs in this sphere. In addition, PULSE Project experts discussed the draft law with local government representatives during meetings of AUC Professional Groups and expert workshops. The draft law prepared for submission to the parliament was, to some extent, a compromise decision and did not satisfy all players in the sector of housing and municipal utilities. This is why it took such a long time to approve it. For example, during the preparation of the draft law for the second reading, National Deputies of Ukraine submitted more than 500 comments and the draft law was included in the Verkhovna Rada of Ukraine agenda more than 10 times. On November 09, 2017, the Verkhovna Rada of Ukraine approved the Law of Ukraine “On Housing and Municipal Utility Services” by 262 votes, and already on December 05, 2017, the President of Ukraine signed it into law. The new provisions of the law worth mentioning include: x distinction between housing and municipal utility services; x better regulation of rights and responsibility of parties under the service agreement; x the mechanism for commercial accounting of provided services regulated; x resolving the issue of the provision of building management services and payment for them; x subscriber services for the networks and the corresponding payments; x provides the possibility to choose different models of contractual relations between the consumer and the provider of services; x defines clear terms for monetisation of benefits and subsidies for housing and municipal utility services; x vests local governments with the powers to set tariffs for solid waste management services; and, x introduces penalties for the failure to timely pay for provided housing and municipal utility services of the proper quality and in the expected scope.

Thus, the approved law should become the foundation for systemic reforms in the sector of housing and municipal utilities and an additional incentive for the development of market relationships. Thank to the approval of this Law, consumers should be provided with better services, service providers will be forced to work more efficiently, while local councils will be able to reduce the amount of their budget spending to support municipal utility companies. The positive political step aimed at ensuring the payment discipline of service users the Parliament of Ukraine resorted to was the introduction of financial responsibility for the late payment of services received. Although such a penalty constitutes only 0.01% of the amount of the debt and is mostly a psychological factor, it will, to a certain extent, stimulate consumers to make timely payments and is expected to reduce the debt for consumed services. It should, however, be noted that it is necessary to approve more than 30 by-laws for the proper implementation of the Law. For this purpose, a working group for the preparation of these documents was set up and PULSE Project experts were involved in it.

Improvement of the mechanisms to manage and effectively use land plots On November 22, 2017, the Cabinet of Ministers of Ukraine approved Resolution # 890 “On Introducing Amendments to Certain Resolutions of the Cabinet of Ministers of Ukraine”, which amended the Model Land Lease Agreement and improved managements mechanism in the sphere of using and protecting lands and conservation and restoration of soil fertility. The document mentioned above, which was reviewed and

30 October – December, 2017 Eighth quarter of Project implementation supported by PULSE Project experts, improves the existing mechanism of protecting the interests of land owners by: x - stipulating in the land lease agreement for state-owned and communally-owned lands indicators of qualitative characteristics of the soil surface of the land plot at the time when the land lease starts; x - compensation to the lessor, i.e. to the owner of the land plot, for the deterioration of the quality of the soil surface of the leased land or if becomes unusable for the designated purpose; and, x - setting the timeframe for the rent payment for the use of the land plot and increasing liability in case of its late payment (fines, penalties).

Thus, local governments, while leasing their land, will be able to control the condition of the soil surface, and in case of deterioration will be able receive compensation.

Also, on December 06, 2017, the Cabinet of Ministers approved Resolution # 925 “On Introducing Amendments to Certain Acts of the Cabinet of Ministers of Ukraine on Improvement of the Mechanisms for Protecting Real Property Rights for Land Plots”, which creates new mechanisms and improves the existing ones for combating “land seizure” including in the agrarian sector of the economy and for protecting property rights and interests of landowners and land users, as well as streamlines the data of the State Land Cadastre and improves the legislation in the sphere of land relations and state registration of real property rights. For example, the resolution stipulates that the state registration of the right of land plot ownership whose registration was performed before January 01, 2013 in accordance with the legislation in force at the time of the registration is performed under condition that the relevant information about registered rights is available in the State Land Cadastre. The Resolution also establishes legal mechanisms for checking the availability of rights of land plot ownership registered before 2013, which will allow to avoid the existence of the “double lease” in the future. In addition, it provides the possibility for the state registrar to correct technical mistakes he/she has identified or the unreliable and inaccurate information. Another important feature is the procedure required by the legislation to verify the cadastre number of the land plot to avoid abuse in the course of the registration of property rights. On December 07, the Verkhovna Rada of Ukraine approved the Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine and Certain Ukrainian Legislation to Ensure Balanced Budget Revenues in 2018” (Registration # 2245 of December 07, 2017). The document envisioned a number of changes in the procedure for paying the land tax and land lease in 2018. For example, land plots given to the railway company within the strip of landing and land plots granted to mining enterprises for the extraction of mineral resources and the development of mineral deposits will be taxed at the rate of 25% of the amount of tax calculated in accordance with Articles 274 and 277 of the Tax Code of Ukraine. The consumer price index for 2017 used to determine the ration of indexation of normative monetary valuation of agricultural land, lands of populated areas and other non-agricultural lands will be applied with the value of 100%. Thus, the indexation rate of the normative monetary valuation in 2017 will be 1. The law provides local governments where the normative and monetary valuation of lands has been performed the possibility to set the annual rent amount of no more than 3% and up to 12% of the normative monetary valuation. Such a rule of the law apply to local governments that have conducted a normative and monetary valuation, which will provide, in opinion of PULSE Project experts, additional resources of revenues to the city budget.

Activity 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 VRU

Local government caucus and cooperation with parliamentary factions During the reporting period, the PULSE Project utilised the tool to interact with the parliament including supporting the work of the Inter-Faction Local Government Support Group (local government caucus), providing expert highlights of draft laws and their impact for factions, participation in the work of parliamentary committees, and preparation of expert opinions on draft laws.

Day of Dialogue with the parliament On November 14, 2018, the Project conducted a Dialogue Day with the parliament in Kyiv. The event brought together 310 representatives including village, town and city mayors and representatives of AUC member communities. The central state executive authorities were represented by Prime Minister of Ukraine V. Groisman, National Deputies of Ukraine O. Prodan, D. Andriyevskyi, D. Bilotserkovets, Yu. Bublyk, and

31 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project O. Berezyuk; Cabinet of Ministers members: Vice Prime Minister of Ukraine and Minister of Regional Development, Construction, Housing and Municipal Utilities H. Zubko, Minister of Finance O. Danylyuk, Minister of Education and Science L. Hrynevych, Minister of Social Policy A. Reva, Minister and of the Cabinet of Ministers O. Sayenko. The date of the event was not chosen by chance, since during the current plenary week the approval of the draft National Budget of Ukraine for 2018 was expected. Reflection of local government interests in the budget process is a key issue and this event has become another tool to promote the local government interests and securing support from the Cabinet of Ministers and the parliament. During the meeting, Prime Minister of Ukraine V. Groisman emphasized that “we are moving to a new level of interaction between local governments and the central government” and declared the support for incorporating three important proposals form local governments: preserving the current incentives and mechanism for equalisation of local budgets, preserving the current mechanism to pay for privileges for housing and municipal utility services through the subvention from the National Budget (rather than from local budgets) and repayment of mid- term loans not at the expense of local budgets (this used to make it impossible to attract cheap loan resources).

National Deputy of Ukraine O. Prodan who is the representative of the AUC Chairman in the parliament noted the importance of joint actions with the Inter-Faction Local Government Support Group, because such cooperation makes it possible to take into account the position of the AUC and local governments in the draft National Budget. First Deputy Chairman of the Verkhovna Rada Committee on Housing and Municipal Utility Services D. Andrievsky and Chairman of the Samopomich O. Berezyuk expressed their support to the AUC activity aimed at establishing effective dialogue with parliamentary committees and factions.

Also, during the meeting, the participants voted to express their support to 17 draft laws currently under consideration in the Verkhovna Rada of Ukraine to promote further development of local governance and decentralisation. Based on the discussions during the Dialogue Day, the AUC appealed to Speaker of the Verkhovna Rada of Ukraine A. Parubiy with a request to accelerate the consideration and approval of the draft laws mentioned above. To promote these bills the AUC also prepared and distributed in parliamentary factions and groups of highlights about the draft laws mentioned above, as well as conducted consultations.

Based on this work, the AUC managed to achieve the following: x On November 14, 2017, the Verkhovna Rada of Ukraine at its evening session voted on the Law on the National Budget of Ukraine for 2018 in the first reading. This law was approved in the second reading on December 07, 2017 and was signed by the President of Ukraine on December 31, 2017. The AUC managed to earmark significant financial resources for local governments for 2018 (see below); x On November 16, 2018, the parliament approved the draft Law of Ukraine "On Introducing Amendments to the Law of Ukraine" On Voluntary Consolidation of Territorial Communities "Concerning the Voluntary Mergers of Territorial Communities of Villages and Towns by Territorial Communities of Oblast Significance Cities (Registration # 6466) in the first reading. The purpose of the document is to unblock the process of consolidation around oblast significance cities. AUC experts prepared a number of comments to be included for the second reading; x On November 16, 2018, the parliament approved the Draft Law “On Introducing Amendments to the Law of Ukraine “On Regulation of Urban Development Activities” (Registration # 6403), which enables communities to prepare plans for their territories and determine the functional purpose of each land plot both within and outside settlements. Experts of the Association of Ukrainian Cities participated in the preparation of this draft law; x On December 21, 2018, the Verkhovna Rada of Ukraine approved the draft law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Reform in the Parking System” (Registration # 5363), which will allow to resolve issues in communities in the parking system. PULSE experts took actively participated in the preparation of the draft law and promoted it in the parliament. The AUC Board emphasized the need to resolve this problem back in 2016-2017. The law was sent to the President of Ukraine for signature.

Budget Process of 2018 The budget package (the draft National Budget for 2018 and amendments to the Budget Code) considered by the Parliament in the first reading envisioned a significant deterioration of financial sufficiency of territorial communities. During the quarter, the AUC engaged in active work to take into account its suggestions and comments during the elaboration of the draft law in the second reading. The AUC involved a number of

32 October – December, 2017 Eighth quarter of Project implementation National Deputies who registered comments and proposals, as well as actively defended them. In the course of the consideration of the draft National Budget for 2018 and the relevant amendments to the Budget Code of Ukraine, the PULSE expert promptly prepared the necessary analytical materials on specific controversial positions that were not agreed upon by the Ministry of Finance or were not supported at meetings of the working group at the Verkhovna Rada Budget Committee and informed National Deputies whether Ministry of Finance accepted certain proposals to defend key positions and prevent the failure to consider community interests.

To improve the quality of local budget indicators in 2018, PULSE experts prepared justifications for the inappropriateness of certain changes, as well as comments and proposals to the budget package. In general, National Deputies filed more than 30 comments and proposals to the draft National Budget for 2018 and related draft laws. Local government caucus members supported the position of the AUC at meetings of parliamentary working groups and committees. All media comments on TV and radio discussions of local budgets for 2018 conveyed criticism of unjustified and unreasonable steps to give additional burden on local budgets. To get support for its suggestions and comments to the draft National Budget for 2018, AUC prepared analytical materials and infographics and distributed them to parliamentary factions.

During meetings at Budget Committee working groups and at the final Committee meeting, local government caucus members actively supported the comments proposed by PULSE. As a result of such actions, they managed to keep significant financial resources in local governments for 2018: 1) privileges for housing and utility services will be covered by the National Budget (7 billion USD); 2) stimulating mechanism for equalisation of local budgets was preserved (3.3 billion UAH); 3) problem with debt on mid-term loans was resolved (9 billion UAH); 4) all local budgets were included in the system to redistribute additional subsidies (16.5 billion UAH); 5) prevented shifting the burden of supporting Certification Level I - II higher educational establishments to oblast significance cities (6 billion UAH). In addition, 371 colleges, which are structural subdivisions of universities and institutes, will continue to financed form the National Budget; 6) education and health care subventions increased by correspondingly 5.2 billion UAH and 7.9 billion UAH; 7) the right to direct unused balance funds of the education subvention for the renovation of the material and technical base of educational institutions was preserved; 8) all CTCs where elections took place in 2017 are transferred to direct inter-budget relations; 9) subvention in the amount of 1.9 billion UAH for infrastructure improvements in all 665 CTCs; 10) envisioning the National Regional Development Fund in the amount of 6 billion UAH; 11) envisioning 273 million UAH to local budgets as a result of state tax privileges to the entities engaged in subjects of space activity and aircraft industry construction; 12) envisioning a new revenue source for all local budgets: a fee for issuing a license for businesses engaged in lotteries; 13) 1 billion UAH for the repayment of the difference in tariffs at the expense of a subvention from the National Budget to local budgets; 14) 200 million UAH for the new national target Potable Water of Ukraine program; 15) Increasing the State Fund for Youth Housing Construction Assistance by 100 million UAH (for co- financing of local housing programs); 16) ensuring significant resources to local budgets for the development of the road network: x preserving the provision for directing 13.44% of the excise tax on fuel (7-9 billion UAH annually) to local budgets for 2018 and 2019; x secured transfer of 35% of funds of the State Road Fund to regions (11.4 billion UAH). At the same time, not less than 20% of these funds will go to repair streets and roads in settlements; x customs experiment to finance road development activities (local budgets as recipients) is continued in 2018; 17) preventing withdrawal of 10% of collections from the environmental tax from village, town and city budgets and CTC budgets; 18) streamlining the legislation requirements regulated to local government and CTC ordinances on setting local taxes and fees.

Working sessions of Regional Policy Dialogue Platforms

33 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

A regional policy dialogue platform is a joint meeting of mayors of AUC Regional Office (RO) member municipalities, oblast leadership, and National Deputies who were elected from the given region, which are conducted with the purpose of supporting the approval in the parliament of the legislation including the draft laws prepared by AUC experts aimed at resolving local government problem issues in selected regions. The Project is planning to conduct two meetings of regional policy dialogue platforms every year.

During the reporting period, the Project conducted 8 working sessions of regional policy dialogue platforms, namely , namely Dnipropetrovsk, Zaporizhzhya, Ivano-Frankivsk, Kyiv, Kirovograd, Rivne, Kherson and Chernihiv regions. 10 National Deputies of Ukraine took part in the meetings.

Date, venue, topic, and Brief description of the event participants of the event Working session of the Kyiv The event participants discussed issues related to improvements of Regional Policy Dialogue legal aspects of the implementation of energy efficiency steps in Platform communities and highlighting best practices of communities in October 05, 2017, city of Kyiv introducing efficient energy saving equipment. Based on discussions, the participants appealed to the National Topic: Mechanisms for Deputy of Ukraine who was present at the meeting with a request to implementation of energy support the position of local governments regarding the preparation efficiency activities in and approval of effective legislation on state support for energy communities: legal and practical efficiency activities in communities and the legislation on public- aspects. private partnerships in this sphere. Participants: village, town and city The participants also came up with a request to support the draft Law mayors, CTC mayors, of Ukraine “On Housing and Municipal Utility Services” # 1581 and representatives of the Oblast to prolong the implementation timeframe of the National Targeted Council, regional consultants, and Economic Program for Energy Efficiency and Supporting the National Deputy of Ukraine H. Production of Energy from Renewable Energy Sources and Meparashvili. Alternative Fuels for 2010-2017 till 2018. Working session of the Kherson The event participants discussed the main provisions of the draft Law Regional Policy Dialogue of Ukraine “On the National Budget of Ukraine for 2018” in the part Platform dealing with budget sufficiency of communities. October 12, 2017, city of Kherson Following the discussions, the participants decided to appeal to the National Deputy with the following proposals to the draft National Topic: National Budget of Budget for 2018: Ukraine for 2018: Issues and - to redistribute the funds of the additional subsidy for the opportunities for local expenditures shifted form the National Budget for education and governments. health care facilities (16.5 billion UAH). Increase the amount of Participants: city and town education subvention to 4.5 billion UAH. to ensure proper financing mayors, CTC mayors, regional of labour costs for teachers. Ensure the financial support for consultants, OSA representatives, vocational training exclusively from the National Budget; and National Deputy of Ukraine - to increase the rate of PIT collections to oblast significance cities, O. Spivakovskyi. CTCs and Kyiv to 65%; - envision direct inter-budget relations with all CTCs where initial elections took place in 2017; - increase the share of the excise tax on fuel produced and imported into the customs territory of Ukraine to local budgets from 13.44% to 17.66% due to considerable amount of funds under collected by local governments in 2017. Working session of Rivne The event participants issues of the legislative framework of the Regional Policy Dialogue decentralisation reform and budget policy for 2018. Platform Based on the discussions, the participants prepared a number of October 26, 2017, city of Rivne proposals that were forwarded to National Deputy of Ukraine who was present at the event to support them in the parliament, namely: Topic: Legislative support for the - to amend Sub-Paragraph 4, Paragraph 297.1, Article 297 of the Tax decentralisation reform and budget Code of Ukraine to abolish the preference on economic activities for policy for 2018. single tax payers of Groups I-III; Participants: city and town - to prevent shifting in the draft National Budget of Ukraine for 2018 mayors, CTC mayors, regional the responsibility to finance privileges to the population on payments

34 October – December, 2017 Eighth quarter of Project implementation

consultants, OSA and Oblast for electricity, natural gas, heat, water and sewerage services, fees for Council representatives. and maintenance of buildings and edifices and adjoining territories, and National Deputy of Ukraine Yu. removal of household garbage and liquid sewage to local Voznyuk. governments; - specify in the legislation the right of CTCs to direct inter-budget relations, in particular with regard to the additional subsidy, which is envisioned for oblast budgets in the draft National Budget for 2018, and to retain the existing in incentive mechanism of horizontal budget equalisation without changing the percentage of reverse subsidies from 50 to 80%; - accelerate the approval of the draft Law of Ukraine “On Municipal Guard”; - accelerate the implementation of the decentralisation reform as a key local government reform. Working session of the Chernihiv Based on the discussions, the event participants appealed to National Regional Policy Dialogue Deputy of Ukraine O. Kodola with the following requests: Platform - support the approval of the Law of Ukraine “On Service in Local October 24, 2017, city of Governments" as the one that introduces the foundations of activities Chernihiv of local governments; - prevent the approval of the draft Law of Ukraine “On Introducing Topic: Strategic planning for Amendments to Certain Ukrainian Legislation Regarding State sustainable community Oversight (Control) of Compliance of the Local Government Act development. with the Constitution and Law of Ukraine”, as it minimises the principle of local democracy; Participants: city and town - prevent the approval of the draft Law of Ukraine “On the National mayors, representatives of the Budget of Ukraine for 2018” in the version where the financial Oblast Council and OSA, regional support to educational and health is shifted to local budgets. consultants, and National Deputy of Ukraine O. Kodola. Working session of the The event participants discussed the peculiarities of the formation of Kirovohrad Regional Policy local budgets for 2018. Based on the discussions, the participants Dialogue Platform came up with the following proposals: October 26, 2017 - provide a subvention from the Nb1 to local budgets for paying the full amount of privileges and subsidies; Topic: Peculiarities of the - ensure writing off the debts of local budgets on mid-term loans and formation of local budgets for interest-free loans granted to local budgets at the expense of the 2018. single treasury account in 2009-2014; - leave Article 99 of the Budget Code of Ukraine unchanged in the Participants: city and town part dealing with the percentage calculation of the amount of the mayors, CTC mayors, OSA and reverse subsidy for budgets of oblast significance cities (50%); Oblast Council representatives, - transfer the expenditures for vocational training covered by the regional experts, and National subvention from the National Budget to the oblast budget. Specify in Deputy of Ukraine K. Yarynych. the legislation the provision about the coverage of all expenditures in the education and health care sectors only at the expense of the National Budget of Ukraine. The proposals were submitted to the National Deputy who was present at the meeting to take them into account during consideration of the issues mentioned above in the Verkhovna Rada of Ukraine. Working session of The event participants discussed problem issues of the formation of Dnipropetrovsk Regional local budgets in 2018 and issues of fiscal decentralisation. Platform, Based on the discussions, the participants came up with a number of October 31, 2017, the city of proposals that were submitted to the National Deputy who was Dnipro present at the event to support them in the Verkhovna Rada of Ukraine, namely: Topic: Formation of local budgets - reduce the amount of the reverse subsidies from the National in 2018. Budget Decentralisation Budget of Ukraine and determine their amount based on the current mechanism of horizontal equalisation of fiscal capacity of the Participants: city, village respective local budgets in accordance with Articles 98 and 99 of the chairmen, heads of CTC, Budget Code of Ukraine by reducing the amount of the stabilisation

35 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project representatives of the regional subsidy; council, regional advisers, and - preserve the current mechanism of financing privileges for housing National Deputy of Ukraine I. and utility services at the expense of the subvention from the Kulichenko National Budget of Ukraine; - to ensure proper functioning of the education and health care sectors in 2018, increase the volume of education and health care subventions to 4.5 billion UAH. and 6.1 billion UAH respectively; - to increase as of 2018 the share of collections to local budgets from the excise tax on fuel produced or imported into the customs territory of Ukraine from 13.44% to 17.66%; - amend the Law of Ukraine “On State Assistance to Business Entities” to significantly reduce the time limits the Anti-Monopoly Committee to provide its expert opinion (now it is 9.5 months) in case when the financial assistance is provided from local budgets to municipal utility companies. Working session of the The event participants discussed the issues of the legislative Zaporizzhya Regional Policy framework for budget relations and local budget sufficiency in 2018. Dialogue Platform Based on the discussions, the participants appealed to the National November 24, 2017, city of Deputy of Ukraine who was present at the event with a request to Zaporizzhya support the position of local governments regarding: - necessity of including in the draft National Budget for 2018 funds Topic: Legislative framework for for subvention to local budgets to cover the corresponding privileges the work of local governments in (in particular for urban public transportation services) and the the sphere of social protection. expenditures for the implementation of delegated powers; - preventing in the draft National Budget for 2018 the transfer of Participants: city and town expenditures for privileges on payments for electricity, natural gas, mayors, CTC mayors, OSA and district heating, water supply and sewerage, apartment block Oblast Council representatives, maintenance and solid waste services, as well as the repayment of regional consultants, and National debts on payments for consumed housing and municipal utility Deputies of Ukraine M. Frolov, O. services to local budgets; Romanovskyi and I. Artyushenko. - preventing the payment for utility services and electricity consumed by institutions of social protection, pre-school, school and vocational schools, culture and medicine from local budgets. Working session of the Ivano- Based on the discussions, the participants came up with problem Frankivsk Regional Policy issues and handed them to the National Deputy of Ukraine who was Dialogue Platform present at a meeting to resolve them in the Verkhovna Rada of November 28, 2017, city of Ivano- Ukraine, namely: Frankivsk - allocate subventions from the National Budget to finance vocational training, secondary education and health care at the Topic: Development of local expense of the National Budget, including the expenditures of such governance in the context of institutions on housing and utility services, energy sources, etc.; reforms. Peculiarities of the - resolve the issue of privileged urban public transportation services preparation of budgets for 2018. for certain categories of citizens, by approving regulations to switch over to personalised monetary assistance in this sphere; Participants: city and town - support the approval of Law of Ukraine #2489 “On Service in mayors, CTC mayors, OSA Local Governments” with prior concurrence with all its provisions by representatives, regional the AUC; consultants, and National Deputy - to support the approval of Draft Law of Ukraine #6466 “On of Ukraine Yu. Solovei. Voluntary Merger of Territorial Communities to Oblast Significance Cities” and #6743 “On Metropolitan Areas”.

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

Interaction with the Cabinet of Ministers Participation in meetings of the Cabinet of Ministers and its Committees

36 October – December, 2017 Eighth quarter of Project implementation During the reporting quarter, the representatives of the Association of Ukrainian Cities and PULSE Project experts participated on a regular basis at meetings of all three Cabinet of Ministers committees: x Committee on Economic, Financial and Legal Policy, Development of the Fuel and Energy Complex, Infrastructure, Defence and Law Enforcement Activities; x Committee on Social Policy and Humanitarian Development; x Committee on European, Euro-Atlantic Integration, International Cooperation and Regional Development. The main trend of interaction between the Project and the Cabinet of Ministers was professional and timely preparation by Project experts of draft regulations, which were submitted for consideration by the Cabinet of Ministers at the phase of their consideration in the Cabinet of Ministers committees. Strengthening this very sphere of the Project performance provided opportunities to considerably improve monitoring of the Cabinet of Ministers agenda and to improve the quality of regulations the Cabinet of Ministers approved during the 4th quarter of 2017. Over the reporting period, AUC representatives participated in 14 meetings of the Cabinet of Ministers of Ukraine and 22 meetings of its Committees, in particular: Committee on Economic Policy - 10; Committee on Social Policy – 7 and Committee on Regional Development - 5 (Table 1.5).

Table 1.5 Participation in the meetings of the Cabinet of Ministers and its Committees in the 4th quarter of 2017

Month Number of attended Number of draft Number of regulations dealing with local Cabinet of Ministers Cabinet of government issues meetings and Ministers Total: including including those meetings of its regulations worked those not concurred by Committees * upon concurred by the AUC the AUC

October 12 311 121 113 8 November 11 296 110 102 8 December 13 554 197 188 9 Total: 36* 1161 428 403 25

* Including: Cabinet of Ministers meetings - 14, Cabinet of Ministers Committee meetings - 22, in particular, Committee on Economic Policy - 10; Committee on Social Policy - 7; Committee on Regional Development - 5. Monitoring work of PULSE experts covered 1,161 draft Cabinet of Ministers regulations in particular, 112 draft laws of Ukraine, 45 draft presidential decrees and directives, 862 draft resolutions and directives of the Cabinet of Ministers of Ukraine, 136 expert opinions on draft laws, legislation implementation plans, etc. The draft regulations reviewed by PULSE experts included 428 draft documents directly or indirectly influencing the process of local government development (Chart 1.1.).

37 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Chart 1.1. Number of Cabinet of Ministers regulations PULSE worked upon in the 4th quarter of 2017

Based on the review, the Association concurred with 403 regulations on local government issues (Chart 1.2.).

Chart 1.2.

Number of concurred (not concurred) draft Cabinet of Ministers regulations on local government issues in the 4th quarter of 2017

These regulations include 51 documents developed upon initiative and/or with the participation of AUC, which significantly contributed to decentralisation and capacity building of communities in all sectors where PULSE advocacy activities took place, specifically: 1) 11 Laws of Ukraine and draft laws of Ukraine: - Draft Law #6388 of April 14, 2017 (included in the VRU agenda under #2149-VIII of March 10, 2017), whereby the Law extends to energy and utilities, gives the possibility of providing administrative services according to the declarative principle, ensures the provision of administrative services through the CASs established by the local council, and defines a standard list of reasons to deny the provision of administrative services.

38 October – December, 2017 Eighth quarter of Project implementation - draft law #7118 of September 18, 2017 (included in the agenda of the Verkhovna Rada #2149-VIII of March 10, 2017), which extends the powers of the local governments in the sphere of land relations through granting CTCs powers to manage state-owned lands outside settlements and the transfer of these lands to communal property. - Draft Law #7297 of November 16, 2017 (on October 06, 2017, it was considered by the Cabinet of Ministers Committee on Regional Development, on November 15, 2017 it was approved by the Cabinet of Ministers, on November 21, 2017 it was sent for consideration to the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance), which assigns the leading role to the territorial community charter within system of local government ordinances and promotes the regulatory framework for effective public control of local government activities and their officials. - Law of Ukraine #2168-VIII of October 19, 2017 (signed by the President on December 29, 2017) introducing a new mechanism for financing health care services and drugs by fixing the volume and value of the state-guaranteed health care package, introducing unified tariffs for health care services and drugs, introducing reimbursement of the cost of prescribed drugs according to a specified list, establishing a new central state executive authority to implement the national policy in the sphere of financial support for the provision of health care services and drugs (“unified national customer”), and expanding the list of entities that can provide primary medical care. - Draft Law #6604 of June 21, 2017 (included in the agenda of the Verkhovna Rada #2149-VIII of March 10, 2017, approved by the Verkhovna Rada in the first reading on October 19, 2017), which brings in conformity with the new model of financing of health care and with the public health system the articles of the Budget Code delineating expenditures between budgets, in particular, by defining the authorized central body to finance health care services, describing the roles of budgets of oblast significance cities, rayon budgets and CTC budgets in the provision of health care, introducing the preconditions for making spending on the preparation of local programs and development of health care institutions, introducing a new approach to delineation expenditures between budgets (as of January 01, 2018 for primary health care and as of January 01, 2020 for secondary and tertiary care) and introducing a transition period of 2018-2019 for a new financial model for the provision of health care services. - Law of Ukraine #2206-VIII of November 14, 2017, which extends the powers of local governments to improve the level of health care in rural areas, in particular, regarding the provision of equipment and drugs to health care facilities for improving primary health care, development of material and technical base and introduction of modern technologies in health care, training and involvement of qualified medical personnel, in particular by providing them with housing, transportation, opportunities for advanced training, and promoting favourable working conditions.  Draft Law #7149 of September 09, 2017 (on December 07, 2017, it was reviewed and approved by the Cabinet of Ministers Committee on Economic Policy), which improves the mechanism for directing to local budgets collections from the personal income tax, thus strengthening the revenue base of local budgets, in particular, CTC budgets.  Draft Law #7453 of December 27, 2017 (on December 27, 2017 it was approved by the Cabinet of Ministers, on January 02, 2018 it was sent for consideration to the VRU Committee on State Building, Regional Policy and Local Self-Governance), which establishes unified standards for conducting public consultations for all state executive authorities and local governments.  Draft Law of Ukraine on Concessions (on December 27, 2017 it was approved by the Cabinet of Ministers), which envisions the systematisation of current regulatory acts regulating concession activity, harmonisation of regulatory and legislative framework for public-private partnership on the basis of concession agreements and public-private partnership agreements, implementation of best international experience in engaging private sector to infrastructure improvements in the national (municipal) sector of the economy, and elimination of inaccuracies and legal conflicts revealed during the application of the concession legislation in Ukraine. At the same time, the Cabinet of Ministers approved two “package” draft laws amending the Budget and Tax Codes of Ukraine to promote favourable environment to involve the private sector in the implementation of infrastructure projects under public-private partnership, in particular, concession agreements. 2) 16 Resolutions of the Cabinet of Ministers and draft resolutions:  CMU Decree #741 of October 04, 2017, which updates standard provisions on the Center for Social and Psychological Assistance, the Social Center for Mother and Child, the Center for the Re- Socialisation of Addicted Youth, the Center for HIV-infected children and youth, the social Dormitory for Orphans and Children Deprived of Parental Care.

39 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project  CMU Resolution #812 of October 25, 2017, which resolves the issues related to the use of electronic tickets for travel in urban transportation (including for the privileged categories).  CMU Resolution #816 of 25.10.2017, which increases the possibilities to apply the mechanism to repay the difference in tariffs between the actual cost of heat energy and tariffs approved and/or set by state executive authorities or local governments.  CMU resolution #951 of November 08, 2017 introducing the first phase of monetisation of benefits and subsidies at the level of enterprises providing housing and utility services.  CMU Resolution #863 of November 15, 2017, which abolished the restrictions on the use of remaining balance funds of the subvention from the National Budget to local budgets, in particular, it provided an opportunity to use them to update the material and technical base of educational institutions and for the development of inclusive educational environment.  CMU Resolution #870 of November 15, 2017 (comes into effect on February 23, 2018), which brings the current mechanisms to set tariffs for housing and utility services in line with the requirements of the legislation, and resolves the problem with the compensation of losses for companies arising during the period of tariff setting by the authorized body by including the amount of losses in the tariff at their next revision, or by the decision of the corresponding local government at the expense of the local budget.  CMU Resolution #877 of November 15, 2017, which approved the procedure and conditions for granting subventions to local budgets for the construction/capital repairs/reconstruction of housing for family-type orphanages, social housing for orphans, children deprived of parental care, which would stimulate the process of deinstitutionalisation.  CMU Resolution # 983 of December 06, 2017, which determines the mechanism for the provision and use of the subvention from the National Budget to local budgets for the development of the health care system in rural areas, in particular, for the implementation of construction of municipal health care facilities projects, the purchase of medical equipment, and supplies facilities, development of telecommunication infrastructure, and provision of housing and transportation for health workers working in rural areas.  CMU Resolution #925 of December 06, 2017, which offers new and improves current mechanisms to fight against raiding, including in the agricultural sector, protection of property rights and interests of landowners and land users, as well as state registration of rights to real estate.  CMU resolution #1032 of December 12, 2017, which prolongs until 2020 the State Program for the provision of housing for youth, outlines the mechanism of preferential financing for purchase of housing, as well as repayment of liabilities under previously concluded agreements at the expense of the National Budget special fund, local budget funds, as well as outside resources.  CMU Resolution #1062 of December 27, 2017, which allows to unify information about state investment projects whose implementation goes with the state support in one State Register of Investment Projects and ensures easy understanding of the projects and implementation monitoring.  CMU Resolution #1088 of December 27, 2017, which approved the formula for the distribution of the education subvention between local budgets taking into account the number of students, the volume of loading, peculiarities of teacher salaries, territorial differences, etc., and envisions the use of the subvention to pay salaries for teachers within the state guaranteed limits of financing of educational services.  CMU Decree #1075 of December 27, 2017, which approves the methodology for calculating the cost of health care services, which ensures unified approaches to cost accounting in health care institutions based on a unified top-down principle taking into account the costs of salaries to medical personnel, drugs, utilities, depreciation of equipment, and sets the foundations for unified tariffs within the framework of the program of state medical guarantees.  CMU Resolution #1077 of December 27, 2017, which defines the mechanism to establish for three years the supervisory board of a municipal health care institution by the decision of the owner, as well as changes the type of contract with the manager of the municipal health care institution.  CMU Resolution #1094 of December 27, 2017, which defines the organisational aspects and the mechanism for conducting an open competition for the position of the manager of the municipal health care institution.  draft CMU Resolution, which introduces the regulations on the National Health Service of Ukraine, a national insurer, who will conclude contracts with health care institutions and procure public health care services from them (will start its work by July 2018). 3) 24 directives of the Cabinet of Ministers of Ukraine:

40 October – December, 2017 Eighth quarter of Project implementation

 CMU Directive # 736-р if October 11, 2017, which provided the opportunities to establish and run Centers for Administrative Services including social services on the territories of oblast significance cities and CTCs, to increase the efficiency of social services for citizens.  CMU Directive # 782-p of October 11, 2017, which significantly increases the list of administrative services up to 106 that citizens can receive in Centers for Administrative Services, in particular, getting a driver's license, registration (re-registration, de-registration) of transportation vehicles, registration of registration of civil status acts, getting permits for employment of foreigners, and provision of social services.  CMU Directive # 821-p of November 15, 2017, which envisions the regulatory framework for a new system to finance health care, unified national customer for medical services, unified electronic system for exchanging medical information, hospital districts, autonomy of health care establishments, review of unified clinical protocols, as well as the introduction of a new model of health care financing;  CMU Directive # 903-p of December 13, 2017, which defines the action plan for activities to reform the system of comprehensive secondary education by 2029 and the timeframe for its implementation. During the reporting quarter, the Cabinet of Ministers also endorsed a number of directives to amend the perspective plans for the formation of community territories for Poltava, Rivne, Sumy, Cherkasy and Chernivtsi oblasts, which update and expand the list of territorial communities that are planning to consolidate in 2017. Also, the Cabinet of Ministers endorsed a number of directives regarding the list and composition of hospital districts in Donetsk, Vinnytsya and Odesa oblasts. All draft directives were concurred by PULSE Project experts. Thanks to the work of the AUC representatives in the Cabinet of Ministers and its Committees, the Cabinet of Ministers withdrew 25 regulatory and legal documents from consideration or returned for revision, which could have had a significant negative impact on the development of local self-governance in Ukraine (see Table 1.), for example:

 On October 03, 2017, the Cabinet of Ministers Committee for Economic Policy received for its consideration a draft CMU Resolution “On Approving the Mechanism for the Repayment of the Debt on Mid-Term and Interest-Free Loans Provided to Local Budgets at the Expense of the Unified Treasury Account in 2009 – 2014” prepared by the Ministry of Finance. The draft resolution offered a suggestion to repay at the expense of local budget general fund the debts on interest-free loans received by local state executive authorities and local governments in 2009 and medium-term loans they received in 2010 - 2014. According to PULSE Project experts, the approval of this draft resolution was unacceptable, for the following reason: Paragraph 21 of Section VI of the Closing and Transitional Provisions of the Budget Code says the debt issue can be resolved only through the legislation mechanisms. In addition, the draft is document is not in line with the requirements of the current legislation, as the funds of the general fund have not been earmarked for a specific purpose, while the draft document offers a suggestion to local governments to pay for at least 1/15 of the debt on treasury loans at the expense of the local budget general. Having taken into account the position of the AUC representatives supported by the conclusions of the Ministry of Justice and the Legal Department of the CMU Secretariat, the Cabinet of Ministers Committee withdrew the draft resolution from consideration.

 On December 05, 2017, the Ministry of Finance submitted for consideration of the Cabinet of Ministers Committee for Social Policy adopted a draft CMU resolution ”On Introducing Amendments to Certain Resolutions of the Cabinet of Ministers”, which envisioned amendments to CMU Resolutions #354 of May 17, 1993 and #555 of August 16, 1994, which oblige local state executive authorities and local governments to take into account the expenditures associated with privileged urban public transportation services for elderly persons and the disabled during the preparation of local budgets for the corresponding year. PULSE Project experts noted that it is not appropriate to approve such changes, as they are not in line with the current legislation. The right to preferential transportation services for labour veterans including pensioners and persons with the Group III Disability was abolished by the Law "On Introducing Amendments and Considering Void Certain Legislative Ukrainian Legislation” #76-VIII of December 28, 2014. In addition, the draft resolution contradicts the principle of autonomy of local governments: in accordance with Article 61 of the Law “On Local Self-Governance in Ukraine”, the autonomy of local budgets is guaranteed by the right to determine how to use local budget funds, while in accordance with Article 71 of the Law

41 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project “On Local Self-Governance in Ukraine”, territorial communities, local government bodies and officials implement the powers granted to them independently. Local state executive authorities and their officials have no right to interfere with the legitimate activities of local governments and officials. The draft Cabinet of Ministers resolution implies interference with local government powers. Based on the discussions of the draft resolution and taking into account the opinion of PULSE Project experts, the Committee postponed the consideration of the draft resolution. In the reporting quarter, the participation of local governments in developing and improving the regulatory framework for local self-governance included working sessions of the Prime Minister and Cabinet of Ministers members with the Association of Ukrainian Cities Board. For example, on October 25, 2017, the AUC Board conducted a meeting with the participation of 42 village, town and city mayors, while the Cabinet of Ministers was represented by the Prime Minister, First Vice Prime Minister and Minister of Economic Development and Trade, Vice Prime Minister and Minister of Regional Development, Construction, Housing and Municipal Utilities, Minister Finance, Minister of Education, Minister of Health Care, Minister of the Cabinet Ministers, Deputy Ministers of Social Policy and Head of the Antimonopoly Committee, and the NEURC Chairman. Based on the discussions of problem issues local government face, the Prime Minister of Ukraine gave directives to central state executive authorities to consider and resolve problem issues raised by local government representatives, in particular: - Ministry of Finance, Ministry of Regional Development, Ministry of Education and Science, and Ministry of Health Care to work with the AUC to address problem issues of indicators of the National Budget of Ukraine for 2018 and inter-budget relations in 2018 and to find common ways to resolve them; - Ministry of Finance, Ministry of Education and Science, Ministry of Health Care, Ministry of Labour and Social Policy, Ministry of Temporarily Occupied Territories to address the issue of improving the mechanisms for the distribution of inter-budget transfers taking into account the number of internally displaced persons in various regions of the country; - Anti-Monopoly Committee of Ukraine to work with the providers of state assistance to clarify the provisions of the Law “On State Assistance to Business Entities”, as well as to place the relevant information on the official web site; Anti-Monopoly Committee and the Ministry of Economic Development and Trade to immediately submit to the Cabinet of Ministers relevant draft directives of the Cabinet of Ministers to ensure compliance with the Law of Ukraine “On State Assistance to Business Entities”;  Ministry of Regional Development, Ministry of Finance, Ministry of Energy and Coal, State Treasury Service, oblast and Kyiv City state administrations together with the NEURC and the NaftoHaz Ukrainy National Joint-Stock Company to take steps to improve the payments on the difference between the actual cost of heat energy, district heating services, hot water supply, centralised water supply and sewerage services that were produced, transported and supplied to the population, and the tariffs approved and/or set by state executive authorities or local governments. Thus, during the reporting period, PULSE Project representatives participated in 36 meetings of the Cabinet of Ministers and its Committees, during which the considered more than a thousand (1,161) Cabinet of Ministers draft regulations including 428 (or 36.8%) dealing with local government issues. Of the regulations dealing wit local government issues, PULSE Project experts supported 403 (or 94.2%) and rejected 25 (or 5.8%). Of the supported regulations, 51 (or 12.7%) regulatory and legal documents had a significant positive impact on the development of local governance in Ukraine, PULSE Project experts reduced the number of regulatory and legal documents, which posed a potential threat to local governments, by almost 40% (or by 37.6%) from 9.3 % to 5.8%. This indicates an increase in the quality of the regulatory and legal documents developed by government agencies. Based on the work of the AUC and PULSE project experts, not only the number of local governments involved in the process of preparation and improving the regulatory framework for local governance increased, but also the cooperation became more efficient with the Cabinet of Ministers and its Secretariat and leading government agencies (Ministry of Regional Development, Ministry of Finance, Ministry of Education and Science, Ministry of Health Care, etc.) involved in the process of the local government reform. This became possible due to the wide range of tools developed by the Association to establish effective communication between sub national and national government (central) authorities.

Cooperation with line ministries

42 October – December, 2017 Eighth quarter of Project implementation PULSE experts continued to cooperate with ministries and other central executive authorities. Below are the main achievements in this area in the reporting year.

Ministry of Regional Development, Construction, Housing and Municipal Utilities of Ukraine

Having analysed the draft Resolution of the Cabinet of Ministers of Ukraine “On Approving the Procedure and Conditions for the Subvention from the National Budget to the Oblast Budget of the Donetsk Region to Pay off Electricity Debt of Water Supply Companies in 2017” a PULSE Project expert proposed an algorithm to improve the transfer of these funds proposed. The algorithm was prepared the Project. Based on the proposals, the author of the regulation introduced the necessary changes to the draft document, which enabled water companies to receive 1.8 billion UAH and to ensure that the payment for used electricity is made by the end of the year.

Thanks to the PULSE Project efforts, the government excluded overly complicated provisions on determining the amount of fees for installing, mainstreaming and replacing devices for commercial metering of used energy resources from the corresponding methodology prepared by the Ministry. Thus, the Ministry of Regional Development proposed to coordinate with apartment block co-owners the size of the relevant fees before they are submitted for approval by local governments. The arguments presented by the PULSE expert convinced the author to exclude the relevant provisions form the draft act.

The PULSE expert became a member of the Ministry commission on endorsing heat supply schemes to populated areas (with the population of more than 20 thousand) and regional programs for modernisation of heat supply systems. The participation of the PULSE expert in the work of this commission will promote objective and impartial review of the approved heat supply schemes and the protection of the interests of local governments.

The PULSE Project expert became a member of the commission for consideration of projects submitted by consolidated territorial communities that can be implemented at the expense of the subvention from the National Budget to local budgets for infrastructure improvements in CTCs. The PULSE Project expert contributed to the impartial and objective selection of projects submitted by CTCs to the commission for consideration and safeguarded the local government interests. The meeting was held on a weekly basis, which provided an opportunity to promptly review and endorse the submitted projects, as well as to provide funding in a timely manner for their successful implementation. According to the outcomes of 2017, 1,434.1 million UAH of the subvention funds were used, which constitutes 95.6% of the planned amount for 2017.

Ministry of Education and Science of Ukraine

The PULSE Project expert participated in the international conference under the title “Regional management of the policy and the system for professional skills improvement in Ukraine: the role and responsibilities of regional vocational education boards”. In the course of the conference, the PULSE Project expert came up with a suggestion to include the labour market needs assessment and requests from local governments for training of professional workers to the list of the responsibilities of regional vocational education boards, as well as to ensure continuous interaction between these regional boards. According to the suggestions of the PULSE Project expert, the Ministry of Education and Science in the near future will prepare the relevant regulatory and legal documents.

The PULSE Project expert participated in the coordination meeting to discuss the draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the List of Professions of National Importance Trained in with the National Budget Funds”. Currently, a new list of professions of national importance has been concurred by the AUC and is under the public discussion at the Ministry of Education and Science.

PULSE Project activities in the sector of public education also made it possible to improve the current methodology for calculating the volume and distributing the education subventions between local budgets. Thus, PULSE Project experts followed up and provided support to the Ministry of Education and Science in the preparation of the draft resolution of the Cabinet of Ministers of Ukraine “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”. On December 27, 2017, the Cabinet of Ministers at its meeting endorsed the Resolution mentioned above. Resolution # 1088 of

43 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project December 27, 2017 stipulates that the new and improved formula for the distribution of the education subvention will: - come into effect as of January 01, 2018 and will be of the permanent force (previously, it was to be endorsed every year); - take into account such factors as the number of certain categories of pupils and peculiarities of training them, the structure teacher salaries, the impact of physical and geographical factors and type of settlements, etc.

Ministry of Finance of Ukraine

A representative of the Ministry of Finance participated in the meeting of the AUC Education Professional Group, which took place in Chernivtsi. He told participants about the current status and future for funding in the public education sector, in particular, about the expenditures from the National Budget of Ukraine. This meeting provided an opportunity to prepare forecasts of local budget expenditures for public education for the next budget period.

In the course of the elaboration of the Draft Law of Ukraine “On the National Budget of Ukraine for 2018”, the PULSE Project expert actively participated in drafting the main approaches to the formation of the revenue part of local budgets. The expert submitted a number of balanced proposals and amendments, which the Ministry of Finance later on took into account (see CHAPTER IV for more details): x alternative options for introducing a new mechanism for horizontal equalisation of local budget capacity to provide financial support; x potential solutions of the issue of payment for privileges for housing and municipal utility services; x proposals to resolve the issue of repayment of local budget debts on mid-term loans, etc.

Ministry of Economic Development and Trade of Ukraine

Based on the discussions at the meeting of a PULSE Project expert with the Ministry of Economic Development and Trade, the Association prepared proposals for further decentralisation of licensing administrative services. In particular, PULSE Project experts came up with a suggestion to shift the right to give permit for the removal and relocation of land cover surface within populated areas to executive bodies of village, town and city councils. The Ministry supported these proposals. As to today, the Ministry of Economic Development and Trade is preparing a draft law to introduce amendments to the Law of Ukraine “On Public Procurement” where the proposals of the PULSE Project expert will be taken into account.

Ministry of Labour and Social Policy of Ukraine

A PULSE Project expert participated in the elaboration for the second reading of the draft Law of Ukraine “On Social Services” (Registration #4607 of May 06, 2016). The Ministry wants to include in the draft law the provisions that will require substantial additional expenditures from local budgets. This, in particular, deals with the introduction of social workers in proportion to the number of residents at the expense of local budgets: 1 expert per 1,000 inhabitants. By the end of the reporting period, the expert convinced some part of representatives of the working group about the inappropriateness of introducing such a provision without providing funds to communities from the National Budget. The PULSE Project expert also received support from the Administration of the President of Ukraine. Currently, the discussion within the framework of the working group is underway.

A PULSE Project expert participated in the working group to prepare a new version of the draft Law of Ukraine “On Collective Agreements and Treaties” and defended the position on preserving the current system of agreement registration: sectoral and territorial agreements are to be registered by the Ministry of Social Policy, while collective agreements and territorial agreements of a different level are to be registered by local offices of the state executive or local governments. Also, the working group proposed to exclude local governments from the clearance process of concluding collective agreements in municipal institutions. The PULSE Project expert to this, since it is impossible to exclude the owner (the local government, in fact, owns communal institutions) from this process, and the rest of the participants supported this idea. The proposed provision was rejected. As of the end of the reporting period, the draft law is supposed to be submitted to the Verkhovna Rada of Ukraine Committee.

44 October – December, 2017 Eighth quarter of Project implementation A PULSE Project expert is a member of the Inter-Governmental Commission for the Protection of the Child Safety. Upon his proposal, the Commission came up with a recommendation for the Ministry of Labour and Social Policy is to organize the conduct child safety training for local government officials, in particular for consolidated territorial communities. This proposal received support form the Ministry and in 2018 it is planned to be implemented.

Ministry of Youth and Sport of Ukraine

The PULSE Project expert continues to participate in the organisation of the national contest called “Youth Capital of Ukraine”. The work of the PULSE Project expert in the supervisory board of the “Youth Capital of Ukraine” competition contributes to the objective and unbiased consideration of applications submitted by cities. The supervisory board has developed a questionnaire for evaluating applications and deadlines for the contest. Consideration of applications from cities is scheduled to be held in January 2018.

All in all, during the reporting period, PULSE Project experts achieved tangible results in cooperation with 6 ministries whose areas of competence include issues that have a significant impact on local governments.

Activity 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

During the reporting quarter, the Project continued supporting its network of regional consultants on legal and budget, as well as local economic development issues at reform offices in AUC ROs. The activities of these consultants were supported by regional communications consultants. In the reporting quarter, the Project management team conducted performance evaluation of the consultants. The findings of the evaluation were good. The Project came up with a decision to extend contracts with regional legal and budget consultants for the following year, as well as with communications consultants. The management decided not to continue cooperation with regional consultants on local economic development to optimise this area of activities. In the reporting quarter, the network of consultants provided, in general, 3,527 consultations local government officials, local council members and other persons, with the total number consultations provided since the beginning of the project being 16,138. By technical area, regional experts provided the following consultations: on legal issues – 1,205; on budget issues – 1,275; on local economic development – 1,047.

1.3.2. Web-tools to increase the efficiency of local government activities

The web-tools prepared by the PULSE Project during Project Year One were integrated into the AUC web site.

Over the reporting period, the Project continued to put content to the new chapters and involve users to interactive opportunities of the site. In particular, the participants of all PULSE events receive info graphics that explains the features of the web site and encourages them to use web-based tools.

The detailed description of the work of the web tools is provided in the relevant part of the report for Project Year Two.

1.3.3. Feedback: receiving and disseminating

45 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Polling of members of the AUC Board on the draft law “On Metropolitan Areas”

In October, the Project finished surveying members of the AUC Board to get their attitude to the draft Law of Ukraine “On Metropolitan Areas” (Registration #6743 July 07, 2017) and for the AUC to present its official position on this draft law. The bill is somewhat contradictory to national policy, according to which in the process of decentralisation should build a system of equal territorial communities. However, the draft law is attractive for city councils of large cities since it provides the opportunity to extend the influence of such councils on the neighbouring local governments and suburban resources. 42 members of the AUC Board participated in the survey. Of these, 30 voted in favour of the approval of the draft law by the parliament and 12 took the opposite position. According to the findings of the survey, the AUC Board presented its official position on October 06, 2017 about the support of the Association of the draft law on metropolitan areas and presented the document to the Chairman of the Verkhovna Rada of Ukraine, as well as to the Committee on State Building, Regional Policy and Local Self-Governance.

Polling AUC Board members about the draft Election Code of Ukraine

On November 07, the Verkhovna Rada approved the Draft Election Code of Ukraine (Registration #3112-1 of October 02, 2017) in the first reading. The Election Code, in case it is approved as law, will govern all types of elections in our country, such as presidential, parliamentary, and local. Aiming at helping the AUC and PULSE Project experts to come up with their position on various provisions of the draft code in the course of the preparation of the document for the second reading in December, the Project conducted a survey of AUC Board members with regard to 18 most important provisions of this document dealing with local elections. The respondents were asked to consider the questions suggested in the questionnaire, fill it out to express their attitude to these questions, as well as, if they wished, to other provisions of the draft Election Code and to send the completed questionnaire to the AUC. 23 members of the AUC Board participated in the survey. Based on the survey findings, the majority of the respondents supported all key new provisions proposed in the draft Election Code of Ukraine in the part dealing with local elections. At the same time, the respondents had serious concerns about the provisions requiring candidates for the positions of city mayors to make cash pledge, as well as to collect voter signatures in support of candidates for positions of village, town, rayon significance city mayors and starostas. The respondents also submitted certain proposals on how to improve some provisions of the draft Code. PULSE Project experts who will become members of the working group to elaborate the draft Elections Code for the second reading to be set up at the Verkhovna Rada Committee on Legal Policy and Justice will consider these ideas and suggestions.

Polling AUC Board members on the expediency of raising estimated salaries In December, the Association conducted a survey of AUC Board members about the official position of the Association of Ukrainian Cities on the need to increase the size of estimated salaries, which are taken into account when determining the cost of construction of facilities. According to the results of the survey with the participation of 29 AUC Board members, the majority of respondents considered expedient to increase the size of estimated salaries, which are taken into account when determining the cost of construction of facilities. The AUC Executive Board will come up with an initiative for central state executive authorities to consider the necessary amendments to the existing regulatory and legal documents after the AUC Board approved its official decision on this issue at its next meeting.

46 October – December, 2017 Eighth quarter of Project implementation ER 2: Resources under local self-governance authority increased

Context

The rates of the revenue flow to local budgets in the 4th quarter of 2017 remained stable (the results of the implementation of local budgets for January-December of 2017 are confirmed by positive trends in the growth of revenues to local budgets, which occurred since last year), but at the same time, overall, annual rates have somewhat decreased. The annual growth rate has dropped almost double. Thus, according to the Ministry of Finance, the increase in revenues to the general fund in 2017 as compared to January-December of 2016 amounted to 30.9% or additional 45.3 billion UAH. During the reporting quarter, the activities of PULSE Project experts were mainly focused on defending the interests of local governments in the course of drafting the Law of Ukraine “On the National Budget of Ukraine for 2018” in terms of increasing their own financial resources of local budgets, preventing a decrease in the revenue part of local budgets, and transferring to local budgets financing of additional powers without financial resources. In addition to this, by pointing out the necessity of infrastructure development during meetings of working groups and meetings of central executives, the Association of Ukrainian Cities contributed to the allocation and distribution to individual entities and projects the subvention from the National Budget for the social and economic development of selected territories in the amount of almost 2 billion UAH. At the same time, the AUC managed to clarify the list of entities and projects, which allowed to ensure proper financing of the corresponding investment projects and programs. At the same time, the Association of Ukrainian Cities provided support and decision on the distribution of funds of the National Regional Development Fund and approval of the corresponding list of projects financed by the indicated funds. As a result, local budgets received almost 2 billion hryvnyas in the 4th quarter. In addition, according to the results of the appeal to the Ministry of Finance of Ukraine on the urgent need to resolve the issue of financing socially significant spheres and the allocation of undistributed part of the stabilization subsidy due to lack of funds for full financial support of educational institutions, payment of wages to doctors, maintenance of the proper state of logistics of vocational education institutions, on November 15, 2017, the Cabinet of Ministers approved Resolution # 873, which distributed the stabilisation subsidy in 2017 in the amount of 900 million UAH from the National Budget to local budgets. The above- mentioned distribution allowed to equalise the budget imbalances that arose as a result of reforming inter- budget fiscal relations in the context of fiscal decentralisation, to increase the level of financial capacity of local budgets to ensure that local governments provide basic guaranteed services to the population. By actively intervening in the process of preparing the main approaches to the formation and implementation of local budgets in 2018, the Association of Ukrainian Cities faced a number of challenges and threats that have been overcome by working closely with the Cabinet of Ministers, parliament and all stakeholders. For example, PULSE Project experts during the quarter of 2017 worked actively with committees of the Verkhovna Rada of Ukraine and the Ministries on revision of certain provisions of draft laws submitted by the Cabinet of Ministers within the framework of the preparation of the draft National Budget of Ukraine for 2018 and the draft Law of Ukraine “On the National Budget of Ukraine for 2018”. Thus, in particular, positions were advocated to prevent the change of the mechanism of horizontal equalization of local budgets, the necessity to include in the subvention from the National Budget the payment to the population of privileges for housing and municipal utility services, redistribution of additional subsidies for the maintenance of educational and health care facilities, including in the calculations of all budgets with direct inter-budget fiscal relations, financing of state-provided privileges at the expense of National Budget funds, provide financing for vocational and technical education and exclusively from regional budgets through educational subventions, transfers of environmental tax revenues from the special fund to the general fund of local budgets and a number of other issues. The AUC managed to defend many positions in the course of budget consultations at the Ministry of Finance before the draft National Budget was submitted for consideration by the Cabinet of Ministers. We managed to defend some of the positions at the stage of filing a document to the parliament. The Association held four meetings with the Prime Minister of Ukraine, where we discussed in detail all the issues of local budgets, prepared visions and options for resolving problems. Thus, in his speech at the All-Hands Meeting of the Association of Ukrainian Cities on November 14, Prime Minister of Ukraine V. Groisman mentioned that the Association of Ukrainian Cities and the Cabinet of Ministers are engaged in high quality and fruitful cooperation.

47 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project During the consideration of the draft National Budget for 2018, a number of National Deputies who are of the “Local Government Support” Inter-Faction Group were involved in the second reading, who made proposals on necessary amendments, defended the position of the AUC in meetings with the Cabinet of Ministers and working groups, actively informed the public about threats and shifting the burden on the shoulders of territorial communities. The Association e secured the submission of prepared proposals and amendments to the draft National Budget of Ukraine for 2018 by 35 National Deputies of Ukraine from all factions and groups, as well as a number of line committees of the Verkhovna Rada, in particular the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance and Verkhovna Rada Committee on Construction, Urban Development, Housing and Municipal Utilities for consideration by the Verkhovna Rada of Ukraine Budget Committee. In general, the Association of Ukrainian Cities managed to defend the main key positions regarding the peculiarities of the formation of local budgets in 2018 (see the section “Resolving Problem Issues and Promoting Sectoral Reforms”) and to take into account local government interests in the course of the approval of the Law of Ukraine “On the National Budget of Ukraine for 2018” (Registration #2246) and the Law of Ukraine “On Introducing Amendments to the Budget Code of Ukraine” (Registration #2233). In general, the analysis of the situation in the fourth quarter indicates the need for stoic defending of the positions of local governments when considering and approving regulatory acts in both the parliament and the Cabinet of Ministers. Without further work on improving inter-budget fiscal relations and expanding the revenue base of local budgets, taking into account the annual increase of spending powers, the capacity of local budgets will be reduced and funds will be directed not to the development of their own infrastructure but to ensure the financing of services guaranteed by the state.

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

Formation of the system of the national system of social standards and norms During the reporting period, the situation in the area of reforms of national social standards and norms (further NSSN) is gradually changing, with progress in various sectors (spheres) being extremely uneven reflecting the overall situation with economic and social reforms in Ukraine. As to the basic national social standard (further NSS) of the amount of the subsistence minimum (as well as the minimum wage (pensions, allowances), the Cabinet of Ministers as of December 01, 2017 increased its amount for all categories of citizens by 4.7% (see. Table 2.1).

48 October – December, 2017 Eighth quarter of Project implementation

Table 2.1 Subsistence minimum in 20171

Amount of the basic national social standard, UAH Social and demographic groups of the as of as of January as of May 01, as of January population December 01, 01, 2017 2017 01, 2018 2017 Subsistence minimum 1,544 1,624 1,700 1,700 Children under the age of 6 1,355 1,426 1,492 1,492 Children aged 6 to 18 1,689 1,777 1,860 1,860 Able-bodied persons 1,600 1,684 1,762 1,762 Persons who have lost their ability to work 1,247 1,312 1,373 1,373 Minimum wage 3,200 3,200 3,200 3,723

At the same time, the approved Law of Ukraine “On the National Budget of Ukraine for 2018” #2246-VIII of December 07, 2017 envisions continued growth of the basic NSS of the minimum wage, in particular by 6.3% (from 3,200 UAH to 3,723 UAH). As of December 01, 2017, the basic minimum subsistence level is 1,700 UAH, for children under 6 it is 1.426 UAH, for children aged from 6 to 18 it is 1,860 UAH, for able-bodied persons it is 1,762 UAH and for disabled persons it is 1,373 UAH (see Table 2.1 and Table 2.2). Table 2.2 Correlation of the minimum wage and the basic payroll level in 2016 – 2020 Year 2016 2017 2018 2019 2020 Minimum wage, UAH 1,439 3,200 3,723 4,173 4,425 Official salary of the employee of the 1st payroll level of the Unified Tariff Scale, UAH 1,174 1,600 1,762 1,921 2,073 Correlation between the basic tariff level and the minimum wage, % 81.6 50.0 47.3 46.0 46.8

According to the calculations of PULSE Project experts, the growth of The basic NSS in December 2017 and the volume of local government financial resources took place in the following way: in the 4th quarter, local government own revenues increased by 13.4% from 29.0 to 32.9 billion UAH being almost 2.5 times more than in the 2nd and 3rd quarters, during which the basic NSS did not increase, while growth was only 5.4%. In particular, in the 4th quarter of 2017: - collections from the PIT increased by 14.6% from 28.1 to 32.2 billion UAH as compared to the third quarter (in the preceding quarter, this growth was only 4.1%); - collections from real estate tax, on the contrary, decreased by 22.2% from 0.9 billion UAH to 0.7 billion UAH (while in the previous quarter, these collections increased 1.8 times, see Table 2.3).

Table 2.3 Local budget collections from PIT and real estate tax in the 1st – 4th quarters of 20172

1 According to the data of the Ministry of Social Policy of Ukraine: http://www.msp.gov.ua/content/socialni-standarti.html 2 According to the data of the Ministry of Finance of Ukraine: https://minfin.gov.ua/uploads/redactor/files/%D0%9E%D0%9D%D0%91%D0%9F%202018-2020.pdf

49 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Type of collections Amount of collections, billion UAH Quarter І Quarter ІІ Quarter ІІІ Quarter ІV PIT 22.7 27.0 28.1 32.2 Immovable property tax 0.4 0.5 0.9 0.7 Total: 23.1 27.5 29.0 32.9

At the same time, the increase of salaries in the reporting quarter increased the burden on local budgets. In particular, during the reporting year the salary level in the sectors of education increase twice totalling almost 50% and salaries in the sector of health care increased in line with to the general trend of remuneration in local governments posed additional risks associated with the financial support for salaries in the education and health care sectors at the expense of subventions from the National Budget. On the other hand, in the fourth quarter, the volume of resource support from the National Budget to local budgets to help local governments comply with national social guarantees (in particular, in sectors of education, health care and social protection) remained actually the same. In particular, the volume of subventions from the National Budget to local budgets for social protection, education and health care increased during October-December 2017 by only 2.7%, which is significantly lower than the increase of local budget expenditures in accordance with the increase in NSS (See Table 2.4). Table 2.4 Subventions from the National Budget to local budgets in the 1st–4th quarters of 20173 Type of the subvention Subvention amount, billion UAH Quarter І Quarter ІІ Quarter ІІІ Quarter ІV Social protection 45.5 21.1 30.1 28.0 Education 11.7 19.5 7.5 11.5 Health care 13.6 13.6 13.6 13.1 Total: 70.8 54.2 51.2 52.6

In particular, the total amount of subventions in the third quarter decreased by 5.5% from 54.2 to 51.2 billion UAH as compared with the second quarter: - the amount of subventions for social protection, first of all subsidies, for housing and municipal utility services decreased in the fourth quarter by almost 7%, from 30.1 billion UAH to 28.0 billion UAH; - the amount of the education subvention increased by 53.3% from 7.5 to 11.5 billion UAH; - the amount of the health care subvention, unlike in Quarters I-III of 2017, somewhat decreased: from 13.6 to 13.1 billion UAH, which constituted 3.7% (see Table 2.4, Diagram 2.1). Due to the influence of the basic NSS on the “revenue” and “expenditure” local budget channels on the financial situation of local governments, there appears to be a gap between the financial resources available at local governments and the amount of powers delegated by the state. First of all, this applies to budgets of new consolidated territorial communities, as the formation (optimisation) of networks of educational and health care establishments takes place on their territory. Chart 2.1. Amount of the subventions from the National Budget to local budgets in the 1at-4th I-IV quarters of 2017, (billion UAH)

3 According to the data of the Ministry of Finance of Ukraine: https://www.minfin.gov.ua/news/bjudzhet/local-budg

50 October – December, 2017 Eighth quarter of Project implementation

Therefore, PULSE Project experts, focusing on safeguarding local government interests, in the course of the preparation of the draft National Budget for 2018 managed to increase the volume of financial support of local budgets from the National Budget. Taking into consideration the impact of changes in NSSN on the financial situation of local budgets, in the reporting quarter PULSE Project experts focused their work on two areas that are key to strengthen the financial autonomy of local governments. First, monitoring and assessment of the legislative framework of NSSN. PULSE Project experts are continuously engaged in monitoring regulatory and legal documents that are being submitted to the line Cabinet of Ministers and Parliamentary Committees or included in the agenda of the working meetings of the Cabinet of Ministers and the parliament, approved at the meetings of the Cabinet of Ministers and the Verkhovna Rada and signed by the President of Ukraine. The experts closely monitor the status of the preparation of the legislative framework for NSSN on a quarterly basis (based on data from the Ministry of Social Policy) in the sectors of education, health care, social protection, housing and utility services, culture, physical education and sports. Second, expert and advisory support is provided to improve the legislative framework to reform NSSN. In view of the failure of central state executive authorities to revisit in the reporting quarter NSSN in the course of the provision of state guaranteed services in the spheres delegated to local governments as envisioned in Paragraph 10 of the Closing and Transitional Provisions of the Budget Code, extending the closing date for this task by March 01, 2018 is an indisputable success of the PULSE Project. PULSE Project experts participated in the preparation of the draft law amending the Budget Code of Ukraine, Registration #7116 of September 15, 2017, which was included in the agenda of the VRU under #2149-VIII of October 03, 2017 and was approved by the parliament on December 07, 2017 under #2233-VIII. Subparagraph 2 of Paragraph 37 of Law #2233 extends the timeframe for this task from March 01, 2017 to March 01, 2018. This step provides an opportunity for ministries and departments to do the preparatory work necessary to reform NSSN, in particular: inventory of regulatory and legal documents, approving NSSN in the narrative and cost formats, making appropriate amendments to regulatory and legal documents governing the application of sectoral standards of service provision and standards for expenditures from local budgets. Third, the Project safeguards the interests of local governments in the course of the preparation rdls1 by line ministries in the sphere of NSSN, supports their approval by the Cabinet of Ministers of Ukraine and the further implementation in the NSSN reform. Thus, in the education sector, PULSE Project experts provided political support for the draft Cabinet of Ministers of Ukraine Resolution “On Approving the Formula for the Distribution of the Education

51 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project Subvention between Local Budgets”. On December 27, 2017, the Cabinet of Ministers endorsed the Resolution “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”. Decree #1088 of December 27, 2017 specifies that the new improved formula for the distribution of the education subvention: - will come into effect on January 01, 2018 will be of a permanent nature (previously, it was approved annually); - takes into account the number and peculiarities of teaching of certain categories of students, structure of teacher salaries, impact of physical and geographical factors, type of settlements, etc.

It should be noted that the draft resolution “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”, against Subparagraph 7 of Paragraph 33 of CMU By-Laws, whereby the CMU has a requirements to send to local government associations draft government acts related to local governments, rights and interests of territorial communities and local and regional development was not provided by the Ministry of Education and Science for AUC concurrence. In the health care sector, PULSE Project experts performed an expert evaluation and support of the draft Cabinet of Ministers Resolution “On Approving the Methodology for Calculation of the Cost of the Health Care Service”. On December 27, 2017, the Cabinet of Ministers at its meeting endorsed the draft resolution as part of the “package” of regulations to reform primary health care. By Resolution #1075 of December 27, 2017, the Cabinet of Ministers endorsed the methodology to calculate the cost of health care services to streamline the approaches to accounting costs of health care institutions based on unified principles and approaches taking into account salaries of medical staff, expenses for drugs, utilities, depreciation of equipment, etc. The endorsement of these provisions gives preconditions for the introduction of a nationwide system for calculation of the cost of health care services. At the same time, while assessing the regulations, PULSE Project experts pointed out the need to elaborate the draft document (and, accordingly, Resolution #1075). In particular, they came with a suggestion to take into account the following: - the need to spell out in the Resolution a clear mechanism (algorithm) to calculate of the cost of health care services, which would ensure transparency of the calculation of the service cost; - bringing the terminology of the Resolution in line with the requirements of the current legislation; - peculiarities of the calculation of a component (package, “package” component) of the “state- guaranteed health care service” as part of the medical service provided by health care institutions and taking into account the guaranteed component when calculating the amount of the health care subvention; - bringing the accounting system used in the Resolution in line with the current accounting standards of Ukraine (National Accounting Standards) in the public sector, which will ensure the systemic approach to all expenses of the health care institution and proper and accountability during the provision of health care services. The project experts also came up with a suggestion for the Ministry of Health Care to conduct multilateral consultations and the appropriate financial and economic overview of the methodology to use specific examples of service calculations and nosologies to amend Resolution #1075 regarding the calculation of tariffs for primary health care. In the sectors of physical culture and sports, as well as culture and art, the updated sectoral NSS were not endorsed. The lack of achievements testifies to the unsatisfactory performance of the line ministries, in particular taking into account the availability of draft Cabinet of Ministers Resolutions on endorsing National Social Standards prepared during Quarters I-III of 2017 with the participation of PULSE experts and approved by the AUC and local governments. Thus, in the reporting quarter, PULSE Project experts joined the work on development and approving of three regulatory and legal documents that have a direct impact on improving the NSSN system. PULSE advocacy efforts provided an opportunity to retain in the current budget legislation the provisions of the Budget Code, which envision the task for the Cabinet of Ministers and central state executive authorities to review the current outdated NSSN, as well as the corresponding timeframe. PULSE activities in the education sector made it possible to specify in the legislation the mechanisms for the financial support of state guaranteed services in education and improve the current methodology for calculating the amount and distribution of education subvention between local budgets. PULSE participation in the preparation of NSSN in the health care sector provided an opportunity to revise the Resolution approved by the Cabinet of

52 October – December, 2017 Eighth quarter of Project implementation Ministers taking into account the interests of local governments and ensure proper financial and economic justification of the costs of delegated powers in the sphere of primary health care and the amount of the needed financial resources from the state. In concluding, it should also be noted that over the reporting quarter, PULSE activities to modernise financial mechanisms for social state guarantees helped to strengthen the position of local governments in the course of the preparation of the National Budget for 2018 and determine the amount and mechanisms for distribution of education and health care subventions from the 2018 National Budget.

Municipal Fiscal Register (MFR)

During the reporting quarter, PULSE performed works for the implementation of the software in pilot communities. In the reporting quarter, consultations were conducted with IT workers in communities for the purpose of rapid deployment of the software on end-user computers and the installation package was upgraded (errors fixed, installation process improved). In addition to this, the Project prepared an instruction for installing the Municipal Fiscal Registry software system. At the same time, work is being done on recording video lessons on how to work with the software system for a more detailed study of its functional opportunities. Upon the recommendations from communities, Project experts filled in and imported the following directories for specific users of the source database: - Address directory (countries, oblasts, rayons, populated areas, geonyms) that corresponds to the directories of the ATAU (Administrative and Territorial Arrangement of Ukraine) and the address directories of the State Register of Voters of Ukraine; - Directory of types of documents (passport, id-card, birth certificate, etc.); - Directory of agencies issuing the documents (for the documents of the old format all names of the authorized bodies have been imported); - Directory of types of documents that indicate ownership of an apartment or a house; and, - Directory of family relations, directory of social statuses, etc. Following SKYPE conferences in these communities, there are two issues that need to be resolved for the effective implementation of the MFR, namely: 1) if structured information in the form of databases being used, for example, by municipal utility enterprises, is available, one should develop a data exchange protocol (tables describing the structure) for the rapid filling of the MFR databases (work on the above is currently underway); 2) if the initial database does not exist, one has to simplify the entering of the initial information, namely to improve the registration (removal) of a resident, allowing the introduction of the basic form of the basic information about the dwelling (household), family, dweller (the work on the above is currently underway). One should also note the promising directions for the development of modules of the MFR, namely: - develop a personal cabinet for residents to directly access to the information available in the database about their lodging, inquiries, characteristics of the building, etc. - introduce online excerpts from the register of inhabitants of the territorial community. The portal is intended for the online creation of excerpts and certificates of family composition at a specific address both for residents (at their own address) and for authorized persons by local authorities at any address. For the protection of personal data we suggest using the following channels: Electronic digital signatures, Idcard, and Bank_ID. - Expand the Contact Center module, namely, to connect the Municipal Advertisement Portal to place the information about the work of enterprises and local governments, which will relate to specific dwellings of the population and premises of legal persons. It will provide an opportunity to send information to personal e-mails and SMS messages to the residents. Develop a new module called "Social Protection" to record the work of social workers.

In the course of analysis of the work carried out on the implementation of the software in the pilot communities, there was a significant interest in using this program, especially the “Labour Resources” and “Fixed Assets” modules. In accordance with IT consultations with community workers, and aiming at quickly deployment of the software on end-user computers, the installation package has been upgraded (errors fixed and installation process improved). One can download the updated installation package at http://tis.if.ua/files/MFRSetup.exe.

53 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project In addition to this, an instruction for installing the Municipal Fiscal Register software package was developed (http://tis.if.ua/files/Інструкція по встановленню МФР.docx). At the same time, work is being done on recording video lessons about how to work with the software system for a more detailed study of its functional opportunities. According to community recommendations, the following directories have been filled in and imported for specific users of the source database: - Address directory (countries, oblasts, rayons, populated areas, geonyms) that corresponds to the directories of the ATAU (Administrative and Territorial Arrangement of Ukraine) and the address directories of the State Register of Voters of Ukraine; - Directory of types of documents (passport, id-card, birth certificate, etc.); - Directory of agencies issuing the documents (for the documents of the old format all names of the authorized bodies have been imported); - Directory of types of documents that indicate ownership of an apartment or a house; and, - Directory of family relations, directory of social statuses, etc.

Following SKYPE conferences in these communities, there are two issues that need to be resolved for the effective implementation of the MFR, namely: 3) if structured information in the form of databases being used, for example, by municipal utility enterprises, is available, one should develop a data exchange protocol (tables describing the structure) for the rapid filling of the MFR databases (work on the above is currently underway); 4) if the initial database does not exist, one has to simplify the entering of the initial information, namely to improve the registration (removal) of a resident, allowing the introduction of the basic form of the basic information about the dwelling (household), family, dweller (the work on the above is currently underway). One should also note the promising directions for the development of modules of the MFR, namely: - develop a personal cabinet for residents to directly access to the information available in the database about their lodging, inquiries, characteristics of the building, etc. For example: http://portal.domivka.if.ua/login/; - introduce online excerpts from the register of inhabitants of the territorial community. The portal is intended for the online creation of excerpts and certificates of family composition at a specific address both for residents (at their own address) and for authorized persons by local authorities at any address. For the protection of personal data we suggest using the following channels: Electronic digital signatures, Idcard, and Bank_ID. An example of the current portal in Ivano-Frankivsk http://mail.domivka.if.ua/login/ - Expand the Contact Center module, namely, to connect the Municipal Advertisement Portal (existing examples http://1580.if.ua and 1580.lviv.ua) to place the information about the work of enterprises and local governments, which will relate to specific dwellings of the population and premises of legal persons. It will provide an opportunity to send information to personal e-mails and SMS messages to the residents. - Develop a new Social Protection module for the purpose of recording social workers activities.

The system of monitoring of main spending units (MSUs) During the reporting quarter, support was provided to the Cabinet of Ministers Committee on Economic, Financial and Legal Policy, Development of the Fuel and Energy Complex, Infrastructure, Defence and Law Enforcement Activity, in term of amendments to the Budget Code of Ukraine regarding the improvement of the procedures and rules for making budget requests of the main spending units of local budgets in accordance with the established local financial plans. The Ministry of Finance received the proposal to update the reporting forms regarding the results of financial and economic activities of MSUs. Some rules and regulations concerning the improvement of the methodology of planning the revenues for general and special funds of local budgets were proposed. The Ministry of Finance of Ukraine received a proposal to give the power to main spending units of local budgets to organise, monitor and evaluate the effectiveness of budget programs for their part, and then use the results of such evaluation in the compilation and analysis of budget requests, respectively, by both the main spending units and the local financial authorities.

The Effective Budget Rating System For the reporting quarter, the Project developed and outlined certain indicators that will be included in the assessment of the effectiveness of the budget process, as well as the methodology for evaluating the

54 October – December, 2017 Eighth quarter of Project implementation effectiveness of the budget process. The indicators and rates for estimating the budget process, the scale of the evaluation points for the indicator of the efficiency of the budget process, the indicators of the quality of evaluation of budget planning, the indicators of budget execution efficiency, the indicators of the quality of budget control, the indicators of budget reporting, and the indicators characterising the degree of transparency of the budget process. During the reporting period, the Project analysed the statistical indicators of the implementation of individual local budgets in order to determine the effect (result) against the expenses that caused and ensured it, and the dynamics of revenues and expenditures. It has been determined that based on the proposed methodological approach, a local financial institution, in cooperation with other institutions, should annually evaluate the effectiveness of the organisation and implementation of the budget process. The Ministry of Finance, in its turn, or third parties should have an opportunity and a unified approach to compare the effectiveness of different budgets. Such analysis and comparison should be carried out in time, which will allow to take preventive measures before the beginning of the next fiscal year based on the received data in the reporting budget year. Consequently, carrying out an assessment of the quality indicators of budget planning, the effectiveness of budget execution, the quality of budget control, indicators that characterise the quality of budget reporting, and the degree of transparency of the budget process will provide the participants of the budget process with the opportunity to provide the information necessary for monitoring the results of the implementation of the budget process and evaluating its efficiency over different periods of time. The above data should facilitate further implementation of budget reform, increase the efficiency of planning and implementation of local budgets, and expand the possibilities for further improvement of budgetary procedures.

2.1.2. Dissemination of best practices and replication of experience

Collections of successes stories and best practices

The fiscal decentralisation reform has introduced new rules of the game between the state and local communities in Ukraine, whereby cities and villages have received considerably more financial powers and, accordingly, budget revenues, which has good effect on their development. Consolidated territorial communities have event bigger opportunities to effectively use the funds at the local level. Today, the number of CTCs that held the initial election, reaches 665, however, only those communities set up earlier are in the position to use budget benefits in full. In 2017, 366 CTC switched over to direct inter-budget relations. They completely manage their own revenues independently and have the opportunity to optimize schools and hospitals at the expense of the National Budget, as well as improve their infrastructure. In addition, CTCs have significant financial support from the state: a subvention for infrastructure improvements, incentives from the National Regional Development Fund, etc. According to the data of the Ministry of Regional Development, in 2017 local budgets increased by 45.4 billion UAH (31%) as compared to the previous year and amounted to 192 billion UAH. At the same time, the budgets of 366 united territorial communities (CTCs) reached 9.3 billion UAH, which is almost twice as high as last year's 95 billion UAH). This growth is attributable to the fiscal decentralisation and the trend to increase continues. Fiscal decentralisation allows local leaders to really carry about their community development. Local budget funds primarily to capital repairs of roads, public transportation vehicles, repairs and equipping of educational and health care facilities, opening of centers for administrative services, housing construction, children and sport facilities, cultural centers, water pipes and garbage sorting stations, etc. This is the best illustration of the success of reforms to decentralise of powers and financial resources and consolidation of territorial communities. The PULSE project has set disseminating and promoting these successes as its prime goal. The publication of Quarterly Collections of the "Book of Successes" is one of the effective tools for such activities. The collection released in late November contains 78 success stories in 10 thematic sections: Local Finance, Community Development, Health Care, Public Education, Social Security, Administrative Services, Human Resources and Organisation, Local Economic Development, Community Security, and Municipal Utilities. PULSE treats the publication of the “Book of Successes” as a motivating and stimulating factor for information dissemination on decentralisation. Indeed, the successes illustrate the mechanisms of effective governance, the efficient use of the increased resources of local budgets, and the attraction of additional funding for infrastructure development, successfully implemented projects and future prospects of consolidated communities. The publication is useful both for community representatives who are only

55 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project hesitant about making the decision to consolidated as well as to media representatives. The “Book of Successes” is published on the web site of the AUC and on its social networks. It is accessible for free and is being distributed as promotional material during Project events and “Itinerary of Successes” study tours.

The “Itinerary of Successes” Nation-Wide Exchange Study Tour Project Component In the reporting period the Project continued the implementation of the national program for success replication study tours for local government officials, which is aimed at dissemination of best practices and successful experience in resolving local problems and innovations, particularly through the growth of local budgets in the context of fiscal decentralisation and new powers in the process of sectoral decentralisation. During the first quarter, three study tours took place, with the participation of 114 representatives of local governments. Date, venue, number of Topic Information about the event participants October 19 - 20, 2017, city of Transparent office type During the visit, the Project organised a Kharkiv. center for the provision of meeting in Kharkiv City Council, where Participants: 41 representatives social services in the city of the council representatives talked about the from 20 cities including city Kharkiv as a new format process of establishing centers for mayors and their deputies, directors for services to citizens providing social services in the transparent and specialists of departments and office format and about the implementation directorates for social protection, of reforms in the sphere of registration. directors and staff of centers for The participants visited the Transparent administrative and social services, Office Social Services Center in Executive Director of the Kharkiv Shevchenkivskyi and Kyivskyi City AUC RO V. Miroshnyk, regional Districts, as well as the Transparent Office consultants of the Kharkiv AUC Service Regional Center where they RO, AUC Social Protection Expert became familiar with the hands-on N. Mykolyuk, Communications experience of these centers. Coordinator of the AUC Center for In addition, local government Professional Development and representatives visited the renovated front Communications O. Zmievets, and office of the Kharkiv City Office of media representatives. Technical Inventory Municipal Company where they saw the results of the reforms the city does in the sphere of registration. Following the event, central and regional media prepared approximately 15 publications. November 15 - 16, 2017, city of Experience of developing The event started with a meeting in the Vinnytsya. the strategy for the public Vinnytsya City Council. Representatives of Participants: 39 representatives transportation system till the Vinnytsya City Council told the from 16 cities including city 2030 and the first outcomes participants about the process of reforms mayors and their deputies, directors of its implementation and reorganization of the public and specialists of departments and transportation system in Vinnytsya, directorates for transportation, preparation of -2020 City Strategy directors and employees of and the Strategy for Public Transportation municipal utility companies, till 2030, spatial development of Vinnytsya, Executive Director of the as well as about the process of introducing Vinnytsya AUC RO V. Filatov, electronic technologies into the city regional consultants of the transportation system. Vinnytsya AUC RO, , In addition, the representatives of Ukrainian Communications Coordinator of cities visited the Vinnytsya Municipal the AUC Center for Professional Transportation Company where they Development and Communications studied the company experience in O. Zmievets, and media improving the transportation system and representatives. modernisation of trams, as well as the trolleybus depot where they became familiar with the experience in doing major repairs of trolleybuses. The participants also learned about the city transportation

56 October – December, 2017 Eighth quarter of Project implementation

infrastructure, and had saw the modernised trams and tracks. Following the event, central and regional mass media prepared approximately 15 publications including a video story about the study tour on the Channel 112 TV Channel. December 13 - 14, 2017, city of Cherkasy investment policy The first day of the study tour started with a Cherkasy as a key to sustainable meeting in the Cherkasy City Council. Participants: 34 representatives community economic Representatives of the Department of from 14 cities including city development Economics and Development told mayors and their deputies, directors participants about the experience in and specialists of departments and investment attraction in the projects in the directorates for economy and sphere of energy saving, modernisation of investments, Executive Director of heat and water supply systems, solid waste the Cherkasy AUC RO S. Kramar, management, as well as about the regional consultants of the participation in international projects and Cherkasy AUC RO, public-private partnerships. Communications Coordinator of The city representatives visited the the AUC Center for Professional Agrochemical Factory, Ltd., an enterprise Development and Communications that actively cooperates with the City O. Zmievets, and media Council in the implementation of social representatives. projects; Cherkasy National Technological University where they became acquainted with the Cherkasy Green Energy Project, which provided them an opportunity to install a solar power plant on the roof of the educational institution. On the second day, the city representatives toured Cherkasy City Gymnasium # 9 named after A. Lutsenko, where they were told about the implementation of the development projects of the institution. They also became familiar with the work of the Cherkasy City Zoological Park. There, the city representatives learned about the experience in attracting grants from Ukrainian and international organisations for the development of utility companies. After the event, central and regional mass media prepare approximately 10 publications including a video story on the Channel 112 TV Channel.

Activity 2.2. Tools for local government to access additional financial resources are in place and utilised

2.2.1. Capacity building for local government officials

Strategic Planning Training In June 2017, PULSE launched the annual training cycle on preparing strategies for the development of territorial communities. 67 communities (from 22 oblasts) were for the participation in the training. Each community is represented by two participants including a local government official responsible for community development and a representative of the local public organisation. The communities were divided into three groups and trainers work with them. І. Group of Volyn Resource Center – CTC representatives. ІІ. The PPV Knowledge Networks Group - representatives of oblast significance cities.

57 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project ІІІ. The ЦНД Group - representatives of CTCs. During the reporting period, the Project organised second training sessions in all the three groups. On November 16 – 17, the Project organised a training session two groups in Kyiv:  The PPV Group has studied the concept of the community vision and community mission, and used a hands-on exercise to identify them for their communities. Also, the agenda included a discussion the role of stakeholders in developing strategies and establishing communication with them. The last topic of this session covered the development priorities and strategic goals, as well as their definition.  The ЦНД Group studied the topic of the strategic vision and mission of consolidated territorial communities. The program of the training also included the summary the SWOT analysis by sector in the communities and the hands-on work to identify the development goals in the relevant sectors using the SWOT analysis. On November 23 - 24, the Project organised a training session for the Volyn Resource Center in Lviv. In the course of the training:  the participants presented the information about the preparation of their own community development strategies based on their homework.  the trainers told about the importance of high quality diagnosis of the current status of community development and the influence of this factor on the quality of the development of the strategy and emphasised the need for active involvement of local entrepreneurs in the working group and taking into account the opinions of employers. The participants learned the skills in identifying strategic development goals for their communities and preparing technical assignments for the implementation plan. The experts provided recommendations how to make a high quality description of the technical tasks for local development. The third training session for all the three groups was scheduled for February 2018.

In the reporting quarter, the Project did not conduct Project Management Schools as they were not envisioned in the 2017-2018 work plan.

2.2.2. Promotion of access to resources

Over the reporting period, the Project did not conduct any activities under this component.

ER 3: Capacity of stakeholders increased

Context Decentralisation reforms continue, communities benefit from fiscal decentralisation, master increased resources and learn to fulfill new powers and functions. Since January 2017, 366 united communities have direct inter-budget relations and live according to the new rules. In April, initial elections took place in 47 CTCs, with 201 communities on October 29 and on 54 CTCs on December 24. Thus, at the beginning of 2018, there will be 665 united territorial communities in Ukraine. According to the Law on the National Budget for 2018, all of them will have direct inter-budget relations. Therefore, promoting the successes and best practices of CTCs in the information space will be the key task for the Project. This will help the new consolidated territorial communities to learn from real examples of transformation and improvement of the quality of life due to consolidation. At the same time, other communities will have proper motivation and incentives to consolidate as well. PULSE Project has covered the activities of direct participants in the process of transformation – reform stakeholders at all levels including: government officials, local government officials, including consolidated territorial communities, media workers, and the public. The Project carries out a complex of various educational and professional activities for local governments, facilitate their ability to perform new powers, teach work in new conditions of decentralization and advance their achievements. For state officials and parliamentarians, conclusions are drawn up for draft regulatory and legal documents, the problems of local governments are summarized and proposals for their solutions are provided. At the same time, PULSE Project provides central executives with communication channels to disseminate massages about the state policy to push the reform. For example, the most important event of the

58 October – December, 2017 Eighth quarter of Project implementation reporting quarter, in this sense, was the National Press Club of Reforms. This is a traditional PULSE Project event for regional journalists where Prime Minister Groisman made his remarks as the key note speaker. For the media, the communications component of the Project prepares and distributes press-releases and hot- press releases, and holds press events at the regional level. Mass messages are distributed to the general public through various media, print and online media, and social networks. In particular, the PULSE Project is implementing a TV Project to provide highlights about the CTC successes and AUC official position for a wide audience. The Project continues its activities to form a favourable environment for decentralisation reforms in the regions. All AUC Regional Offices work together with PULSE regional consultants in four areas, such as local finance, legal issues, local economic development, and communications. AUC Regional Offices work as think tanks for changes in regions. They are engaged in the activities to promote the decentralisation reform and its results including information points on decentralisation in communities, “Itinerary of Successes” study tours to successful communities in their or neighbouring oblasts, and press tours for regional media. To provide the communications support of this activity, the Project continued the Decentralisation Marathon account in the Facebook networks where communications consultants post information about community events, best practices and other thematic materials. This resource highlights the information about press tours, regional success stories, information points, as well as about events in communities. PULSE Project has been active in promoting decentralisation successes and community consolidation in the AUC web site Successes section and the Videoteque of Successes on the AUC YouTube channel. The Project does this in cooperation with 24 regional communication consultants.

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

Distance learning courses

The reporting quarter marked the end of the active phase of the implementation of the Setting up Local Economic Development Institutions course on the Prometheus on-line platform. The active phase means the time when the course was first implemented on the platform. At this time, students could study materials, watch video materials, ask questions to teachers in the forum, and perform practical assignments. The authors of the course reviewed these practical assignments and put their marks for them. Also, the students of the course took tests. After the first certificates for successful completion of the program were generated for the first time in November, the course went into another phase: the materials, videos, tests and the possibility to get a certificate are now available to the students on a permanent basis at any time, but there is no opportunity to receive answers from the authors of the course in the forum. Also, the practical assignments are not evaluated.

In addition to this, the www.prometheus.org.ua site continued two courses of the PULSE Project prepared during Project Year Two. Since the course materials and the ability to obtain a certificate are available on a permanent basis, the number of students has increased (on average, they grow by 300-500 persons a quarter).

In the reporting quarter, the PULSE Project information was disseminated on the AUC website, on the AUC page in Facebook, as well as during the information fair for Resource Projects for Communities on November 14, 2017 held in Kyiv, which was attended by more than 300 representatives of local governments, as well as during the All-Ukrainian Local Government Tutorial on December 19, 2017.

As of January 15, 2018, the statistics for all the courses is as follows:

The Preparation and Implementation of Community Development Projects course Total number of users: 3,564 (as of October 2017, it was 3,171) Certificates generated: 539 (15.1%) (as of October 2017, it was 495 (15.60%)

59 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The Effective Budget Process in Local Governments course Total number of users: 2,022 (as of October 2017, it was 1,798) Certificates generated: 604 (30.0%) (as of October 2017, it was 565 (31.40%))

The Setting up Local Economic Development Institutions course Total number of users: 1,235 (as of October 2017, it was 872) Certificates generated: 127 (10.4%)

The statistics shows very high rate of performance, because world wide a good indicator of the effectiveness of on-line courses is considered to be 7% of the students who received certificates of the total number of those for registered for the course. All in all, 6,821 persons participated in all training courses, with 1,270 persons receiving their certificates. At the beginning of the project, it was originally planned to prepare two courses on the same topic: one for local governments and the other one for citizens who consume services. In the course of the preparation of the above courses, the authors decided that there was no need to develop separate courses on these topics, since the topics were universal. In the course of the preparation of the courses, the authors took into account the fact that these courses will be taken by representatives of local governments, as well as by other citizens. In other words, we can state that the PULSE Project prepared 6 distance learning courses.

Sectoral legislation drafting laboratories

On October 12-13, 2018, the PULSE Project conducted a sectoral legislation drafting and advocacy laboratory in the Verkhovna Rada of Ukraine for local government specialists working in the sphere of housing and municipal utility services. 22 representatives of municipalities from 12 regions of Ukraine participated in the event. O. Harnyk, expert of the AUC Center for Analysis and Legislation Drafting moderated the event. The first day of the event was dedicated to the presentation of representatives of the Secretariat of the Verkhovna Rada of Ukraine and other departments who told the participants about the mechanisms for the preparation and approval regulatory acts of the Verkhovna Rada of Ukraine. They also studied the peculiarities of navigating and elaborating draft laws during their preparation for the second reading. A separate part of the event was dedicated to the peculiarities of preparation and approval of regulatory acts by local governments. The training event also focused on typical mistakes taking place during this process. The issues on the agenda gave rise to a lively discussion between the participants of the workshop and the trainers. On the second day of the workshop, its participants visited the Kyiv Energy Efficiency Center, where the shared their hands-on experience working with new energy efficiency technologies. The staff of the Center also spoke about its practical benefits in various sectors of local government activities. In addition, on the second day of the workshop, the participants attended presentations of AUC specialists about the mechanisms to lobby interests of territorial communities in drafting legislative acts and in other aspects of law drafting activities.

On November 02 - 03, 2017, the PULSE Project conducted a sectoral legislation drafting and advocacy laboratory in the Verkhovna Rada of Ukraine for local government officials on local economic development. Co-organizers of the workshop were the Secretariat of the Verkhovna Rada of Ukraine and the Executive Board of the AUC. 29 local government representatives participated in the event. On the first day the participants of the workshop became familiar with the legislative procedure and rules of drafting normative legal acts, as well as studied the algorithm for the evaluation of draft laws. The lectures on these issues were prepared by representatives of the Main Legal Department and the Main Scientific and Expert Department of the Verkhovna Rada of Ukraine. During the round table discussion they touched upon the main problems of the sector. Representatives of secretariats of Committees of the Verkhovna Rada of Ukraine on Economic policy, Industrial Policy and Entrepreneurship, Ministry of Economic Development and Trade of Ukraine, Ministry of Regional Development, Construction, Housing and Municipal Utilities of Ukraine, Anti-Monopoly Committee of Ukraine, State Regulatory Service of Ukraine, departments of the Kyiv City State Administration, and Association of Ukrainian Cities participated in the discussion. The second day of the workshop was dedicated to studying the experience of the Department of Economy and Investments of the Kyiv City State Administration. During the dialogue the participants received

60 October – December, 2017 Eighth quarter of Project implementation exhaustive answers to all their questions. Later on, the workshop participants attended lectures about how to draft laws, principles and means of lobbying corporate interests of territorial communities in the law making process, as well as became familiar with the structure and content of the AUC website, and, in particular, its sectoral platforms. At the end of the event, the students exchanged views on what they learned and received certificates.

On December 14 - 15, 2018, the Project organised a two-day workshop on sectoral legislation drafting for local government officials in the Verkhovna Rada of Ukraine on local finance management. Mayors and deputy mayors, heads of executive agencies of city councils, representatives of consolidated territorial communities became familiar with the legislative procedure during their studies in the parliament. Oleksandr Martynenko, Deputy Head of the Secretariat of the Verkhovna Rada of Ukraine, opened the event.

The event participants of the event (28 persons) became familiar with the principles of legislation drafting and legislative process, rules for drafting laws and the requirements of legislative technique, and the basic principles of drafting local government ordinances. The high level professional consultations on these issues were provided by the staff of the Main Legal Department of the Verkhovna Rada of Ukraine, and the Verkhovna Rada Institute for Legislation.

The round table was started with the presentation on the protection of the right to information at the information and legislation center. During a lively discussion, the staff of the secretariats of the Verkhovna Rada of Ukraine Budget Committee, Committee on Taxation and Customs Policy, Ministry of Finance, Ministry of Regional Development, Construction, Housing and Municipal Utilities discussed the current problem issues in sphere of local finance and possible ways of to resolve them. Together with the staff of the Main Legal and Scientific and Expert Departments of the Verkhovna Rada of Ukraine and the Institute for Legislation of the Verkhovna Rada, the workshop participants discussed the main stages of the legislative process, rules for drafting laws and the requirements of legislative technique, peculiarities of expert examination of draft laws, the basic principles of drafting local government ordinances, as well as other important issues. During the workshop, the local government participants engaged in the experience exchange. The participants of the workshop also took a sightseeing tour of the session hall of the Verkhovna Rada of Ukraine (5 Hrushevskyi St.) and became familiar with the work of the National Bank of Ukraine.

Regional legislation application laboratories in AUC ROs

Regional legislation application laboratories are one-day training events for local government officials conducted by PULSE in AUC Regional Offices. The purpose of these events is to study and receive clarifications on new provisions in laws and current legislation, as well as to provide opportunities for experience exchange. During 2017, the PULSE Project is planning to conduct 6 legislation application laboratories in each AUC regional office (including 2 legislation application laboratories for CTCs). In October – December of 2017 the Project conducted 62 legislation application laboratories, with the participation of more than 1,686 local government officials including 650 males and 1,036 females.

The details of these events are provided in Annex B.

3.1.2. Training of local government officials of the oblast and rayons levels

In the reporting quarter, the Project cooperated with the Ukrainian Association of Rayon and Oblast Councils (UAROC) within the framework of two sub-agreements. Working within the framework Sub-Agreement # 30 of February 17, 2017, in October – November, the Project conducted four expert workshops for representatives of rayon and oblast councils on the peculiarities of the establishment of territorial communities in oblasts in the context of decentralisation. 92 persons including 56 males and 37 females attended the events.

On December 01, 2017, a new sub-agreement was concluded, whereby in December 2017 three expert workshops were conducted for representatives of rayon and oblast councils on decentralisation as the foundation for the establishment of an effective system of governance. 57 persons including 29 males and 28 females attended the event.

61 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

All in all, in the reporting quarter, the Project conducted 7 specialised workshops. 149 persons including 85 males and 65 females took the training.

The detailed information about the expert workshops for representatives of rayon and oblast councils on the peculiarities of the establishment of territorial communities in the context of decentralisation is provided in Annex C.

3.1.3. Training NGO representatives and librarians as communicators of reforms

In the reporting quarter, IREX, a PULSE Project sub-partner, successfully continued the implementation of the Project. The IREX team actively supported grantees of the second cohort of pilot communities, in other words the partnerships between libraries and non-governmental organisations to conduct information events in communities.

Support of grantees of the second Project round to conduct public participation events

x The IREX team gave 18 small grants to representatives of pilot libraries and non-governmental organisations from 27 consolidated communities or communities in the process of consolidation. Due to some problems with the bank account, the Pischanska CTC of the Poltava oblast will receive the grant funds as of January 2018. This is the 28th community, which became part of the second cohort of grantees. x The IREX team provided the following support for grant activities: information materials were provided, consultations on the form and methods of holding events conducted, and support in the preparation of grant documentation and support in communications with the AUC Reform Offices provided; x The IREX team conducted 102 public awareness and participation events, with the participation of 2,478 persons with different backgrounds and representatives of various institutions. 18 consultants from AUC Reform Offices participated in events in 15 communities to provide additional professional consultations; x 19 media representatives attended public awareness and participation events; x The IREX team conducted 8 monitoring visits to public awareness events were carried out. In addition to supporting the organisation of information events and monitoring their implementation, these visits helped to identify potential RSG participants in communities.

3.1.4. Capacity building of non-government stakeholders (in partnership with IREX)

In the reporting quarter, the IREX team worked both with the Reform Support Groups (RSG) of the first cohort of pilot communities and contributed to the formation of RSG in the second cohort of pilot communities.

● The IREX team conducted coordination meetings with 96 RSG members in 15 communities; ● The IREX team prepared a technical description of the RSG activity and its expected results; ● The IREX team prepared the card index of RSG with the information about its participants (contact information, age, position, photo), capacity assessment, main priorities and community tasks.

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

PULSE Project offers for representatives of central government agencies communication channels to deliver important messages about the position, plans and intentions of the government in implementation of the decentralisation reform. It is very important to have this position delivered and heard by the proper audience ranging from media representatives to local government officials and citizens.

Representatives of central government authorities who are at the head of the management structure set the tone and direction of reforms in the country. At the same time, they do not always actively use the available dialogue tools to ensure citizen participation in decision making. To fill this gap, PULSE provided

62 October – December, 2017 Eighth quarter of Project implementation representatives of central government authorities with communication channels to disseminate important messages about the position, plans and intentions of the government in implementation of the decentralisation reform. This was done so to keep citizens informed about what changes they should expect.

PULSE made use of the traditional instruments to communicate with the targeted audience and to disseminate the important information, namely: placing news and developments on its web-site. The Project is engaged in the regular monitoring of the information environment, whereas its site features the most important activities of central government authorities and published central government decisions forming up the state policy in the critical local government areas PULSE is engaged in.

Various events conducted by the PULSE Project with the participation of the government authorities serve as communications channels to deliver ‘firsthand’ massages about the government policy. The Project activities are mass media representatives and invited to them. Thus, high level government officials have a good opportunity to talk to journalists, provide comments to the media, explain the position of a government agency and government policy. In addition, the materials about PULSE events that were prepared by media representatives and PULSE informational products further disseminated messages from central state executive authorities.

The Dialogue Day with the parliament, which took place on November 14 in Kyiv, was an effective tool to communicate the national government policy on decentralisation “straight form the source” to citizens. The event was attended by Prime Minister V. Groisman, National Deputy of Ukraine, and members of the Cabinet of Ministers. The event participants discussed key issues of local self-governance. In particular, the participants discussed the need to take into account community interests in the National Budget for 2018 and the legislative support for the local government reform. Representatives of the central and regional media who were present at the event informed the general public about the central government position on the legislative changes aimed at strengthening the capacity of the territorial communities.

The National Press Club for Decentralisation was another important event held on December 11 - 12 in Kyiv. It was focused on the outcomes and achievements of 2017 and tasks for the next year. The AUC traditionally conducts this event for regional mass media at the end of the year. Prime Minister V. Groisman attended the event and spoke to 120 regional journalists, with his messages being disseminated in more than 1,150 publications in regional media.

Sectoral local government forums have enjoyed wide coverage in the media. These events have become national platforms to discuss further steps for sectoral decentralisation. Thus, on November 06 - 07, the Project conducted a forum to discuss financing and reforms in the social sector: public education, health care, and social protection; on November 08 – 09, the Project conducted a forum to discuss financing and reforms in the sectors of housing and municipal utilities, land resources, and communal property, local finance and economic development.

The All-Ukrainian tutorial on local self-governance conducted in the web format on December 19 became a step to promote the national policy on local government reform and decentralisation, reforms in the public education sector, and the implementation of the concept of the New Ukrainian School. The lesson was conducted by H. Zubko, Vice Prime Minister and Minister of Regional Development, Construction, Housing and Municipal Utilities, P. Khobzei, Deputy Minister of Education and Science, and O. Slobozhan, Executive Director of the AUC. 600 students from all over Ukraine joined the tutorial by viewing it the on- line.

3.2.2. Strategic messaging through different media

One of the key aspects in strategic message delivery is the coverage of all spectrum of media outlets, because they are targeted a various types of audiences. The PULSE Project, being aware of modern communication trends, makes good use of social networks, which are popular, first of all, with young people (aged of 14 to 35 years old). It is of critical importance to explain to young people the benefits of decentralisation, because in the nearest future they will be the audience to use its benefits and will live in the environment with the principles laid today.

In addition to social networks, PULSE communications experts focus their efforts on disseminating messages through Internet-based media currently on the rise in Ukraine with their target audiences constantly

63 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project growing (currently, 21.6 million of Ukrainians use the Internet) and with good chances to become the leading media outlet in the future. This is the global tendency, which becoming more and more pronounced in Ukraine by the day. One should mention that on-line resources remain the most responsive and interactive media tool.

At the same time, television enjoys the widest coverage and, as a rule, remains the most effective tool in disseminating the needed information. PULSE having taken this fact into consideration ensures the participation of Project experts in the air of a wide spectrum of TV channels delivering the messages representing the core Project ideas to their audiences (first of all, medium-aged citizens). In this reporting period, PULSE started a TV Project on four nation-wide media and broadcasts products of different formats (news stories, guests in studios, morning programs). Thanks to such approach, the Project ensures communication with various audiences who receive information about the purpose and results of the decentralisation reform.

Thanks to the printed media, PULSE an opportunity to draw the attention of elderly persons to the necessity of implementing the local government reform. The Project focuses the attention on the irreversible nature and necessity of such changes. The Project provides illustrative examples of the existing changes for the better and by combining comparison and synthesis gives Projections of the potential benefits of decentralisation reforms in the future.

To ensure the permanent access of media representatives to the most up-to-date information about the implementation of the decentralisation reform, the Project web-site offers news headlines, which are updated on a daily basis. This is a so-called information bank, which serves very often as a source of information for journalists and local government representatives. In addition, The Project web-site offers a special section where visitors can find contacts for the communications manager, list of Project speakers assigned to specific local government sectors they comment on, as well as press releases and press announcements.

At the central level:

Events and products for media

National Press Club for Reforms for Regional Media

The National Press Club for Reforms is an effective information dissemination tool. During the meetings of the Press Club, regional journalists have the opportunity to talk directly to representatives of central government authorities, the Verkhovna Rada, and experts and to receive unique information “straight form the source”. As a result of the press club work, they publish numerous materials and articles in local printed and electronic media, on radio and television. On December 11 - 12, the Association of Ukrainian Cities conducted the National Press Club for Reforms under the title “Decentralisation: Results and Achievements of 2017 and Tasks for the Next Year”, which was attended by representatives of about 120 media from all regions of Ukraine including television, radio, and printed and Internet media. Prime Minister of Ukraine V. Groisman was the key note speaker. He presented the priorities for the Cabinet of Ministers and stressed that they were backed up by the timely adopted National Budget for 2018. Then the work of the event continued in the format of a press conference where the Prime Minister answered questions form the journalists. Also, the representatives of the regional media had an opportunity to talk to AUC Chairman and Kyiv City Mayor V. Klychko. He spoke about the draft laws needed to be approved for further development of local self-governance. O. Slobozhan, Executive Director of the AUC, informed the audience about the main indicators of the National Budget for 2018. O. Prodan, National Deputy and Representative of the AUC Chairman in the Verkhovna Rada, spoke about the role of the AUC in the legislative process. O. Harnyk, AUC expert delivered a presentation on the reform in the sector of housing and municipal utilities and the new law “On Housing and Municipal Utility Services”. L. Mozhova, AUC expert, presented the new provisions of the law “On Education”. In addition to this, a representative of the Cabinet of Ministers presented the Cabinet of Ministers One Voice Communication Strategy to the representatives of regional media. National Deputy V. Denysenko and State Secretary of the Cabinet of Ministers V. Bondarenko spoke to the representatives of regional media in the Cabinet of Ministers press center.

64 October – December, 2017 Eighth quarter of Project implementation Based on the discussions during the National Press Club for Reforms, the journalists form the wide pool of media, disseminated messages about the national, local government reform and decentralisation, and sectoral reforms.

Press news The Project prepares and disseminates regular press news to media representatives and, in case this is needed, does the express information delivery within the framework of the “Hot Topic” component. The mailing list put together during the previous years and is being constantly updated and verified. Therefore, as of today, the total number of items in PULSE mailing lists constitutes reaches more than 300. During the reporting period, the reporting period, the Project disseminated 13 press news releases and 14 “hot news” updates:

- October 06 - the draft law on state oversight of local government acts was withdrawn; - October 12 – the Association of Ukrainian Cities sent to the line parliamentary committee its proposals to the draft National Budget for 2018; - November 06 – the AUC appealed to the Chairman of the Verkhovna Rada wit a request to support the draft laws that will promote the local self-governance and decentralisation; - November 16 - Volodymyr Groisman: “We are switching to a completely different level of interrelations between local governments and the central government today” (+ VIDEO); and - December 08 - the Association of Ukrainian Cities welcomes the approval of the Law on the National Budget for 2018.

Coverage of AUC activities and PULSE in media Radio coverage PULSE Project experts participated in 2 radio programs: October 09 - AUC Executive Director O. Slobozhan provided comments on the situation with the provision of privileges for housing and municipal utility services on the «Голос столиці» [voice of the capital] Radio Station. December 16 - Director of the AUC Center for Analysis and Legislation Drafting V. Parkhomenko provided comments on the implementation of the local government reform on the «Голос столиці» Radio Station.

TV coverage The AUC activities were aired by 7 TV programs on the following channels: October 05 - AUC expert L. Mozhova provided comments on the approval of the new Law “On Education” for the «Єдина країна» [united country] TV program of the Zhytomyr section of the National Public TV and Radio Company (NPTRC). November 09 - AUC expert L. Mozhova provided comments on new provisions in the Law “On Education” in the «Час можливостей» [time for opportunity] on the Channel 5 TV Channel. November 13 - AUC expert L. Mozhova provided comments on the approval of the new Law “On Education” on the UA:СУМИ TV channel (Sumy Regional Directorate of the NTRC). December 07 - O. Slobozhan, Executive Director of the AUC, participated in the Київ-LIVE program on the «Київ» TV channel. December 11 - AUC expert L. Mozhova provided comments on the concept of the New Ukrainian School to the Lviv Television and Radio Company. December 15 - O. Harnyk, AUC expert, provided comments on the approval of the Law “On Housing and Municipal Utility Services” on the ZIK TV channel. December 18 - N. Mykolyuk, AUC expert, provided comments on the monetisation of privileges to the «Гроші» [money] program on the 1+1 TV Channel.

Printed and electronic media Interviews and comments of PULSE experts on decentralisation reforms were published in more than 60 publications in printed media and Internet resources. In particular, the article of the Executive Director of the AUC Oleksandr Slobozhan “Budget-2018 as Another Challenge for Local Self-Governance” in the Mirror Weekly, which highlighted the comments and proposals of the AUC to the draft National Budget of Ukraine, was republished in the regional media of 16 oblasts with the help of PULSE regional consultants. The article by AUC expert I. Onyschuk “Budget-2018: the public education sector ion communities lacks 13.3 billion UAH, with 7 billion UAH lacking for health care”, which highlights the problem of insufficient

65 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project funds envisioned in the draft National Budget for the implementation of powers delegated by the central government to local governments, was disseminated to more than 20 regional media. The printed and electronic media widely distributed the article of AUC expert O. Harnyk “What rules will guide the provision housing and municipal utility services”, which analysed the new version of the law “On Housing and Municipal Utility Services”. The article by AUC experts O. Harnyk and N. Mykolyuk “AUC experts: what prevents the introduction of the e-ticket in cities”, which raised the issue of the introduction of an automated payment system for fares in urban public passenger transportation system, was published in printed and Internet media in 14 oblasts. Altogether during the reporting quarter, there were more than 500 mentioning of the AUC in media and on web sites of central government authorities and city councils. Those who wrote about the Association included such authoritative media as the «Урядовий кур’єр» [government courier], «Голос України» [voice of Ukraine], and «Дзеркало тижня» [mirror weekly] newspapers, the «Економічна правда» [economic truth] Internet publication, the ICTV TV Channel, -Ukraine, UNIAN, UKRINFORM and others. For example, a meeting of the National Press Club for Reforms ”Decentralisation: results and achievements of 2017, tasks for the next year”, which took place on December 11 - 12 in Kyiv with the participation of Prime Minister of Ukraine V. Groisman was widely covered by regional media. In particular, the media focused on the issues that were discussed at the event including Cabinet of Ministers priorities for 2018, reflection of local government interests in the National Budget for 2018, implementation of sectoral reforms, and others. Following the National Press Club for Reforms, regional mass media in all regions of Ukraine published more than 150 materials. The Dialogue Day with the Parliament conducted on November 14 in Kyiv with the participation of Prime Minister V. Groisman, National Deputies of Ukraine and members of the Cabinet of Ministers drew a lot of attention from media. In particular, the question reflecting interests of communities in the National Budget for 2018, legislative support for the local government reform was covered in more than 40 central and regional media. TV Project

The AUC working under PULSE is implementing a PULSE OF REFORMS TV Project in cooperation with a media agency. The main purpose of the Project is to ensure media support for decentralisation processes in Ukraine, demonstrate advantages and first tangible outcomes of the reforms using the examples of successful communities, and to form up a good image of reforms and garner support for decentralisation reforms from the public at large. The new TV Project started in November of 2017 and represents a logical continuation of the Project implemented in 2016. To be able to cover the widest audience possible, the TV products are being aired by various channels targeting different audiences and formats and broadcasting their programs during prime time:  on the Channel 5, 112, ПРЯМИЙ [direct], and ТРК Київ TV Channels in the news section about the successes of consolidated territorial communities or about PULSE Project activities;  on the ICTV TV Channel there are programs with studio guest interviews or video stories about the life in communities;  on the NewsOne TV Channel there are live comments of guests or recorded interviews of experts

Over the reporting period 20 programs were aired: 13 news stories about successes of consolidated communities, 5 news programs about PULSE Project events, and 2 studio guest programs with the participation of Oleksandr Slobozhan, Executive Director of the AUC. November The ICTV TV Channel November 08 – a news story about the successes of Serhiivska CTC of the Poltava oblast, in particular, about repairs of roads, equipping of school classes with modern equipment and development of health care in the community. November 14 – a news story about the successes of the Olevska CTC of the Zhytomyr oblast, in particular, about the development of infrastructure and repairs of roads. The Channel 5 TV Channel November 20 – a news story All-Hands Meeting and the Dialogue Day with the Parliament conducted by the Association of Ukrainian Cities on November 14 in Kyiv.

66 October – December, 2017 Eighth quarter of Project implementation November 23 – a news story about the successes of the Vakulivska CTC of the Dnipropetrovsk region, in particular, about water supply in the villages within the community, repairs of kindergartens, schools and the construction of playgrounds. The Channel 112 TV Channel November 10 – a news story about sectoral forums conducted by the Association of Ukrainian Cities on November 06 - 07 and 08 - 09 in Kyiv. November 21 – a news story about a study tour within the framework of the “Itinerary of Successes” nation- wide Project component to Vinnytsya to study the experience of implementing the reform of public transportation. The Kyiv TVRC November 17 – a news story about the successes of the Velykokopanivska CTC of the , in particular, about the development of the health care sector and opening and equipping of a health care center. November 28 – a news story about the successes of the Medzhybizka CTC of the Ivano-Frankivsk oblast, in particular, about the construction of a modern sports school and new playgrounds. The ПРЯМИЙ TV Channel November 03 – a news story about the successes of the Pidloztsivska CTC of the Rivne oblast, in particular, about the repairs and modernisation of heating systems in schools and kindergartens within the community. The NewsOne TV Channel November 15 – a live broadcast with the participation of Oleksandr Slobozhan, Executive Director of the AUC, in the Morning NewsOne Program where he spoke about the outcomes of the Dialogue Day with the parliament.

December The ICTV TV Channel December 06 – a news story about the successes of the Pokrovska CTC of the region, in particular, about the reconstruction of a children and youth sports school and repairs of educational institutions. December 19 – a news story about the successes of the Halytsynivska CTC of the Mykolaiv oblast, in particular, about the establishment of the hospital district, repairs of the first aid station, and the provision of health care services to community members. The Channel 5 TV Channel December 12 – a news story about the successes of the Koryukivska CTC of the , in particular, about the purchase by the community of machinery for road works, road repairs and thermal insulation of the village school. December 15 – a news story about the National Press-Club for Reforms, conducted by the PULSE Project on December 11-12 in Kyiv for 100 regional journalists. The Channel 112 TV Channel December 20 – a news story about the study tour within the framework of the “Itinerary of Successes” nation-wide Project component to Cherkasy to study “Investment Policy as a Prerequisite for Community Development”. December 28 – a news story about the successes of the Koryukivska CTC of the Chernihiv oblast, in particular, about the purchase by the community machinery for road works, repairs of roads and thermal insulation of rural schools. The Kyiv TRK December 08 – a news story about the successes of the Dolynska CTC of the Zaporizzhya oblast, in particular, about the repairs of the first aid station, opening of a dentist's office, renovation of the school and the house of culture. December 27 – a news story about the successes of the Vashkivetska CTC of the Chernivtsi region, in particular, about the infrastructure development, street lighting, and road repairs. The ПРЯМИЙ TV Channel December 22 – a news story about the successes of the Bobrynetska CTC of the Kirovohrad oblast, in particular, about the introduction of energy efficient projects. The NewsOne TV Channel December 26 – a live broadcast with the participation of Oleksandr Slobozhan, Executive Director of the AUC, who spoke the approval of a new law on the reforms in the sector of parking.

Web site and social networks

67 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The AUC web-site www.auc.org.ua is an important instrument to disseminate information to the public at large about the activities of the AUC and, in particular, about PULSE. This Internet resource has become a recognised source of trustworthy information about the current status of local self-governance and life in territorial communities, as well as professional and specialised expert information in the sphere of local self- governance, decentralisation reforms and consolidation of territorial communities. The AUC web page that was completely upgraded and modernised in September last year is being constantly updated. According to the feedback from users, it is convenient and informative. In particular, they say that the user interface of the site by intuition is easy to understand, consistent and logical. While going to the main page a visitor sees the news highlights (10 publications), 5 top news, interactive sections and the tools, which reflect the multi-faceted activities of the Project. The Top News section catches the eye at once. It places most important, “hot” and significant news of the Project. The news highlights on the main page publish information about the following:

x preparation of draft laws by PULSE experts and support for their approval in the parliament; x cooperation with parliamentary Committees (providing recommendations, proposals, comments, support or elaboration of draft legislation); x appeals to high level central government authorities on key problem issues local governments face and support to decentralisation reforms; x participation of PULSE experts in public events and comments to media; x coverage of PULSE activities and events; x coverage of activities and events of PULSE regional consultants; x news from CTCs and their successes; x providing clarifications to local governments prepared by AUC Center for Analysis and Legislation Drafting; and, x coverage of main news and developments in the sphere of local self-governance and decentralisation, opportunities for development and capacity building of city representatives, etc.

The site offers one important section called “Decentralisation”, which offers a link to one of the 10 thematic platforms. The platforms are dedicated to the areas of sectoral reforms where the PULSE Project works. With their help users can learn about the details of the sectoral reforms (“Discuss with a Colleague” tool) and get expert assistance and consultations (“Put a Question to the Expert” tool). Visitors can submit a proposal to the current legislation or suggest a new draft law in the “Laws” section. The interactive “Fair of Ideas” and “E-Petitions” sections are also available on the web site. The special section "Successes" tells the visitor about the achievements and achievements that the community has received as a result of fiscal decentralisation and association. The publications are placed in the section of the library, video and photo galleries are conducted. A separate section called “Successes” tells visitors about the achievements and successes communities received after fiscal decentralisation and community consolidation. The publications offer video and photo galleries in the library section.

At the same time, the AUC web page remains a trustworthy and unbiased source of information about local self-governance in Ukraine, the decentralisation and sectoral reforms, and problems and achievements of cities. The Project web-site also offers links to social media pages (Facebook and YouTube), which are also used by the Project to disseminate information about decentralisation and local government reform and important Project news.

The Facebook page The Facebook page of the Association serves as a powerful tool to popularise the topic of the local government reform and progress in decentralisation and inform about AUC and PULSE activities. Social network pages are one of important information dissemination channels allowing not only to present events, products, materials, expert information and news, but also to receive feedback from the Internet audience and to disseminate “hot news”. One should mention the increasing interests to the Facebook AUC page. The growth in the number of new “readers” was particularly active after Project events and publication of its new products. Over he reporting period, the number of Facebook page subscribers grew from 5,358 to 6,388.

68 October – December, 2017 Eighth quarter of Project implementation User coverage per calendar day is an important AUC popularity indicator in the Facebook. This indicator varied within the range of 6 thousand, with the maximum indicator during the reporting period being: - October 09 - 20,016 users, the Project published the information about the National Budget for 2018 as Another Challenge for local governments; - October 12 – 19,733 users, the Project published the information about how the Association of Ukrainian Cities submitted to the line parliamentary Committee its proposals to the draft National Budget for 2018; and, - October 27 – 17,588 users, the Project published the information about how communities consolidate for more effective management of financial resources and quality of services by Oleksandr Slobozhan. In general, the overall coverage of AUC posts in Facebook over the reporting quarter constituted 12,624 users, which speaks about both the increasing audience trust to the activities and news of the AUC and PULSE and to their live interest to topics related to decentralisation in general. YouTube account

The AUC YouTube account has become a widely used source of news and information about the status of local self-governance and, recently, about the progress of decentralisation reforms. Over the reporting period, the Project provided regular updates to the “Comments of AUC Experts and AUC Events” section offering important videos from media. PULSE communications experts monitor information, organise meetings of PULSE experts and TV journalists, involve experts to thematic programs, and upload the corresponding videos in the “Comments of AUC Experts” section. The AUC YouTube account provided on-line broadcasting of the All-Ukrainian tutorial on local self- governance conducted in the web format on December 19. During the reporting period, the Decentralisation and Reform Successes library received new video materials. Thanks to regional communications and reform success replication consultants who monitor local media, this section receives collections of video news about decentralisation and best practices in communities on a weekly basis. On one hand, such a collection of videos is a good source of information about the progress of reforms, and serves as an incentive for communities to use the experience of their peers, join reforms in the country, and enter into community consolidation to receive more resources and powers, on the other. In addition, in view of increased presence of AUC and PULSE on TV channels, the library opened a new section of videos (within the PULSE of Reforms activity). The PULSE of Reforms TV Project playlist include video with comments of AUC experts taken after their participation on the such TV channels as NewsOne and ICTV, as well as stories about successful communities, which are also aired by the ICTV, 112, Channel 5, «Київ» RTV and ПРЯМИЙ within the PULSE of Reforms TV Project. The AUC YouTube account has 9 video sections: “PULSE OF Reforms TV Project”, “Decentralisation and Reform Successes” (videos have been sorted by oblast), “Comments of AUC Experts”, “Association in the Media”, as well as previous collections of videos, such as “Decentralisation Marathon”, “Social Videos”, “Your Government” (selection of programs within the framework of the joint Project with the Channel 5 TV Channel), and “CITY-minded Ukraine” (selection of programs within the framework of the joint Project with the TONIS and UT-1 TV Channels). 200 network users have subscribed to AUC video news.

PULSE publications

Table 3.1. PULSE publications

Publication title Targeted audience Description The “AUC Herald” AUC member # 146, October. The PULSE of REFORMS printed monthly communities, AUC section features the materials about the meeting publication partner organisations of the Prime Minister of Ukraine with city mayors who are members of the AUC Board to discuss issues how to reflect the position of local governments in the course of the preparation of the National Budget for 2018. # 147, November. The PULSE of REFORMS section features the materials about sectoral local government forums to discuss further steps on sectoral decentralisation.

69 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project # 148, December. The PULSE of REFORMS section features the materials about outcomes of the AUC participation in the budget process to preserve the achievements of fiscal decentralisation and safeguard interests of communities. All the publications were disseminated in the printed format and posted on the web site. The “Pulse of International This is a bi-lingual weekly publication presenting Reforms” electronic organisations, PULSE activities over the past week and digest international technical featuring Project and local government news. assistance Projects, and This publication consists of two main chapters: Project partners “PULSE in action” and “Decentralisation and Sectoral Reforms: News and Developments”. The materials for this publication are prepared on Fridays, with the mailing taking place early next week. The mailing list is constantly updated. example, the Ukrainian version is sent to AUC partners, representatives of the state executive and parliamentary Committees AUC experts work with, while the English version is sent to more than 90 emails of international organisations. During the reporting period, the Project prepared 13 digests. The Book of Successes AUC member- The collection released in late November quarterly collection of municipalities and AUC contains 78 success stories in ten thematic success stories partner organisations sections including local finance, community development, health care, education, social protection, administrative services, staffing and organisational aspects, LED, community safety, housing and municipal utilities. The collection is disseminated during PULSE Project events and is posted on the AUC website.

At the local level:

• Press clubs and media events in libraries

In the reporting quarter, IREX, PULSE Project sub-partner, supported the work of all library press clubs. x 269 representatives of the current and newly established library press clubs took training at 17 specially organized workshops to strengthen the capacity of libraries as decentralisation information centers in communities. Librarians visited the training events at their own expense, which testifies to their high motivation for studying and willingness to get involved in the decentralisation process. Consultants of the AUC Office for Reforms visited 8 out of 17 training events for members of the press clubs; x Six new press clubs started working: in Ternopil, Chernivtsi, Kherson, Lviv, Kirovograd, and Mykolaiv oblasts; and, x Due to the work of press clubs, there were 136 publications in media and the Internet on the local government reform.

Cross-cutting activities x IREX published weekly news collections (news digest) and sent them to emails of representatives of library press clubs, grantees of both cohorts of pilot communities, and all members of reform support groups (RSG); x IREX continued to fill in the information for the IREX-PULSE Facebook group for representatives of libraries and non-governmental organisations (NGOs) (279 participants) who became members of the PULSE Project and RSG members. Currently, the Facebook account serves as a platform to exchange the information about the events (photos, citations, recommendations, etc.) and a source of

70 October – December, 2017 Eighth quarter of Project implementation the up-to-date information on legislation amendments and useful resources on decentralisation in Ukraine; and, x The IREX team has many success stories that demonstrate not only the interest and popularity of public participation events in the context of decentralisation in Ukraine, effective work of the library press clubs, cooperation of the regional AUC consultants with project participants, but also high level of motivation of the local population in becoming part of RSG.

The summary of quarterly results of the implementation of the IREX sub-agreement in the form of infographic is presented in Appendix D.

Dissemination of successes on local TV and radio stations and through printed media

Collecting and disseminating success stories of the local government reform and decentralisation is one of the key areas of activities of PULSE. This type of activity, as well as promoting such publications in regional media is supported by PULSE communications consultants. Thanks to their contacts with local printed media, TV channels radio stations, they prepare the corresponding informational products. Their main focus is fiscal decentralisation and, consequently, infrastructure and development Projects in communities. Over the reporting period, the main thematic focus shifted from the achievements of fiscal decentralisation and highlighting successes of consolidated territorial communities to their implementation of infrastructure and development Projects. Regional communications consultants ensure the regular presence of AUC experts, regional executive directors, budget and legal consultants, as well as mayors of consolidated territorial communities in local media (radio, TV, printed and Internet media) and often they themselves participate in radio and TV interviews and write articles and short sketches. Local media widely use analytical materials, reviews, info graphics and comments of PULSE consultants as credible, professional and authoritative views. Based on the results of the PULSE Project activities (meetings of AUC Professional Groups and regional policy dialogue platforms), its regional communications consultants convene press conferences and hold briefings to discuss topical issues of regional importance with the involvement of local public opinion leaders and experts. Local media widely use and involve and PULSE Project communications consultants in oblasts to prepare videos about promising communities in their regions. PULSE regional consultants have learned the skills in making videos and putting them together. Earlier, PULSE purchased a set of video equipment and conducted the professional training for them. Now, the consultants are able to go out to communities, conduct PULSE Project regional events, on-site consultations, informational meetings, take interviews and comments from CTC mayors and based on this prepare video stories on their own. The topics include: implementation of the decentralisation reform in the oblast, success stories from communities, participation of the AUC and PULSE Project in the implementation of reforms, etc. These stories are branded with the PULSE logo and serve as the handy material for dissemination through local TV channels, which are happy to broadcast them. In addition to this, thanks to the active work of its regional communications consultants, PULSE Project has a reliable channel to disseminate in regional media not only the successes, but also specific issues and “hot” messages about the important news in the local government sector and the position and role of the Association in these processes. The reformatted and unified web pages of all AUC Regional Offices in the Facebook network have become an important source of information about successes of communities. These web pages serve as a valuable source of information about regional news, which are used by community mayors, local government officials and local media.

Press tours for regional media

In the reporting period, the Project continued to organise press tours to successful communities for local and regional media. The main purpose of the tours is to popularise the experience of successful CTCs in local and regional media. During these site-visits, the journalists will have a chance to become familiar and actually see the successful outcomes of the formation consolidated territorial communities and have personal conversations with community leadership and citizens. Following the press tours, the journalists prepare publications in local media about successes of decentralisation. This year, every AUC RO will organise at least two press tours. In October – December of 2017, the Project conducted 12 press tours in all AUC Regional Offices, with the participation of 200 representatives of local and regional media.

Activity 3.3. Increased public awareness of reform successes and trust in local governments

71 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

3.3.1. Role of Offices for Reforms: supporting reform implementation and establishment of capable communities

Support for reform offices

During the reporting period, AUC ROs continued to house Offices for Reform Implementation Support, groups of experts consisting of regional consultants (on budget issues, on legal issues, local economic development, and on communications). The main tasks of their consultants included: - Providing consultations and legal assistance to local government officials; - Assistance in drafting local regulatory and legal documents; - Assistance in calculating budget indicators; - Assistance in preparation of development strategies and preparation of Project proposals; - Monitoring and informing communities about competition announcements and results of implemented Projects; - Motivating communities to consolidate; - Support to the community consolidation process; - Conducting information, public awareness, training and consultation activities for local government and other stakeholders, and, - Informing media about reforms.

PULSE regional consultants took part in weekly web-meetings with the participation of all staff of the AUC Executive Board and Regional Offices. The Central Office for the Decentralisation Reform provided rapid response to regional consultants on a variety of complex issues. They also summarised the most frequently asked questions and prepared written answers.

Networking activities for regional consultants

On November 09 - 10, PULSE Project conducted a seminar in Kyiv for AUC regional consultants under the title “Prospects for the implementation of decentralisation reform. Next Steps”. The event brought together executive directors of AUC Regional Offices, consultants on budget, legal issues, communications and local economic development, experts of the AUC Central Office for the Decentralisation Reform (CODR). O. Slobozhan, Executive Director of the AUC, spoke about the achievements and challenges of the decentralisation reform, outlining the tasks facing local governments. Director of the PULSE Project I. Parasyuk spoke about the Project activities in 2017. In the course of the dialogue, the participants of the workshop prepared proposals regarding Project activities for the coming year. The framework of the event included there concurrent meetings of working groups for consultants in technical spheres. With the help of the moderators, the participants in each technical CODR working group discussed the work experience of the consultants, problem issues and proposals for their solution, and activities for the next year.

Regional communications consultants perform their work in all (temporarily except for the Volyn and Kyiv oblasts) in close cooperation with the AUC Central Office for the Decentralisation Reform. The AUC Central Office Communications Coordinator regularly adjusts the focus of their activities, brings to their attention the main messages, hot news and the position of the PULSE Project and the AUC. During the reporting period, the consultants were provided with recommendations on marking and branding of PULSE Project products, technical guidance for the formulation of messages and preparation of narratives for publications on the Decentralisation Marathon Facebook account, and sharing best practices on interesting press initiatives. Monitoring, collecting and writing success stories and best community practices and feeding them into the national success story database set up within the framework of the Project remains one of the important aspects of the work of communications consultants. During the reporting period, the consultants were also advised how to improve this work, as well as the form and content of such materials. The national success story database serves as a source of information for further preparation of publications about community successes (“The Book of Success”) and as a source of information for the "Successes" section on the AUC web site, as well as is used for cooperation with central and regional media. The AUC Central Office for the Implementation of the Decentralization Reform worked closely with regional communications consultants to disseminate across Ukraine not only successes, but also “hot” messages about new legislation, local government news, and position and role of the Association in these processes. In particular, the following messages were effectively and efficiently disseminated across Ukraine

72 October – December, 2017 Eighth quarter of Project implementation during the reporting period: AUC participation in the local budget process, issues related to the reflection of local government interests, and preservation of achievements of the fiscal decentralisation and decentralisation of powers. During the reporting period, PULSE Project communications consultants participated in two networking events, such as: Workshop on November 09 – 10 and the National Press Club for Reforms on December 11 - 12.

“Itinerary of Successes” Project component

The “Itinerary of Successes” exchange study tour Project component represent one day events to expose local government officials of the communities who have started consolidation processes to best practices of already consolidated CTCs. The clear demonstration of the achievements of communities living under new rules and increasing their budgets and powers is expected to be a motivating factor for others to consolidate. The communities to pay visits to within the framework of this Project component were selected based on the monitoring performed by AUC ROs. The AUC Regional Offices also organising the visits. The topics of the study tours were identified according to the findings of the monitoring performed by AUC Regional Offices. In October - December 2017, the Project organised 21 study tours to AUC Regional Offices attended by 447 local government officials.

Decentralisation information points

Decentralisation information points are one day trips to potential CTCs organised by AUC Regional Offices to do the public awareness work directly with citizens about the essence and expected outcomes of reforms and community consolidation. In October - December 2017, the Project organised 101 decentralisation information points in all AUC Regional Offices focusing on the target audiences consisting of local citizens, activists, members of local Non-governmental organisations, and local government representatives. During these events, regional consultants cover issues related to the purpose of community consolidation, positive effects that the residents of new communities have due increased powers and budget of local governments and provide real examples of the successes of the already established CTCs in their regions.

All-Ukrainian Online Tutorial on Local Self-Governance Working within the framework of the PULSE Project, the AUC organized an All-Ukrainian tutorial on local self-governance in a web format on December 19. It was conducted by H. Zubko, Vice Prime Minister and Minister of Regional Development, Construction, Housing and Municipal Utilities of Ukraine, Deputy Minister of Education and Science P. Kobe, and AUC Executive Director O. Slobozhan. About 40 leaders of student self-government from Kyiv were invited to the America House where the tutorial was conducted. The event brought together representatives of approximately 600 educational institutions from 230 villages, towns and cities from all regions of Ukraine who joined the tutorial in the web format. H. Zubko noted that “in cooperation with line ministries, communities and associations, today we are changing the principles of governance in the country, transfer new powers and financial resources to communities, which has a direct impact on the index of human development”. According to him, these changes make open opportunities for young people to apply their innovative management ideas at the local level. P. Khobzei spoke in detail how the educational environment of Ukraine will change with the approval of the Law of Ukraine “On Education”. O. Slobozhan spoke about the youth projects the AUC participates in. In particular, he emphasised that “only when young people come to work in local governments will we be able to observe rapid changes in the country”. The AUC Executive Director supported the idea of creating a platform at the level of local governments where young people could offer their project ideas, communicate, and find supporters and partners to implemented their ideas. Background. This was already the second All-Ukrainian tutorial on local self-governance the AUC conducted in collaboration with the America House. The first one took place in December 2016 and was dedicated to the results of the decentralisation year.

3.3.2. Promotion of reform successes

73 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project A significant segment of the PULSE communication component, which is now being implemented in cooperation with 23 regional communications consultants, is to increase the PULSE impact on stimulating and motivating further consolidation of territorial communities. The communities, which consolidate receive the resources and authority oblast significance cities have and can use them for their own needs in order to improve the quality of services at the local level. The most effective tool in this work is to convince all participants in the process, and, most importantly, citizens that decentralisation will have a positive impact on the quality of their lives and to demonstrate the real successful examples of consolidated communities. According to the Ministry of Finance of Ukraine, in 2017, local budgets grew by 45.3 billion UAH (or by 31%) as compared to 2016 and amounted to 192 billion UAH. At the same time, the budgets of 366 united territorial communities (CTCs) reached 8.3 billion UAH, which is almost twice as high as the last year. Such growth is accounted by the fiscal decentralisation, while the upward trend continues. In the process of decentralisation, communities have received resources, finance, powers and significant tools and opportunities to ensure fully fledged local development. The reform provides opportunities for communities to plan and implement long-term projects that improve the quality of local infrastructure and independently manage their own revenues. Communities primarily spend their budget funds on major repairs of roads, public transportation, repairs and equipping of educational and health care establishments, opening of Centers for Administrative Services, housing construction, construction of children and sports facilities, cultural centers, restoration of water supply networks, etc. These are the things people feel in their own lives, and this is the best illustration of the success of the local government reform, fiscal decentralisation, and consolidation of territorial communities.

PULSE uses real stories to stimulate and motivate territorial communities for further consolidation, promote reform, convince all participants of the decentralisation process, and most importantly citizens, that decentralisation brings high quality of life and better access to services. It is important to inform hesitant communities and the media community of obvious benefits of decentralisation and community consolidation, about the real facts of effectiveness of these reforms for communities and their inhabitants. During the reporting period, PULSE Project disseminated success with its own means involving media and its regional consultants.

During the reporting period, the Project regularly updated the national base of successes and best practices from communities. This interactive tool provides the opportunity to track the progress of decentralisation reform nationwide, compare different oblasts, distribute the best initiatives and municipal practices, and to serve as a content resource for the promotion of reforms. The materials to the database are provided by regional communications consultants who monitor the communities and provide information by key areas of sectoral decentralisation. The national base is a handy source of information for preparation of materials for other PULSE communication channels, such as the web site, social networks, cooperation with media, as well as organisation of Project events to cover success of reforms, namely: “Itinerary of Successes” replication visits and press tours. During October - December, regional communications consultants downloaded 86 community-based materials and 132 success stories into the national database. The success stories highlight the benefits and gains of communities they have received due to fiscal decentralisation and consolidation, emphasize the increased financial resources of local budgets through decentralisation reforms, possibilities of attracting National Budget subventions and international donor funds, etc. During the reporting period, there were a large number of success stories dealing with modernisation of infrastructure in the sectors of public education and health care, implementation of community safety activities, and improvement of municipal utility and social services. Best practices illustrate how communities (those already consolidated and those not yet consolidated) implement mechanisms to effectively use the increased local budget, in particular the implementation of sustainable development projects, organisational aspects of the provision of administrative services, social protection, health care, and public education.

Every day the AUC website publishes news about best practices and successful community achievements due to decentralisation on a special Successes Section within the framework of the No Day Without an information campaign. During the reporting period, the Project prepared and published 93 materials in this section. PULSE Project also tracks and distributes video materials about the successes of the reform. The official account in the YouTube network has a separate channel where one can view all videos about successes and implementation of the reform in regions collected and grouped by oblast. During the reporting period, the Project consultants provided new materials to the Decentralisation and Successes of Reforms Video Library, as well as collected information with the help of monitoring media. The video stories footage

74 October – December, 2017 Eighth quarter of Project implementation highlights the advantages and benefits of communities they have gained thanks to consolidation. It should be mentioned that many activities and products of the PULSE Project are dedicated to the promotion of successes of the reform, such as “Itinerary of Successes” (regional and national) exchange study tours, the PULSE OF REFORMS TV Project, the “BOOK OF SUCCESS” publication, the SUCCESSES section on the AUC website, the Decentralisation Marathon Facebook account, as well as publications in local media by PULSE regional communications consultants.

Section 3. IMPLEMENTATION PROBLEMS AND BARRIERS

The systemic problem issues in the local government sectors and relevant legislative and executive bodies that were indicated in the previous (annual report), generally did not significantly change. The latent crisis with the parliamentary majority and the Verkhovna Rada in general continues to be a significant problem. The low level of responsibility of National Deputies and lack of discipline often leads to the situation when the voting does not take place or is “derailed” due to the fact that National Deputies are simple are not present in the session hall.

On a separate note, we would like to mention about a set of implementation barriers and problems related to NSSN, namely:

- absence in the parliament, central state executive authorities and local governments of a unified, common, consensus based strategic vision for reforms in the system of state social guarantees, and, accordingly, the poor quality of draft regulatory and legal documents prepared by the Cabinet of Ministers and parliament to improve the methodological, organisational and financial aspects of the provision of state guaranteed public services to citizens; - weak executive discipline in central state executive authorities with regard to the implementation of provisions of the current legislation on inventory, systematisation and revision of regulatory and legal documents in the sphere of NSSN, lack of proper control on the part of the Cabinet of Ministers; and, - inconsistency of the process of reforming NSSN, which leads to the necessity of revisiting NSSN in the course of the implementation of local budgets and makes significant complications for local governments at the local level in forecasting and planning expenditures for free services for citizens.

Issues that arose in the course of the implementation of the Sub-Agreement with IREX:

1. When concluding grant agreements, three non-governmental organisations were unable to conclude them with IREX. However, in all the three cases, representatives of libraries of these communities expressed their readiness and willingness to work independently and to continue their activities. IREX supported the activities of these libraries and provided them with the necessary mentor support and handouts, and provided them with the necessary equipment, the costs of which did not exceed the approved grant amount. The libraries that worked independently without NG were the following: a. The library in the village of Katerynopil of the Cherkassy oblast (the partner NGO submitted the documents for signing of the agreement that did not meet the requirements) b. The library of the city of Khust of the Zakarpattya oblast (NGOs did not come to a consensus with the library in the course of planning and budgeting for the project) c. The library of the city of Tyachiv of the Zakarpattya oblast (the NGO refused to cooperate as it was already engaged in another project)

2. Two teams of grantees had problems with opening of their bank accounts (RADIUS NGO of the Pischanska CTC of the Poltava oblast, and Now Is Your Time NGO of the Dunayevetska City CTC of the Khmelnytskyi oblast). As of late December, the problems have been resolved. The Dunayivtsi team carried out the activities using their own resources. The work in Pischane will start as of January 2018.

3. Delays with the delivery of information materials due to technical problems in the courier service. The delivery of a box with materials was delayed in the warehouse for 5 days and it was not delivered in time to the Vynohradivska Community. However, the event did take place, because the problem was resolved by an active librarian who used electronic resources to demonstrate the materials and printed out the handouts on her own. In the future, IREX will send information materials beforehand taking into account

75 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project potential week long shipping delays to avoid situations when moderators may stay without the supporting training materials.

Proposed solutions to new or current problems: The IREX team has encountered difficulties in providing 100% tandem cooperation between interested libraries and motivated NGOs due the failure of the latter to comply with the requirements for maintaining grant documentation in targeted communities. The IREX team reviewed application documents and conducted another round of interviews with non-governmental organisations including those excluded in the course of the pre-selection process. The team came to the conclusion that the main reasons for these failures was the poor representation of the non-governmental sector in regions, while the NGOs that worked there were often unable to provide the complete list of the required registration documents or demonstrated low project implementation capacity. These difficulties may have a negative effect on the IREX plan to support 50 communities this year, so the team offered some effective solutions to address these issues: 1. For strong regional NGOs or NGOs working with several different communities but are able to quickly and easily get to the neighbouring communities the team will offer flexible conditions for them to provide administrative support to several libraries at the same time. This approach was successfully implemented in the Veselivska and Berestivska Communities under the patronage of the Prolisok- NGO with prior approval from the AUC. 2. In those cases where there are no trusted NGOs in communities, IREX will directly support the organisation of information activities by libraries themselves. A successful result was demonstrated by the Katerynopil Central Rayon Library of the and the Tyachiv and Khust Rayon Libraries of the Zakarpattya oblast with prior approval from the AUC. In the future, IREX considers it reasonable to grant permission to additional communities (not just to those who have already taken part in the first two cohorts) to participate in the grant competition to conduct information events in decentralisation, which was scheduled for spring 2018. The new participants will learn from the current participants and the IREX team to ensure high quality arrangements for events on public participation in the decentralisation process in Ukraine. IREX will be able to count on even more significant achievements if directs about 20% of grant funds to new participants. A 20 percent loss of participants from the first two cohorts is fully acceptable based on our previous experience at the international and local levels. In addition, the involvements of new participants will incentivise new communities, expand the target audience, and motivate the rest of the participants.

Problems of Project activities

During the quarter, the PULSE Project failed to find a proper qualified candidate for the position of the health care expert. The main reason is the low level of remuneration.

Section 4. SUCCESS STORIES

BUDGET

The PULSE project preserved the achievements of fiscal decentralisation in the 2018 National Budget Thanks to its participation in the budget process from the very beginning, the AUC secured the preservation of achievements of fiscal decentralisation in the approved Law on the National Budget of Ukraine for 2018: 299 consolidated communities where elections took place in 2017 were switched to direct inter-budget relations; the National Budget envisioned a subvention for infrastructure improvements for all 665 CTCs; and the incentive formula for horizontal equalisation of local budgets was preserved. Following the active dialogue with the Cabinet of Ministers during the budget process, the Association of Ukrainian Cities managed to preserve 50 billion UAH in the National Budget for 2018.

HOUSING AND MUNICIPAL UTILITIES

The new law resolves a number of problems in the sectors of housing and municipal utilities that accumulated over the last years On November 09, 2017, the parliament approved the Law of Ukraine “On Housing and Municipal Utility Services”. PULSE Project experts participated in its preparation and elaboration during the last two years.

76 October – December, 2017 Eighth quarter of Project implementation The new law provides a better regulation of the relationships between service providers and consumers, local governments and state executive authorities. In addition, the law finally resolves the problem with the provision of building management services. Due to the persistent actions of PULSE Project experts to protect the interests of territorial communities in the course of the elaboration of the draft law:  the text of the Law retains provisions for transferring the powers to set tariffs for solid waste management services to local governments;  the text of the Law does not include the provisions on control functions in the sector of housing and municipal utilities as they are not inherent to local governments;  the law clearly defines the timeframe for monetisation of privileges and subsidies for the population.

COMMUNITY CONSOLIDATION

PULSE Project facilitated the formation of consolidated territorial communities

With the technical and methodological assistance from the PULSE Project in 2017, Ukraine got 299 consolidated territorial communities (comprising 1,373 smaller settlements) where the initial local elections took place: - April 30, the elections took place in 47 CTCs that united 232 village, town and city territorial communities; - October 29 and December 24, the elections took place in 252 consolidated territorial communities, which united 1141 village, town and city territorial communities. Thus, as of January 01, 2018, 665 united territorial communities worked in Ukraine. All of them have direct inter-budget relations with the National Budget of Ukraine. In addition, another 27 new consolidated territorial communities, which comprised 135 smaller local communities, are waiting for the decision of the Central Election Commission on scheduling of the initial local elections.

PUBLIC EDUCATION

PULSE Project experts joined the working group to develop a new version of the Law of Ukraine “On Comprehensive Secondary Education” To bring the regulatory and legislative framework in line with the Law of Ukraine “On Education”, the Ministry of Education and Science of Ukraine set up several working groups to prepare new versions of the special laws. In particular, with Directive # 1470 of November 13, 2017 the Ministry set up a working group to draft a new Law of Ukraine “On Comprehensive Secondary Education”. A PULSE Project education expert joined the group. During the reporting period, PULSE prepared the section under the title “Financial and economic relations in the sector of comprehensive secondary education” and clarified the concepts of autonomy of the comprehensive secondary education institution. In the next quarter, the Project will continue working on the draft law.

The AUC position regarding the transfer of vocational schools funded from budget of oblast center cities to communal property of these cities finally taken into account During the fourth quarter of 2017, the AUC continued to safeguard the interests of oblast center cities to manage vocational schools, as the Ministry of Education and Science of Ukraine continues to slow down the transfer of these institutions from the state ownership to communal ownership of these cities. Thus, on October 25, 2017, the Cabinet of Ministers issues Directive # 831-p “On Issues Related to Management of State-Owned Vocational Training Institutions Subordinate to the Ministry of Education and Science of Ukraine”. The document transfers the temporary functions to manage state-owned vocational schools subordinate to the Ministry of Education and Science to oblast state administrations and Kyiv City State Administration including the functions related to the operational management of property of these educational institutions and personnel policy. At the same time, oblast center cities, which finance such vocational schools, receive only the powers to appoint, encourage and hold directors of vocational schools disciplinary accountable. In addition to this, a draft law “On Transferring of the Whole Property Complexes of State-Owned Vocational Schools to the Joint Ownership of Territorial Communities of the Zhytomyr and Ivano-Frankivsk Oblasts” is being prepared for consideration by the Cabinet of Ministers. The AUC appealed to the Cabinet of Ministers with a request to take into account the fact that of these vocational schools that being prepared for the transfer 4 vocational schools are financed from the budget of the city of Ivano-Frankivsk. In view of

77 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project this, the AUC came up with a proposal to transfer these institutions to the communal ownership of the city community and not to the oblast. The Association of Ukrainian Cities received an excerpt from Minutes # 44 of the Cabinet of Ministers Committee meeting of November 30, 2017 regarding this regulation. The document refers to the approval of the draft regulation reflecting the proposals of the AUC, which were sent to the Cabinet of Ministers through Letter # 5-641 of October 31, 2017. The AUC is currently waiting for the final version, which could be an interesting precedent in favour of local self-governance.

The Cabinet of Ministers took into account the proposals of the AUC in making a decision on optimising the network of pre-school educational establishments The problem of long “waiting lines” to for pre-school establishments impedes access to high quality educational services for all children. It is particularly true for the cities where there is an increase in population. To resolve the problem, on December 06, 2017, Cabinet of Ministers approved Decree # 871-p “On Approving the Action Plan for 2017 - 2019 for the Step-by-Step Opening of the Additional Slots in Educational Establishments for School Age Children”. The document envisions opening of 96,147 slots in pre-school educational institutions by 2020 with the help of opening of new communally-owned educational institutions, reorganisation of educational establishments with pre-school units, opening of private educational institutions, reconstruction of pre-school establishments, and resuming the activities of institutions that have not been used for a long time. In preparing the Action Plan, the Cabinet of Ministers took into account the proposals from the AUC prepared by the PULSE Project.

The Cabinet of Ministers approved a new formula for the distribution of the education subvention between local budgets prepared with the participation of PULSE Project Experts On December 27, 2017, the Cabinet of Ministers approved the Resolution “On Approving the Formula for the Distribution of the Education Subvention between Local Budgets”. The formula takes into account the number of pupils, number of children with special educational needs, projected rates of teacher salaries, as well as takes into account the adjustment ratio. The Cabinet of Ministers will calculate the amount of the educational subvention for local budgets in accordance with this document. The approved formula was prepared by the working group at the Ministry of Education and Science of Ukraine, which included PULSE Project experts.

SOCIAL PROTECTION

PULSE Project prevented shifting the costs of privileged urban public transportation services to local budgets The right to free urban public transportation services for pensioners and persons with Category III disabilities at the expense of the National Budget is currently regulated by two Cabinet of Ministers Resolutions, namely: “On Free Travel for Pensioners in the Public Transportation System” # 354 of May 17, 1993 and “On Extending the Force of Resolution of the Cabinet of Ministers of Ukraine # 354 of May 17, 1993” # 555 of August 16, 1994. In the course of the preparation of the National Budget for 2018 the Ministry of Finance made two attempts to submit to meetings of the Cabinet of Ministers Committee (on November 21, 2017 and on December 05, 2017) its proposals to amend these resolutions and to make local governments finance free travel of the categories of citizens mentioned above at the expense of local budgets. Thanks to the efforts of PULSE Project experts and the arguments that the proposed changes do not comply with the current legislation and the Constitution of Ukraine, this issue was withdrawn twice from the consideration of the Cabinet of Ministers Committee both times.

PROFESSIONAL CAPACITY BUILDING

PULSE distance learning courses became most successful courses on the Prometheus platform Prime Minister V. Groisman wrote on his Facebook page: “Today, during a meeting with Ukrainian young entrepreneurs and startups, Ivan Prymachenko (co-founder of the Prometheus platform) mentioned an interesting fact: the Prometheus decentralisation training course was successfully completed by 34.5% of its registered participants, which is the world's RECORD for all public on-line courses. And it's really amazing! The idea of decentralisation, which has always been one of my priorities, already produces good results: more opportunities for community development”. The distance learning cycle on decentralisation started with three courses prepared by the AUC within the framework of the USAID PULSE Project:

78 October – December, 2017 Eighth quarter of Project implementation

 “Effective Budgeting Process in Local Governments”;  “Preparation and Implementation of Community Development Projects”; and,  “Establishment of Local Economic Development Institutions” The course prepared by another USAID partner project joined this group as the fourth training course.

URBAN STUDIES

The parliament supported new parking rules On December 21, the parliament approved a draft law on reforms in the sphere of parking (Registration # 5364), which enhances the responsibility of violators of parking rules and increases the scope of powers of local governments and police. Big cities face a huge problem with traffic slowdown due to improperly parked cars on streets. So far, local governments lacked effective tools to resolve this problem issue. With the support of PULSE Project experts, the law was revised and approved by the parliament. The practical implementation of the law will promote the development of the parking system and reduce the load on streets and road network in villages, towns and cities, as well as increase revenues to local budgets. To make the next step to distribute the collections from fines for violation of parking rules between the National Budget and local budgets (in the 50% х 50% proportion), the parliament has to approve amendments to the Budget Code, namely: Draft Law # 3585. The AUC will lobby for the approval of these amendments by the parliament.

SAFEGUARDING INTERESTS OF LOCAL GOVERNMENTS

PULSE Project prevented changes in the mechanism of horizontal equalisation of local budgets During the reporting quarter, the Ministry of Finance actively promoted the idea of changing the system of equalisation of local budgets by increasing withdrawals from local governments to the National Budget. Such provisions were envisioned at the beginning of the preparation of the draft Main Directions of the Budget Policy for 2018 – 2020. The Association of Ukrainian Cities blocked these provisions in the parliament. In the course of the preparation of the draft National Budget for 2018, the rates of the corresponding reverse subsidy were set based on the modified equalisation system, which would have led to a significant reduction in local budget revenues. At the same time, the corresponding provisions were included in the draft amendments to the Budget Code of Ukraine. PULSE Project experts actively defended the position of inappropriateness of introducing this equalisation system as proposed by the Ministry of Finance. The issue was raised during budget consultations and was recorded in the signed Minutes of the budget consultations. In addition to this, the AUC defended the position to retain the current equalisation mechanism both at the working group and during meetings of the Verkhovna Rada of Ukraine Budget Committee. A PULSE Project expert prepared a thorough Expert Opinion on the Ministry of Finance proposal, highlighted the negative consequences of such changes, demonstrated indicators of budgets at different levels, financial load on selected cities, and a number of arguments regarding the inappropriateness of changes and the benefits of the existing system. At the same time, to balance the National Budget of Ukraine and strengthen the financial capacity of local budgets, the PULSE Project expert suggested alternative changes to improve the existing system, which would ensure both the increase of National Budget revenues and the local budget revenues. In general, the proposal was well balanced and envisioned positive changes both for the National Budget and local budgets. However, given the tight timeline and the need for recalculation, as well as the lack of Cabinet of Ministers support, the proposal was not endorsed. Instead, due to the active work with the Ministry of Finance, Secretariat of the Cabinet of Ministers of Ukraine and thanks to the involvement of certain National Deputies, this issue was discussed at the meeting of the Verkhovna Rada Budget Committee and the AUC managed to preserve the existing system of horizontal equalisation.

The Project prevented the repayment of mid-term debt at the expense of local budgets During the reporting quarter, the Cabinet of Ministers Committee on Economic, Financial and Legal Policy, Development of the Fuel and Energy Complex, Infrastructure, Defence and Law Enforcement Activities made two attempts to endorse a draft CMU Resolution “On Approving the Mechanism for the Repayment of the Debt in the Mid-Term and Interest-Free Loans Provided to Local Budgets at the Expense of the Unified Treasury Account”, which foresees the compulsory writing-off of mid-term loans at the

79 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project expense of local budget own resources. Te endorsement of the draft resolution could have jeopardized the funding of a number of programs financed from local budgets. In fact, the Ministry of Finance of Ukraine tried to fill a unified treasury account at the expense of local budgets. At the same time, the draft document was not submitted for discussion and failed to take into account the potential regional impact. A PULSE Project expert prepared a thorough Expert Opinion saying the draft document lacked integrity, it was premature, and lacked detailed calculations for decision making. The expert presented a number of counterarguments and emphasized that the participants working meetings at the Ministry of Finance of Ukraine came to an agreement to repay of the debt mentioned above at the expense of the National Budget funds. The Ministry of Finance of Ukraine received three alternative proposals to resolve this issue without making pressure on local governments and was informed about the main risks of making hasty decisions. At the same time, as a result of the rapid response, involvement of local government representatives and National Deputies to prevent the consideration of the regulation mentioned above, the draft resolution was never considered by the Cabinet of Ministers committee and was not submitted to the Cabinet of Ministers. The losses of local budgets in the event of the approval of this specified resolution could have amounted up to 9 billion UAH.

The Association defended the provision to transfer excise tax collections on fuel to local budgets In the course of preparing the draft Law of Ukraine “On the National Budget of Ukraine for 2018” and the corresponding amendments to the Budget Code, the AUC defended the position to retain the current rate of deductions from the excise tax on the production and import of petroleum products to local budgets and to increase the percentage of collections to local budgets from 13.44% to 17.66%, as the government had an intention to abolish the specified provisions after the enactment of the National Road Fund as of January 01, 2018. At the meeting of the Budget Committee, PULSE experts tried to retain the current provisions and to prevent the abolishment of excise tax on petroleum products, as local governments already included the relevant revenue forecasts regarding this tax and the allocations to socially significant activities in their local budgets. In addition to this, the abolition of the said provision might have led to big discontent of local governments due to the loss of a stable source of revenues. Also, this approach would have undermined the principles of decentralisation. During the previous meeting of the working group, the Budget Committee decided to preserve the current mechanism, but in view of the limited resources in the National Budget, the Ministry of Finance at the meeting of the Budget Committee tried to remove the said provision. In addition to this, there were attempts to remove 15% of rent payment for special use of forest resources and 15% of rent payment for special use of water resources. PULSE Project experts emphasized the inappropriateness of such hasty and unjustified decisions of the Budget Committee. They came up with a suggestion to increase the percentage of redistribution of the basic excise tax on the production and import of petroleum products based on sound calculations and indicators. In addition, National Deputies included this amendment to the Budget Code, which unfortunately did not receive enough votes during voting in the session hall. In general, the AUC managed to defend its position. Ultimately, the VRU Budget Committee preserved left the provision for inclusion of 13.44% of the tax mentioned above to local budgets in 2018 - 2019 in the draft resolution of the Verkhovna Rada (Budget Conclusions) on the draft National Budget of Ukraine for 2018 and related draft laws to support its implementation.

The parliament takes into account the positions of local governments in the Law of Ukraine “On the National Budget of Ukraine for 2018” The Association of Ukrainian Cities actively participated in the preparation of main approaches to the formation and implementation of local budgets in 2018 and encountered a number of problems and threats, but managed to overcome tem due to close cooperation with the Cabinet of Ministers, parliament and all stakeholders. Thus, in particular, the initial version of the National Budget for 2018 prepared by the Ministry of Finance for consideration by the Cabinet of Ministers of Ukraine envisioned shifting a significant load to local budgets without compensatory resources, failed to increase the revenue part of local budgets, changed the system of horizontal equalisation by increase withdrawals from local budgets, envisioned coring a significant amount of debts at the expense of local budgets, and envisioned the volume of health care and education subventions far below the level of minimum need. Thanks to the efforts of the Association of Ukrainian Cities, local governments in all territorial communities in 2018 will receive an additional resource in the amount of more than 50 billion UAH. Due to the AUC steps, the Law of Ukraine “On the National Budget of Ukraine for 2018”:

80 October – December, 2017 Eighth quarter of Project implementation prevented: - transferring to the local budgets of benefits to the population for the payment of housing and communal services (UAH 7 billion) and repayment of arrears on such services that arose in previous budget periods (UAH 2.5 billion). In addition, UAH 17.9 billion of social subsidies were further increased to maintain the 2017 mechanism for financing expenditures for granting privileges, housing subsidies to the population and providing state social assistance. This will allow local budgets next year to not divert a significant part of their own resources, which otherwise could may be spent on developing their own infrastructure. The principle of subsidiarity has been preserved, and the financing of benefits for housing and communal services is shifted to the National Budget; - transferring the maintenance of higher educational institutions of Accreditation Level I - II (technical schools, colleges, schools) (6 billion UAH) to the level of oblast significance cities. The financial support will be provided from oblast budgets and the budget of the city of Kyiv. In addition, 371 colleges, which are structural subdivisions of universities and institutes, will continued to be supported by the National Budget. The Association of Ukrainian cities managed to persuade the Cabinet of Ministers about the negative experience and consequences of transferring the financial support to educational institutions to the local level; and, - removing of 10% of environmental tax from village, town and city budgets and budgets of consolidated territorial communities.

ensured: - transferring of 299 united territorial communities where elections were held in 2017 to direct inter-budget relations. This will enable communities to receive the necessary resources, develop their infrastructure and use the opportunities of their enhanced financial autonomy; - resolving the issue of local budget debt on mid-term loans local budgets received in 2009 - 2014 (total amount of 9 billion UAH in 332 local budgets) by writing it off. For several years, this issue was delayed and, correspondingly, worsened the credit ratings of local budgets preventing communities to get cheap loan funds. At the same time, several attempts were made by the Cabinet of Ministers of Ukraine to approve a resolution to repay such debt at the expense of local budgets, which would significantly misbalance local budgets. - compliance with Article 142 of the Constitution and provision of compensatory resource to communities in the form of an additional subsidy to cover local budget losses associated with the provision of state guaranteed tax privileges on land tax payment to entities working in the space and aircraft industry in the amount of 273 million UAH; - inclusion of all local budgets into the system of redistribution of additional subsidy for maintenance of educational and health care facilities (16.5 billion UAH). Initially, such a subsidy was supposed to go to oblast budgets to be further redistributed exclusively between rayon budgets for their needs. This move will provide opportunities to channel significant recourses to cities and CTCs for maintenance of educational and health care facilities; - an educational subvention in the amount of 62.2 billion USD, which includes funds for financing vocational schools. Also, the right to direct unused funds of the education subvention for updating the material and technical base of educational institutions; - a health care subvention in the amount of 57.4 billion UAH. This subvention was increased by 5.9 billion UAH before the second reading of the draft law on the National Budget, of which 5.2. UAH billion will be spent by July 01, 2018 according to the old mechanism of primary health care; - collection of a significant resource to local budgets for the development of the road infrastructure;  retaining for 2018 and 2019 the provision to include in local government budgets 13.44% of the excise tax on fuel (from 7 to 9 billion USD annually);  channelling 35% of the funds of the National Road Fund for roads of national importance in local communities and communal roads (11.4 billion UAH). At the same time, at least 20% of these funds will go to streets and roads in populated areas; and,  prolongation for 2018 of the customs experiment to provide financial support for the implementation of road development and repairs projects (recipients - local budgets).

safeguarded: - the current mechanism for horizontal equalisation of sufficiency of local budgets, which will enable communities to develop and balance their revenues. Consequently, cities will not lose their motivation to increase their revenues, strengthen their financial potential, attract investors, and develop the entrepreneurial sector;

81 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project - the total of 3.3 billion UAH will stay in communities: this is the amount of reduction in withdrawals of funds from local budgets in favour of the National Budget. At the same time, for the first time, internally displaced persons (1.5 million people) were factored in the calculation of indicators of the basic subvention and the reverse subvention; - additional increase of social subventions by 17.9 billion UAH for preserving the mechanism of financing expenditures for the provision of privileges, housing subsidies to the population in 2017 and for the provision of state social assistance; - the National Regional Development Fund was set at the amount of 6 billion UAH. This will allow not only to attract funds to communities, but also to direct them to promising projects with detailed justification for selecting the best ones in order to achieve national goals and strategic objectives; - a subvention from the National Budget to local budgets to pay the difference in tariffs in the amount of 1 billion UAH. This subvention will reduce the payables of municipal heating and water supply companies. It should be noted that debt for energy payments has a negative affect on the financial condition of municipal utility companies and may lead to fines and penalties. The Association of Ukrainian Cities insisted on the allocation of 5 billion UAH to resolve this problem; - the national Potable Water of Ukraine targeted program (200 million UAH), as well as the 100 million UAH increase of the financial support from the National Budget to the Youth Housing Assistance Program (to provide co-financing for local housing programs). These programs will provide opportunities to satisfy the needs of consumers in high quality water at affordable, economically justified prices, ensure sustainable and balanced development of centralised and decentralised drinking water supply systems, as well as ensure the implementation of a high quality national housing policy; - a subvention in the amount of 1.9 billion UAH for infrastructure improvements in all 665 CTCs. Such support for newly established communities is somewhat smaller than that the one originally required by the AUC, but at the same time, it will promote the conditions for increasing the competitiveness of CTCs, stimulate their sustainable economic growth, modernise their infrastructure and assist in implementation of investment projects.

for the first time: - takes into consideration internally displaced persons (1.5 million people) in the course of the calculation of the indicators of basic and reverse subventions; - switches over to direct inter-budget relations 299 united territorial communities where in 2017 initial local elections has taken place and will be conducted; - regulates the issue related to applying regulatory requirements to decisions on setting local taxes and fees approved in pursuance of the Law “On Introducing Amendments to the Tax Code of Ukraine” by local governments and consolidated territorial communities. Consequently, such requirements will not be applied to decisions of local governments in 2018; - envisions a new source of income for all local government budgets, namely: a fee for issuing a license for conducting commercial activities in issuing and organising lotteries. Such a resource was envisioned exclusively for the budget of the city of Kyiv in the draft document submitted for the first reading of the Law “On the National Budget for 2018”. The Association of Ukrainian Cities requested to give a possibility to have such source of revenues for all local governments at the community level to properly implement and balance their budgets, as well as to provide a systemic mechanism for compensating for losses of local budgets.

SUCCESS STORIES FROM COMMUNITIES

LOCAL ECONOMIC DEVELOPMENT

The Veselivska CTC, Zaporizzhya oblast The community opens the Ukrainian Flight Academy Thanks to decentralization, the Veselivska CTC is developing airplanes and is establishing a flight academy, which trains students from around the world. The village of , which in 2015 became part of Veselivska CTC, has a unique enterprise for the production of agricultural planes. And now, on the basis of agricultural lyceum, they have opened the Ukrainian Flight Academy. Already in the next year there will be two groups of future pilots and aviation engineers. In Ukraine, pilot training costs 15 thousand dollars for 5 years, in - 20-25 thousand, and in the USA - about 150 thousand dollars. However, the principle of control of all aircraft is the same. Therefore, graduates

82 October – December, 2017 Eighth quarter of Project implementation of the flight school in Shyroke will be able to operate almost any large plane - from "Boeing" to an airbus. Upon completion of the training, they will only have to confirm the diploma by passing the exam. Already now, the aviation facility in Shyroke gives about 300 thousand UAH of taxes per year, providing 30 jobs. The number of employees of the aviation enterprise is gradually increasing, thus increasing the community profit. With the opening of the Flight Academy, the amount of taxes on the community budget will increase several times, as well as the image of the village.

The Vyzhnytska CTC, Chernivtsi oblast “A Gateway to the Carpathians” - the community opened a tourist center The Vyzhnytska CTC is located in the foothills of the Carpathians and has chosen the development of “green tourism” as its strategic priority. To activate this sector, the city council supported the establishment of the “Gateway to the Carpathians” Tourist Information Center. The purpose of the center is to provide services to owners of cottages and provide information support to tourists coming to the community: consultations, placement assistance, leisure activities, organisation of family recreation, and recreation for people with disabilities. In addition, the Center will promote the Vyzhnytska CTC as a community of green tourism. The staff will take part in international exhibitions and conferences, which will present the tourist opportunities of their community. As a result of the Center activities, owners of “green” cottages will be able to coordinate their work, while the CTC tourism industry will receive additional development, which will create additional jobs and increase community revenues.

The Vodyanskaya CTC, Zaporizzhya oblast The community to start exporting greenhouse vegetables The village of Vodyane opened a unique facility in the region. This is a packaging platform for exporting greenhouse vegetables grown by local farmers. More than 2 thousand hectares of the community territory are covered by film greenhouses where about 500 thousand tons of vegetables grow. After the establishment of the new CTC, this industry received a powerful impetus and the once abandoned company began to revive. The construction and reconstruction work in the old transportation company just a bit more than 4 months. The premises have been renovated and equipped with modern refrigeration, weight, and loading equipment, air conditioning system, and ozone system for disinfection. The company is planning to cool the vegetables, pack them and export to developed countries in Europe. The platform has the capacity of receiving and processing up to 80 tons of vegetables per day. The community has received not only new jobs, but also a direct way to export agricultural products.

COMMUNITY DEVELOPMENT

The Nedoharkivska CTC, Poltava oblast A small but successful community The Nedoharkivska Village CTC is one of the smallest communities in the oblast and includes five populated areas where 4 thousand people live. Due to the concerted actions of the village mayor, local council members and villagers chairman, deputy corps, and residents, the community is showing significant success - roads and first aid stations are being repaired and street lighting has been installed in all populated areas. In 2017, 3.5 million UAH was spent on infrastructure development. In the village of Maksymivka, a water supply system was reconstructed - two water towers were installed to provide uninterrupted supply water to the residents, and an additional group of 25 children was opened in the kindergarten working at the local comprehensive educational establishment under the NSC. In the village of Nedoharka, the kindergarten has been completely renovated. The community also managed to resolve the problem with personnel and now it has a lawyer, accountant, and specialists in the personnel department. They commute to their work from Kremenchuk.

The Steblivska CTC, Cherkasy oblast Consolidation for development

83 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project Currently, there are ten CTCs in the Cherkasy region with seven of them having their development strategies. These include the Steblivska CTC. The community was established half a year ago. Due to decentralisation, the community received the possibility to use funds at its own discretion, while its budget increased up to 33 million UAH, twice as much as before the consolidation. Currently, the villagers see tangible changes. The school in the village of Datsky received the modern office equipment the pupils have long dreamt of. Earlier, the community budget had no funds to meet all the needs of the school, however half a year ago, the establishment has been financed from the CTC budget. The community boasts the new repairs of its House of Culture in the village of Yablunivka. The community distributes its budget fairly by calculating its sum per capita. This is why the community is able to renovate rural leisure centers, repair bridges and upgrade first aid stations. All in all, the community allocated 500 thousand UAH for road repairs, 200 thousand for street lighting and scheduled repairs of social sector institutions. In 2018, the community is planning to improve its rural health care.

The Illinivska CTC, Donetsk oblast First youth center in Ukraine in a CTC The opening of the of the «Без обмежень» [no restrictions] Youth Center on October 13, become a real event for the young people of the Illinivska CTC. Earlier, young people had nowhere to gather and spend evening time. Now there is a new center of youth initiatives. The building of the former house of culture was repaired within the framework of the oblast program. Here, they performed repair works, purchased modern equipment and did the Internet connection. The center provides a comfortable space for people with special needs and takes into account the wishes of young people of the community. There is an open space for training, lectures, thematic meetings, a place to watching cinema, and an exhibition hall with a place for youth cultural entertainment. Also, the center will attract specialists so that young people could gather and prepare for the external knowledge check.

The Verkhnyanska CTC, Ivano-Frankivsk oblast Increased budget and sound management helps the community to develop The Verkhnyanska CTC belongs to the pioneers on the path of voluntary consolidation of communities and for more than a year has been living under the new rules. Since the establishment creation of the CTC, the community's budget has grown tenfold. In other words, earlier, the budget for all 12 settlements was 4 million UAH. Now this number is 40 million. These funds were directed at road repairs, construction of the water supply system, and overhaul of schools, kindergartens and outpatient clinics. The community performed major repairs at the outpatient clinic of the village Dovhyi Voinyliv, repaired first aid stations, put up the heating system, purchased medical equipment and bags for medicines. Last year, street lighting was installed in all populated areas. The village council set up a center for social services for young people, a territorial assistance center for single citizens, Center for Administrative Services (CAS), and the «Верхнянський господар» [Verkhnyanskyi host] utility company. The community modernised the heating system in the Verkhnyanska school to save energy and put up a new sport ground in the Stankivska one. The community is planning to build a solar power station on the CTC territory in the village of Zbora, as well as has identified an investor for the construction. The new solar power station will offer additional employment opportunities and provide additional collections to the village budget. Meanwhile, in the villages within the CTC they already started to install the first mini-power stations: in the village of Nehivtsi on the People's House. The solar panels will help at least warm the premises. The panels were purchased at the expense of the local budget. The energy they will produce will be used for the needs of the institution and street lighting. This will give the community savings on energy. A similar mini-power station was put up on the roof of the school in the village of Stankiv. In general, the community plans to install four mini-power plants.

The Reshetylivska CTC, Poltava oblast The community is building corporate housing In Reshetylivka, the community is turning the former building of the central rayon hospital into corporate housing. For a long time, this dilapidated building stayed idle. After it was transferred to the communal

84 October – December, 2017 Eighth quarter of Project implementation ownership of the Reshetylivka City Council, the community decided to turn it into a five-apartment residential building. It will have five corporate apartments for those who need to improve their living conditions: doctors, combatants, children of privileged categories, as well as young specialists who will work in the CTC. In the future, according to the legislation, they will have the possibility to privatise these apartments. The works are being conducted on co-financing terms: 1.8 million UAH were provided from the National Budget and 1 million UAH were provided by the consolidated community. In addition to this, Reshetylivka is performing capital repairs of roads and modernisation of roofs of residential buildings.

HEALTH CARE

The Rukshynska CTC, Chernivtsi oblast The community opens renovated premises of the village first aid station The Rukshynska community opened the renovated premises of the general practice of family medicine unit. This unit has been functioning since 1954. Regular repairs did take place here from time to time, but the facility required capital repairs. The establishment of the CTC together with the fiscal decentralisation provided the opportunity for the community to make qualitative changes in its health care. The capital repairs of the premises in 2016 were carried out with the funds of the National Budget subvention for infrastructure improvements in CTCs in the amount of 1 million 232 thousand UAH. The repairs, in particular, included roof overlays and replacement of the floor, windows and doors with energy- saving ones. In 2017, the remaining balance of the health care subvention, namely 311 thousand UAH, went to the insulation of the building, repairs of the walls, improvements of the stairs and basement, as well as for putting a ramp. The community channelled 218 thousand UAH of financial assistance provided by local businessmen to interior repairs in the premises. Today, the first aids station employs 8 people. There is a day in-patient room for 4 beds. Recently, the community purchased a cardiograph, 6 new beds, furniture, plumbing, refrigerator, computer, bed linen, a boiler, and laid hot and cold water pipes. So, the community residents will be able to receive high-quality medical services in comfortable conditions without leaving the community.

The Tlumatska CTC, Ivano-Frankivsk oblast The community opens its own unit for primary care OCTOBER 27, the opening ceremony of the primary health care unit in the Tlumatska City CTC took place. The unit was set up in the premises of the Central Rayon Hospital. The unit has beds for day care. The new institution provides consultations, conducts urgent examinations, and also provides opportunities for residents to choose their family doctors. The unit also has a day care department. The Center currently employs 11 therapists, paediatricians, and family physicians who take care about three dozen patients every day. “Today, our institution provides patients with an opportunity to choose the doctor. There are the services related to primary care. According to the reform, we can offer a wide range of medical services”, - said Chief Physician Oksana Melnyk. The unit is a medical and preventive institution that includes: x Department of Family Medicine; x Outpatient department of general practice of family medicine in the village of Bortnyky; x Nursing and Midwifery points in the villages of: Bratyshiv, Ostrynya, Zahirya, Viknyany, Tarasivka, Puzhnyky, Prybyliv, Hrynivtsi, Kolintsi, Nadorozhna, Korolivka. x administrative and economic service.

PUBLIC EDUCATION

The Zabrodivska CTC, The first school in Volyn to get heated by sun The first Volyn school with the energy saving water heating system powered by solar batteries and a 3D- picture of the facade will open in the village of Zabrody, which is part of the Zabrodivska CTC. The rural

85 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project training and education facility consisting of the Grade I – III School and a kindergarten was built back in 1971. During the many years the wooden constructions have become dilapidated, while the temperature in the premises was too low for effective training. The capital repairs of the school this year was included in the list of projects to be funded from the National Regional Development Fund with co-financing from the local budget in the 90/10 proportion. The total value of the project is almost 2.9 million UAH including: 2.6 million coming from the Fund and 289 thousand UAH coming from the community. Currently, the community is repairing the premises, insulating walls, performing facade works, and installing new windows. These works will make the stay of pupils more comfortable and to make heating savings due to energy efficiency technologies.

The Yakushynetska CTC, Vinnytsya oblast Bibliobus means a modern mobile library An unusual mobile library on wheels was presented in the Yakushynetska CTC. Three years ago the Vinnytsya Central Rayon Library launched the Mobile Library project, but there has always been limited funding for cultural institutions. The decentralisation reform gave a new impetus and resources to improve the library network and opening of more libraries. The bibliobus has 6 routes and 14 stops in the populated areas in the rayon. It operates according to the daily schedule, taking into account the needs of the inhabitants. The bibliobus is equipped with books and printed materials for different age categories, periodicals, computer equipment with access to the Internet, and its own electricity generator. The mobile library facility works as an information advisory center, as well as a platform for cultural events, presentations, and master classes. It is also a way for people with disabilities to access information.

SOCIAL PROJECTS

The Novoushytska CTC, Khmelnytskyi oblast Modern center for social rehabilitation Thanks to decentralisation, the Novoushytska CTC has modernised its center for social rehabilitation. Following consolidation the community started to implement social, infrastructure, municipal utility and other projects. One of them was the Nova Ushytsya Territorial Center for Social Rehabilitation. At the moment, more than two and a half thousand elderly persons and participants of military activities take rehabilitation there. The repaired premises have 12 rooms for doctors, psychologists and provide services after illnesses, in particular after stroke. The gym boasts with portable simulators, which can be used on site to provide rehabilitation at home. The center has a massage room, curative physical training, and a gala camera – a salt room for respiratory diseases. Recently the center opened the aroma therapy rooms, rooms for psychological relaxation and a herbal tea bar. The center was equipped on the terms of co-financing: half of the funds were provided by the community and the other half was provided through international technical assistance from EU countries. The citizens began to feel the community cares about their health and now they are able to receive qualified assistance in the new center, while the community got new jobs.

The Humenetska CTC, Khmelnytskyi oblast A mobile social services team established Since the establishment of the CTC, the community considered taking care for vulnerable social groups, the elderly, and persons with special needs as its priority. It has established the Humenetskyi Territorial Center and later on formed a mobile multidisciplinary team there. The team includes a group of professionals, social workers and volunteers who seek to help those in need. They perform home visits to persons and perform the necessary work there ranging from haircuts and cleaning up to the improvement of yards or minor repairs. During the first month of its work only, the group attended 14 elderly people and disabled persons and provided them 1,504 social services. By doing so, the CTC improves the quality of life of inhabitants on its territory.

The Bashtanska CTC, Mykolaiv oblast The community opens a renovated first aid station and a kindergarten

86 October – December, 2017 Eighth quarter of Project implementation Two villages of the Bashtanska Consolidated Territorial Community implemented important social projects. The village of Plyuschivka performed capital repairs of the first aid and midwifery station: the roof was repaired, the heating system was upgraded, and a pellet boiler was installed. The project was implemented with the financial assistance from an international donor on the basis of co-financing. All in all, 342 thousand 341 UAH were spent, of which 135 thousand 600 UAH were donor funds. The village of Yavkyne opened a renovated kindergarten, which was repaired at the expense of a subvention from the National Budget for infrastructure improvements in the CTC. “The Bashtanska community has taken first steps in the decentralisation process and has seen them on its own experience, as the opening of such vital social facilities is a vivid confirmation of the joint actions of the local government and the community. Today, we can congratulate the community with another important victory in improving life on the territory of the Yavkyne and Plyuschivka starosta districts”, - said Ivan Rubsky, the Mayor of the CTC. An updated first aid station in the village of Plyuschivka will enable residents of the three neighbouring villages to get fast primary health care in the proper conditions. The insulated building, energy-saving windows, a washbasin with a shower cubicle, modern children's furniture: this is how the reconstructed Yavkyne Kalynonka kindergarten looks like. Now, 25 rural children will be able to study in comfortable conditions.

The Makiyivska CTC, Chernihiv oblast The community opens a new kindergarten The new kindergarten built in the premises of the Pustotyne Education Complex in the Makiyivska Village Consolidated Community opened its doors for 15 pupils. The community performed the complete reconstruction of the premises at the expense of the National Budget and the local budget. From now on, kids have their own “home of joy” where they will develop, educate, learn, communicate with their peers, and successfully prepare for school. By the way, the village of Pustotyne is part of the Makiyivska Village (Consolidated) Territorial Community of the Nosiv rayon. This CTC is one of the ten smallest ones in Ukraine. But, despite this, the community has managed to implement four social projects last year only.

The Novokalynivska CTC, Lviv oblast The community opens two kindergartens The village of Hordynya, which is part of the Novokalynivska Consolidated Territorial Community, is finishing the reconstruction of the building of the former outpatient clinic to build a kindergarten there. The children from three villages, such as Hordynya, Mala Bilyna, Velyka Bilyna, will go there. According to Bohdan Yusvyak, Mayor of the Novokalynivska CTC, the reconstruction of the Hordynya kindergarten has been performed at the expense of the subvention for infrastructure improvements and amounts to 1 million 200 thousand hryvnyas. In May of next year, the community is planning to open a kindergarten in Novyi Kalyniv. The community hopes to complete its construction at the expense of funds from the National Regional Development Fund. The community has already submitted the corresponding application for the competitive selection. Bohdan Yusvyak, Mayor of the Novokalynivska CTC, said that the children in his community represent one of the priorities, so the community plans to provide all children of the community with pre-school education.

Starobohorodchanska CTC, Ivano-Frankivsk oblast region The community opened a modern kindergarten On December 19, on the St. Nicholas Day a modern kindergarten opened in the village of Nyvochyn in the Starobohorodchanska Consolidated Territorial Community. The opening of a new kindergarten became a real entertainment for the rural children and their parents, because the villagers were waiting for such event for more than twenty years. And only after the establishment of the consolidated community, this became possible. Due to the increase in revenues to the

87 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project local budget and the subvention for infrastructure improvements, the community during the last two years managed to perform capital repairs of the former household services office and open a modern kindergarten, which had already accommodated twenty-eight children from the village of Nyvochyn. Throughout the whole repairs of the kindergarten, parents and residents of the village participated in repair works and provided other assistance. Yuriy Stefanchuk, Executive Director of the Ivano-Frankivsk AUC Regional Office, who took part in the opening ceremony, emphasized that the opening of a preschool educational institution is a vivid example of bringing services closer to the people and efficient use of funds in Starobohorodchanska CTC. Yaroslav Zderka, Mayor of the Starobohorodchanska CTC, said that the other plans of the community include the opening of pre-school educational institutions in other populated areas within the community.

The Chaplynska CTC. Kherson oblast 72 families received housing within the framework of the Own Home program 72 families received housing under the Own Home program in the Chaplynska CTC. This happened for the first time since the early 1990s. In the CTC, an apartment building with the floor space of 4,541.6 sq.m was put into operation after the reconstruction of an unfinished administrative building. The cost of construction amounted to 25.887 million UAH. Keys to apartments were given to many young families, thus the CTC has a great future. In particular, the CTC purchased 4 apartments for their specialists and 2 apartments were purchased for doctors of the district hospital. The new owners of the apartments include 9 employees of the public education sector, 7 physicians, 2 police officers, 7 employees of budgetary institutions, 44 specialists of the agro-industrial complex, and 3 families of ATO participants. The decentralisation reform is not a myth. Significant excessive budget collections and construction in the countryside has become a reality and Chaplynka is successfully putting housing into operation under the Own Home program through preferential loans.

ADMINISTRATIVE SERVICES

The Mokokalyhirska CTC, Cherkasy oblast The community has now its own modern Center for Administrative Services The village of Mokra Kaliyhirka opened a modern Center for Administrative Services to provide the CTC residents with 126 various types of administrative services including the most popular ones, such as: subsidy registration, real estate registration, land management, social security, and retirement benefits. There will be 4 specialists in the CAS. The Center was put up with the financial resources of the local community, National Budget subvention, and sponsorship. In addition to this, thanks to the participation in international technical assistance projects, the Mokra Kalyhirka CAS is equipped with furniture, computer equipment, and software. From now on, citizens do not have to go to the rayon center to receive services, as all services are available in the community.

The Yerkivska CTC, Cherkassy oblast A modern Center for Administrative Services opened The village of Yerky opened a modern Center for Administrative Services (TSNAP). The Center will provide more than 130 administrative services to citizens in the community including the most popular in the CTC, such as: subsidies, real estate registration, land management, social protection, and pensions. The TSNAP will employ five 5 specialists who have taken specialised training. Upgrading the center in the village provided only 45 services, now such services - 131. The service fee will go to the community budget. The center has been set up according to European standards and is accessible for people with disabilities. The center has a children's corner. The new Center for Administrative Services offers high quality access to administrative services in the on-stop-shop format for approximately six thousand residents of the Yerkivska CTC.

HIGH CAPACITY COMMUNITIES

88 October – December, 2017 Eighth quarter of Project implementation The Veselivska CTC, Zaporizzhya oblast The community to build a solar power station and school greenhouses The Veselivska CTC is introducing the practice of building greenhouses in educational institutions to provide food for children produced locally. The leadership of Veselivska CTC decided to allocate funds to provide healthy meals of fresh vegetables in winter time for pupils of School # 1. A greenhouse was built on the territory of the educational institution and the school dining room will provide the children with a vitamin diet. In the greenhouse they grow seedlings of cucumbers, tomatoes, flowers, as well as fresh greens. Irrigation and heating systems have been set up in the premises so that it is possible to get vegetables all year round. The vegetables grown in the greenhouse are environmentally clean, promote the health of students and provide financial support to the school. The practice of building school greenhouses provides significant savings on the purchase of food for schoolchildren teaches students to work and creates conditions for a healthy lifestyle of children. In addition to this, the Veselivska CTC has started the construction of a large solar power station on the territory of the former canning factory. Over the recent decades, this territory was abandoned and turned into a large landfill. Leadership of the consolidated territorial community decided to attract investors who would have the opportunity and desire to invest in new enterprises. So investors came to Vesele (the Solar Park Pidhorodnye Ltd.). The investor expressed the desire to build a solar power station on the territory of the community. The works has already started. Building the power station is beneficial for the Veselivska Community: it means the revenue from rent and taxes, new jobs, improvements of the community image, and a guarantee of sustainable electricity supply for populated areas within the community.

The Vynohradivska CTC, Kherson oblast The community wins the oblast competition for the implementation of the project to repair the village house of culture in the village of Myrne Due to the energetic approach and persistence of consolidated communities, as well as new financial opportunities provided by fiscal decentralization, the Kherson oblast is able to implement infrastructure projects even for small villages within CTCs. Now was the turn for the house of culture in the village of Myrne of the Vynohradivska Village CTC. The Vynohradivska CTC has developed its own project: “Capital repairs of the village leisure center in the village of Myrne of the rayon of the Kherson oblast” and received a unanimous decision to support this initiative. 200 thousand UAH will be provided from the oblast budget in 2018, while the community contribution will be 208.5 thousand UAH. In addition to this, the project envisions the mandatory participation of partners, so the renovation of the building will be supported by the New Horizons non- governmental organisation and the Agrodend Kherson Ltd. (with a financial contribution of more than 20 thousand UAH).

COMMUNITY SAFETY

The Slobozhanska CTC, Dnipropetrovsk oblast The first in the oblast Center for Citizen Safety started its work The recently opened Center for Citizens Safety in the village of Stepove, which is part of the Slobozhanska CTC, protects security of more than 14 thousand inhabitants. From now on, the rescuers can respond to emergencies in a much timelier manner and get to the scene in 5 - 7 minutes. In the new security center has the following: a garage, office rooms, a dining room, a lounge room, and even a shower room. The center employees 15 specialists: both professional rescuers and volunteers. The local community badly needed such a security center, because in case of emergencies or extraordinary events one had to wait for rescuers from as far as the city of Dnipro. The security center was set up with the help of the Slobozhanska Community and with the support form an international donor. Igor Kaminsky, Mayor of the Slobozhanska CTC, said: “The main goal of the local government is to make people's lives more comfortable and to demonstrate the positive changes that take place in the CTC after the consolidation. The opened Center for Citizen Safety, in reality, demonstrates the successes of the decentralisation reform and its opportunities”.

The Myrnenska CTC, Kherson oblast

89 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The community has its own fire brigade now The Myrnenska Consolidated Territorial Community has celebrated a real holiday: the solemn opening of the local fire brigade. This is the first fire brigade subdivision in the oblast established by the CTC. The main purpose of establishing the local fire brigade is to provide assistance to people in the elimination of fire or in other extraordinary events and situations in the shortest possible time and in the prompt and professional manner. The team consisting of seven guards will stand on the watch in the populated areas belonging to the community, as well as in those nearby, which are difficult for the professional fire brigade to get to. The voluntary fire brigade will be located on the territory of the Kalanchak bakery. All fire fighting men have been trained, and some of them already have already some military experience.

COOPERATION OF GOVERNMENT WITH THE COMMUNITY

The Snovska CTC, Chernihiv oblast The community introduces the practice of SMS-polling of its inhabitants A session of the Snov City Council made a session about SMS-polling of inhabitants of the community. Oleksandr Medvedyov, the Snov City Mayor, provided the answer to the question about what this is, why one needs it, and how much it will cost. He said that the local government indeed has an intention to set up a special phone line to receive calls and messages from residents of the community. “People are already calling us and send SMS messages - to my personal phone numbers and to the numbers of local council members”, said the Mayor. – “For example, we were interested in the opinion of citizens where to hold a rock festival - on the square or on the stadium, so the young people who are studying outside the community and did not have the opportunity to come to the City Council, sent an SMS messages with their opinions”, - Medvedyov explained. 0 “We will consider this issue next year. The whole project will cost 5 thousand hryvnyas. We will publish the phone numbers in the newspaper and will make them public on our web site”, - added the Snov City Mayor.

HOUSING AND MUNICIPAL UTILITIES

The Novolativska CTC, Dnipropetrovsk oblast Water supply network is the first infrastructure project in the CTC The village of Zelena Balka, which is part of the Novolativska CTC, got its centralised water supply. There are more than half a thousand persons living in the village. The water now will get to the village through the new network. This is the first infrastructure project of the consolidated community. People have been waiting for this to happen for dozens of years. In 2017, the Novolativska CTC earmarked form its budget 213.111 thousand UAH for capital repairs of the water supply network in Zelena Balka. Next year, the community is planning to put side networks in 12 streets in the village. In the future, the main water network will connect the villages of Makarivka, Chervonyi Ranok, and Nove, thus providing potable water to half a thousand residents who did not have it for ages. During the last two years, communities in the Dnipropetrovsk region built and reconstructed more than 40 water supply networks to provide water to approximately 300 thousand residents in the oblast. Also, this year, a village school in Zelena Balka will turn to partial heating with pellets. From now on, the gym, dining room and the premises of the primary school will be heated in a new way. All these changes for the better became possible after consolidation of the territorial community.

The Shyrokivska CTC, Zaporizzhya oblast The community introduces a separated collection of solid waste as the first stage of a large environmental project The Shyrokivska CTC is actively cooperating with international organisations and is looking for ways to raise funds for development, as well as studies the European technologies for the development of local infrastructure. The first result of such cooperation was the introduction of solid waste collection in the community.

90 October – December, 2017 Eighth quarter of Project implementation Containers for separate collection of solid waste have been installed in the central village council: four coloured containers are designed for paper, plastic, tins and glass. The practice of separate waste collection will involve community-based educational institutions as well. The project, called “Coloured Buckets”, is social in its nature and is intended to teach the residents to sort solid waste. The initiator and executor is the local EuroIn NGO. Its employees will monitor the timely replacement and cleaning of sorted solid waste containers. The NGO assumed the responsibility for disposing of sorted solid waste into centralised collection sites for further utilisation or recycling. Thanks to the implementation of the Project, the community was able to collect the statistics data about the volume and composition of solid waste. This information will be used to determine the capacity of the future solid waste processing plant, whose construction is currently considered as part of the strategic development plan of the community. Such a plant will become the first one on the territory of the Zaporizzhya oblast and will significantly improve the environmental of its territory. In addition to this, the profitable company will offer new employment opportunities for community residents.

The Chmyrivska CTC, oblast Supplying water to villages within the community Water towers are the main suburban means for elevating and supplying of water. However, they have many disadvantages, in particular, freezing of water in winter time, limited stable pressure, dirty water, etc. The outdated water supply system, built in the 60s of the last century, has for several years been posing considerable complications for the lives of the inhabitants of the villages of Orikhove and Novoomelekove, which became part of the Chmyrivska CTC. The community is us! So was the motto of the community residents who have identified the reconstruction of the utility sector as their top priority. Specialists of the town council prepared an application for the oblast level competition of local development projects. Their project is entitled: “Improvement of the water supply in the village of Orikhove of Chmyryivska Consolidated Territorial Community through the capital repairs of the water tower and launching the water supply network”. The project got the second place in the ranking of the winners of the competition and received funds for the implementation under co-financing from the oblast and local budgets. Currently, the tower has already been repaired, the water supply network has been connected to it, and now the community is planning to assembly water meters. Decentralisation has provided the villagers with a new life and confidence in their future.

STAFF AND ORGANISATIONAL ASPECTS

The Dunayevetska CTC, Khmelnytskyi oblast Online conferences with starostas The Dunayevetska City CTC is one of the largest communities in Ukraine. It consists of 51 populated areas. Because of the remoteness of the villages from the community center and a large number of starosta districts, it is difficult to coordinate the work of the starostas and promptly respond to local issues. The community leadership decided to introduce weekly online meetings using modern communicative technologies such as Skype video communication programs to establish effective communication with the starostas who represent the community executive committee at the local level. The session hall of the city council is equipped with the appropriate multimedia devices, while the starostas get ion-line with the help of the computers, which are available at their workplaces in the districts. Thanks to such on-line meetings, the community is able to respond to local issues promptly, while the starostas do not have to come to the city council, so the community saves time and money. At the same time, they become informed about events and decisions without leaving their workplaces.

INFRASTRUCTURE IMPROVEMENTS IN COMMUNITIES

Vilshanytska CTC, Lviv oblast Community gave a gift for a small village: renovated people's house and first aid station

91 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project The small village of Lukavytsya, which is part of the Vilshanytska CTC, opened the renovated premises, which houses the people's house and the first aid station. Four years ago, people did not even want to enter this unfriendly building. However, the changes took place after the village became part of the Vilshanytska Consolidated Territorial Community. Although Lukavytsya is a small village, but from now on, after the repairs of the premises, the medical care became accessible for the rural population and is now provided in comfortable conditions. The people's house has already conducted a festive concert in the renovated hall, which was prepared by the local children. Young artists got sweet gifts.

The Olevska CTC, Zhytomyr oblast The kindergarten will be set up in the premises of the former village council The introduction of mandatory pre-school education for older pre-school children implied problems with the lack of vacant slots in kindergartens. The Olevska City Consolidated Community found a solution to create slots in kindergartens. In the village of Kopysche, which is part of the community, the local government decided to open a kindergarten in the premises of the former village council. During the public discussion, the residents supported this proposal, as the premises of the village council premises are currently not used for their intended purpose. As a result, the local government made a decision was to repair and set up a pre-school institution for 47 persons. The kindergarten will have all the necessary rooms: bedrooms, playrooms, locker rooms, buffets, bathrooms, isolator, medical room, assembly hall, offices for applied psychologist and management of the institution, and other premises. In addition, the community will refurbish the premises meals.

Interesting practices from the IREX sub-grant implementation

In the course of the implementation of decentralisation information activities in cooperation with libraries and community organisations in the second cohort of pilot communities, among others, the following should be noted:

1. Mapping the community: The form of the event, in its essence, implies studying the territory of the target community, its technical spotting on the Google map with attaching photos of recreation areas, green spaces and historic buildings. In particular, this implies making an electronic community map that is accessible for all through the Internet. The map will be used by city authorities and activists to make an investment attractiveness package of the community, offers for tourists, and to promote the community. This work was performed by grantees from the city of Novyi Rozdil of the Lviv oblast.

Description of the event: According to the preliminary agreement with representatives of villages of this future CTC, a team of representatives of NGOs and librarians from Novyi Rozdil together with residents determine the most important cultural monuments, social infrastructure and other interesting places (cafes, restaurants, hotels, parks, etc.), which can attract tourists and investors. The event lasts for 1 - 2 hours, mostly in the center of the settlement in the open air in good weather conditions, or is performed in the library if the weather is not so good. Next, in cooperation with the most active inhabitants, NGO and library representatives make markings on the Google-maps attaching photos of objects to geolocation markings (using their own photographic equipment and tablet). The same work is performed for every populated area that will become part of this CTC. One does not have to wait for long for the result of such an event - in a few days after the departure we have coverage in media, a report on the work performed on the CTC web site and social networks, etc.

2. Skype conference with the participation of representatives of two different communities and consultants of the AUC. This type of event envisions the exchange of experience with AUC experts. This event was conducted in the Berestivska CTC of the Zaporizzhya oblast. The event was attended by the mayor of the Polonska CTC of the Khmelnytskyi oblast (as a successful community to share its experience) and consultants from the Zaporizzhya AUC Reform Office. A dialogue in the format of a Skype teleconference took place. Community representatives provided short characteristics of communities, exchanged questions, and work experience. A particular attention was dedicated to opening and funding of

92 October – December, 2017 Eighth quarter of Project implementation hub schools and Centers for Administrative Services. In the end, the participants of the dialogue came to an agreement on further cooperation and experience exchange.

3. Involvement of members of IREX/PULSE Press Clubs in “Itinerary of Successes” organized by the AUC, which enabled librarians to visit communities and cover more local events. An example of such successful experience can be found in the Chernihiv oblast. On November 22, 2017, the director and a staff member of the Horodnya City Central Library System visited the Koryukivska CTC and learned more about their neighbours.

4. Providing open access to training courses and materials from the Prometeus training modules. Grantees form the city of Kreminna of the Luhansk oblast used the training course prepared by the DOBRE Project: “Decentralisation in Ukraine - Theory and Practice” (15 participants), with the Polonska CTC of the Khmelnytskyi oblast taking the PULSE Project course “Preparation for the Implementation of Community Development Projects” (41 participants). 5. Making promotional videos about communities to be used in information events to disseminate success stories of this community through the Internet. This was the inspiration the PULSE Project gave to the Berestivska community of the Zaporizzhya oblast. The first video: “The Brestivska community: two years of development” https://youtu.be/eqmKnvz3DhU. The second video: “The prospects for ecotourism development in the community” - https://www.youtube.com/watch?v=tyxZu3P1MJo.

6. Communicating with community residents at home. The ZEON company in cooperation with the centralized system of public school libraries in the village of Zdovbytsya of the Rivne oblast offered a new format for information reporting designed primarily for older people and people with disabilities. This format provides the opportunity for inform citizens personally by visiting residents at their homes.

7. Using of the simulator game “World of Communities” during information events. This facilitates modelling the situation in the community to discuss in more detail the topic of local government reform and to identify interesting ideas to be implemented in communities, to understand the basics of the flow of funds in the local budget, to understand the community as a mechanism every resident is an integral part of. The provides opportunities to identify active members (leaders), give basic knowledge to those who are not so much interested in the topic of community development and understand their role and importance in the modern world in achieving the common goal.

Section 5. COOPERATION WITH OTHER PROJECTS

In the reporting quarter, the PULSE Project continued its cooperation with partner projects and organisations, including: USAID DOBRE Project, Ukrainian-Canadian project Partnership for Urban Development (PLEDDG), Swiss-Ukrainian Project Support for the Decentralisation Reform (DESPRO), U- LEAD with Europe Programme, GIZ Integrated Urban Development in Ukraine Project, Swiss-Ukrainian Organic Market Development in Ukraine Project FIBL, World Bank, etc.

PULSE Project actively participated in the activities of partner projects, as well as invited project representatives, for example, in sectoral forums and project information fairs.

On November 14, 2017, PULSE Project organised the information fair for projects and organisations on the occasion of the Day of Dialogue with the Parliament. The event brought together 10 international technical assistance projects, namely: USAID PULSE Project, USAID RADA Program, USAID DOBRE Project, USAID Citizen in Action Project, Government of Canada Partnership for Urban Development Project (PLEDDG), Canadian Foundation for Local Initiatives, U-LEAD with Europe Programme, IFC (World Bank Group), Energy Efficiency in the Housing Sector of Ukraine, Swedish-Ukrainian Support for Decentralisation in Ukraine Project, and the Gender-Oriented Budgeting Project. The information fair was attended by about 300 city and town mayors and other representatives of local governments.

Cooperation with the World Bank On October 06, 2017, PULSE Project organised a meeting Head of the World Bank Regulatory Reform Support Program in the District Heating System Project (SIDA through IBRD Agency) Dr. Jean-Luc Pohe and Leading Project Expert Dr. Valdas Lukosiausvicius to discuss the future cooperation opportunities in

93 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project overcoming of crisis in heat supply, in particular, in relation to the formation of a model of incentive tariff setting b municipal heating companies and energy generating companies. Based on the discussions, the parties reached an agreement to take specific steps to cooperate in this sphere.

Cooperation with the GIZ Reform of Municipal Services in the East of Ukraine II Project On October 09, 2017, PULSE Project representative participated in the conference under the title “The status and prospects for reforming the system of provision of administrative services. Decentralisation of powers in the sphere of administrative services”. The event was organized by the Ministry of Economic Development and Trade, Ministry of Regional Development, and the GIZ Reform of Municipal Services in the East of Ukraine II Project.

Cooperation with the OSCE Office On October 12, 2017, a PULSE expert participated in a round table discussion organised by the Office of the OSCE Project Coordinator in Kyiv on the topic: “Updating the needs assessment for social services: interaction of state executive and non-governmental organisations at the Kyiv city level”. The PULSE Project expert presented the ideas of the Association of Ukrainian Cities on the reform of the social security system at the local level.

International Economic Forum On October 17, 2017, a PULSE project expert participated in the International Economic Forum under the title: “Poltava region: opening new opportunities”, which took place in Poltava. The Forum was a part of the regional target program for promoting investment attraction, development of economic cooperation and the formation of a positive image of the Poltava region for 2017 - 2020 developed by the Poltava Oblast State Administration. The PULSE Project expert chaired the meeting on the topic: “Promoting local economic development - what is the role of communities?”. The purpose of presentations and discussions was to highlight international, national, regional and local experiences in promoting local economic development, and the prospects for opening industrial parks on the territory of CTCs.

Cooperation with the Czech International Chamber of Commerce On October 12, 2017, Vice-President of the Czech Chamber of Commerce I. Titaranko and Senior Researcher Volodymyr Bezruchenko presented the e-School resource during the meeting of the Public Education Professional Group. The resource is a free platform for making a school web site and a platform to facilitate communication between visitors instead of being a simple set of static pages. It also offers a personalised login for each user, private and public communication, voting, chat for students and much more. It has a high security system. The implementation of e-School resource is important, as it helps educational institutions to implement the provisions of the Law of Ukraine “On Education” in terms of making web sites of educational establishments and filling in their content.

Cooperation the U-LEAD project On October 19, 2017, Deputy PULSE Project Director participated in the event, which was organized by the U-LEAD project for partner projects, made a presentation about training activities of the PULSE Project and answered the questions form the participants. The presentation was very interesting, especially the distance learning courses of the PULSE Project on the Prometheus platform.

Cooperation with the Gender-Oriented Budgeting in Ukraine (GOB) Project Deputy PULSE Project Director held a working meeting with a representative of the GOB Project. They came to an agreement to inform each other about project activities related to gender budgeting and potential cooperation.

Cooperation with the European Training Foundation (ETF) On October 25 – 26, 2017, a PULSE Project participated in the International Conference under the title: “Regional Management of the Policy and System of Professional Skills Improvement in Ukraine: Role and Duties of Regional Councils for Vocational Education"” organized by the European Training Foundation (ETF) and the Ministry of Education and Science of Ukraine. The event brought together representatives of the Ministry of Education and Science of Ukraine, European experts, directors of vocational schools from different regions of Ukraine, heads of departments for vocational training of oblast state administrations and other stakeholders. During the first day, the participants attended presentations of organisational and technical guidance for the activities of (new) regional boards for vocational education as presented in a

94 October – December, 2017 Eighth quarter of Project implementation report by Rodion Kolyshko, national expert, and Jose Manuel Galvin Arribas, expert on governance and life long training of the ETF.

The PULSE Project expert participated in the work of the group to discuss networking and communications in the system of regional boards for vocational training, and formulated the following requirements for the functioning of regional boards: 1. To take into account the needs of the labour market in the preparation of a regional training request; 2. To take into account the requests of local governments for training workers for the municipal sector; 3. To study the needs and requests of educational services customers, such as education applicants and employers. In addition, the PULSE Project expert expressed proposals for better interaction between regional boards and the country leadership on the provision of educational services for their educational applicants, which may be provided in other regions. In this context the exchange of experience between the regional boards for vocational training is important. At the end of the first working day, the speakers of the working groups presented main achievements on the work of the regional boards for vocational training, which should form the basis of the new Law of Ukraine “On Vocational Training”.

On the next day, Minister of Education and Science of Ukraine Lilia Hrynevych joined the work, and outlined the main priorities of the reform of vocational education in Ukraine. At the end of the conference, the participants discussed the provisions of the new version of the Law of Ukraine “On Vocational Training” regarding the functioning of regional boards and the implementation of the Law of Ukraine “On Education”.

Council of Europe “Decentralisation and Territorial Consolidation in Ukraine Program On October 29 - November 04, 2017, a PULSE Project representative participated in a study tour on local government and public administration to the Kingdom of Spain organised by the Council of Europe Decentralisation and Territorial Consolidation in Ukraine Program in partnership with the Verkhovna Rada Committee on State Building, Regional Policy and Local Self-Governance.

Cooperation with the Swedish-Ukrainian Support for Decentralisation in Ukraine Project On November 06, 2017, during the work of the AUC Public Professional Group within the framework of the Local Government Forum to discuss financing and reforms in the social sector conducted by the Association of Ukrainian Cities within the framework of the USAID PULSE Project, Ayer Seitosmanov, expert of the Swedish-Ukrainian Support for Decentralisation in Ukraine Project, presented the best practices in education management in the regions platform. He also informed about its conveniences.

On November 23, 2017, a PULSE Project expert participated in the All-Ukrainian Conference under the title “Ukraine on the path to the decentralisation in the public education sector” organized by the Swedish- Ukrainian Support for Decentralisation in Ukraine Project, the Ministry of Education and Science of Ukraine and the Ministry of Regional Development, Construction, Housing and Municipal Utilities of Ukraine. During the event, she spoke about the role of the AUC in the preparation of the Law of Ukraine ”On Education”. The expert of the PULSE project emphasized the main advantages of the new Law, in particular those that were not prescribed in the legislation to date. These include the possibility of local governments of different administrative and territorial units to make a joint decision on the organisation aspects of primary, basic and profile secondary education and the provision of transportation services to student, as well as about public-private partnership in the education sector and the possibility of providing education subvention from the National Budget for pre-school and extracurricular activities. In addition, the expert mentioned about the risks including the lack of funding for education, need to harmonise the powers in education management with the autonomy of educational institutions, etc.

Cooperation with UNICEF On November 09 and on November 29 - 30, 2017, a PULSE project expert participated in the working group for the preparation of the implementation of the Child Friendly City Initiative. The Association of Ukrainian Cities was chosen as a key partner in the implementation of the initiative. The Child Friendly City initiative is being implemented by UNICEF and is resuming its activities in Ukraine upon the request of Prime Minister V. Groisman.

Partnership for Every Child On November 09, 2017, a PULSE project expert participated in the work of the expert working group on the elaboration of the Concept of the Integrated Social Protection System. The event was held within the framework of a project organised by the International Partnership for Every Child Charitable Foundation.

95 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project Thanks to the work of the expert, a draft concept of organisation aspects of the provision of social services at the level of CTCs was prepared.

On December 07, 2017, the PULSE Project expert participated in a workshop under the title “Implementation of the integrated system of social protection of the population at the level of consolidated territorial communities” conducted for 40 CTCs from all over Ukraine. The event was held jointly with the Partnership for Every Child upon the request of the Ministry of Social Policy of Ukraine with the support of UNICEF. The expert presented to the united territorial communities the position of the Association regarding the distribution of local government own and delegated powers and powers between state authorities and local governments.

Cooperation with the America House in Kyiv On December 19, 2017, the PULSE Project conducted an All-Ukrainian tutorial on local self-governance in the America House. The speakers were: Executive Director of the Association of Ukrainian Cities Oleksandr Slobozhan, Vice Prime Minister of Ukraine and Minister of Regional Development, Construction Housing, and Municipal Utilities Hennadiy Zubko and Deputy Minister of Education and Science of Ukraine Pavlo Hobzei. The event was attended by students and leaders of school self-government. The tutorial was streamed to 616 schools, that is, to approximately 17,000 students. The news about this tutorial was also posted on the European website of the Council of European Municipalities and Regions Platform.

O. Slobozhan, Executive Director of the AUC, participated in a round table discussion on the implementation of the Road Map for Local Government Reform On November 22, a round table under the title “Strengthening Local and Regional Democracy in Ukraine” organised by the Congress of Local and Regional Authorities of the Council of Europe within the framework of the Promoting the Development of Local Democracy in Ukraine Project and the Council of Europe Action Plan for Ukraine for 2015 - 2017 was held in Kyiv. The event brought together the following participants: members of the delegation of Ukraine to the Congress of Local and Regional Authorities of the Council of Europe, representatives of All-Ukrainian local government associations, as well as non-governmental organisations involved in the implementation of the local government reform in Ukraine. Director of the Congress of Local and Regional Authorities of the Council of Europe J. Bozul opened the round table. Welcoming remarks were delivered by President of the Congress G.Mosler-Thorstrem and the Head of the Ukrainian delegation in the Congress and Secretary of the Kyiv City Council V. Prokopiv. O. Slobozhan, Executive Director of the AUC, made a presentation on the implementation of the Road Map in Ukraine in the context of the post-monitoring dialogue. In particular, he spoke about the issues and opportunities for local and regional authorities within the framework of the local government reform. In addition, O. Slobozhan and representatives of the Congress of Local and Regional Authorities of the Council of Europe discussed the spheres of further cooperation between the Association of Ukrainian Cities and the Congress.

PULSE Project Director participated in the Forum under the title “Decentralisation: Current Status and Development Prospects” On November 23 - 24 in the city of of the Donetsk oblast, the Forum under the title “Decentralisation: Current Status and Development Prospects” took place. The event was organised by the Parliamentary Committee on State Building, Regional Policy and Local Self- Governance with the support from the Council of Europe Decentralisation and Territorial Consolidation in Ukraine Program. The event brought together National Deputies, experts of the Council of Europe, representatives of central state executive authorities, local state administrations, local governments, all-Ukrainian local government associations, civil society, and international partners. Director of the USAID PULSE Project I. Parasyuk spoke about regional development and decentralisation, issues and prospects. He outlined the main issues faced by the state in the area of regional policy and decentralisation reform:  resolving issues related to managing lands outside settlements  establishment of CTCs around oblast center cities  reorganisation (consolidation) of rayons  reform of the administrative and territorial system  approval of the Law on metropolitan areas.

96 October – December, 2017 Eighth quarter of Project implementation The forum participants discussed the current status of the local government reform and reform of territorial arrangement of government institutions in the Donetsk and Luhansk oblasts, improvement of the provision of administrative services, cooperation of territorial communities, and the use of mechanisms of direct democracy. The participants of the event learned about the European experience in the local government reform.

Cooperation with Lumos On November 28, 2017, a PULSE Project expert participated in the all-Ukrainian workshop under the title “Implementation of the first stage of the strategy of reforming the institutional care and upbringing of children for 2017 – 2026” organised by the international Lumos non-governmental charitable organisation with the support of the Presidential Administration. The PULSE Project expert together with the event participants developed a system for reforming children boarding schools.

Cooperation with the International Organisation for Migration On December 07, 2017, a PULSE Project expert spoke at the informational session of the International Organisation for Migration for partner non-governmental organisations dedicated to the development of a unified approach to the updated system of the National Mechanism for Co-Operation of Anti-Trafficking Entities.

USAID Land Management and Community Development Conference On December 14, an AUC expert on land relations participated in the conference under the title “Decentralisation, land management and community development”. The event organisers were the USAID Agrarian and Rural Development Support Project in cooperation with the All-Ukrainian Association of Village and Town Councils. The purpose of the event was to disseminate best practices and universal innovative solutions for the effective use and protection of land in he context of decentralisation, as well as to discuss new opportunities for the development of territorial communities with the involvement of investors. The participants discussed issues related to management of lands outside consolidated territorial communities, in particular: whether communities should be vested with powers to manage lands outside CTCs; whether communities are capable of assuming these powers and what they need to do; and expected results, benefits and risks for communities.

Cooperation with the Canadian Government PLEDDG Project On December 13, the AUC Communications Manager participated in the workshop under the title “Challenges and success factors in the process of local change”. The event was organised by the Partnership for Local Economic Development and Democratic Governance (PLEDDG) Project implemented by the Federation of Canadian Municipalities (FCM) with the financial support from the Canadian Ministry of International Affairs. The training was conducted by a FCM senior knowledge communications advisor Pascal Lavois. The event participants reviewed the best practices in the sphere of municipal development and discussed practical strategies that will ensure the long-term success of the projects and initiatives they implement. The main topics of the training included branding and marketing of territories and women entrepreneurship.

On November 28 - 29, 2017, the International Mayors Summit took place in Kyiv. The forum was dedicated to innovations and their impact on cities. About 100 Ukrainian mayors, foreign experts and local government leaders from Canada, Israel, Slovakia, Brazil, Sweden, the United Kingdom and the Netherlands participated in the Forum. The International Mayors Summit was conducted under the patronage of Prime Minister of Ukraine V. Groisman and with the support from Kyiv Mayor V. Klychko and the Association of Ukrainian Cities. The partners were: VISA, DataGroup, KyivStar, Deloitte Ukraine, Association of Energy Efficient Cities of Ukraine (AEECU), Partnership for Urban Development Project, and Partnership for Local Economic Development and Democratic Governance (PLEDDG Project).

Section 6. SUGGESTED PLAN OF ACTIVITIES FOR THE COMING QUARTER

ER 1: Decentralisation enabling legislation reflects local government input

- Drafting legislation

97 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project - Legislation monitoring - Providing consultations for local governments on legislation application - Participation in the work of parliamentary committees - Conducting working sessions of regional policy dialogue platforms - Participation in meetings of the Cabinet of Ministers - Cooperation with line ministries - Participation in meetings of sectoral working groups - Preparation of the annual edition of the Local Self-Governance in 2017 report - Conduct meetings of AUC Land Resource, Local Finance and Personnel Professional Groups

ER 2: Resources under local self-governance authority increased - Formation of a system of social standards and norms of financial sufficiency in the sectors of public education, health care and social protection - Continuation of the work on the Municipal Fiscal Register - Conducting training on strategy development for CTCs

ER 3: Capacity of stakeholders increased - Conducting regional legislation application laboratories - Conducting expert workshops for rayon and oblast councils (in cooperation with UAROC) - Conducting replication visits within the “Itinerary of Successes” Project component - Information support for pilot libraries, work with press clubs and reform support groups (in cooperation with IREX) - Developing products for media - Dissemination of information messages - Preparation, publication and presentation of the “Book of Successes”, “Best Practices” and the Annual “Local Self-Governance in 2017” Report

98 October – December, 2017 Eighth quarter of Project implementation

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119 QUARTERLY REPORT for the Policy for Ukraine Local Self-Governance (PULSE) Project

Annex В.

Detailed information about regional legislation application laboratories in AUC ROs

Date, venue and participants Topic Information about the event October 06, 2017 Application of urban The event moderator provided an overview Dnipropetrovsk AUC RO development legislation. changes in the local government powers in the city of Dnipro Organisational aspects of sphere of architectural and construction control the implementation of and mechanisms to set up new local entities for Participants: chairmen of city powers in the sphere of architectural and construction control. He also councils and CTCs, directors of architectural and presented the activities of the Departments for departments for urban construction control architectural and construction control of the development and architecture, City Council. directors of departments for The event participants became familiar with the architectural and construction peculiarities of promoting the barrier free access control of city councils, and land for persons with disabilities and low mobility surveyors from CTCs. groups of citizens to social, engineering and transportation infrastructure facilities. October 10, 2017 Setting up and The event moderator provided an overview of Khmelnytskyi AUC RO organisational aspects of the regulatory and legislative framework city of Khmelnytskyi activities of local governing the activities of CTCs. The participants governments discussed the peculiarities of the formation of Participants: village, town and CTC budgets. They also engaged in an active city mayors, their deputies, and discussion of the subordination mechanisms for CTC mayors. different entities within the CTC council. The event moderator provided a number of hands-on recommendations no how to establish the structure of local government entities in a consolidated community, in particular, about not very popular but very much needed decisions to consolidate starosta districts, setting up technical support units, etc. October 11, 2017 Peculiarities of the The event moderator provided an overview of Zhytomyr AUC RO formation and the main directions of the budgetary policy for city of Zhytomyr implementation of budgets 2018 and familiarised the audience with the in CTCs. Effective problem issues of the formation of the revenue Participants: chairmen of village, management of Financial and expenditure parts of local budgets. town and city councils, directors resources. Performance The moderator also spoke about the main of departments (directorates, program budgeting aspects of authorities of local finance sectors) of finance of local departments in the part dealing with the councils and CTCs. implementation of local budgets. The participants engaged in the discussion of the problem issues of the formation of the revenue and expenditure part of local budgets. The event moderator also provided recommendations on how to prepare local budgets and control their subsequent implementation. October 13, 2017 Peculiarities of the The event moderator familiarised the Lviv AUC RO formation and participants with the peculiarities of the budget city of Lviv implementation of the CTC legislation. budget. Effective She provided a step-by-step explanation of the Participants: city mayors, their management of financial process for the preparation of draft local budgets deputies, and directors of resources and focused the attention of the audience on the services for finance and peculiarities of the formation of local budgets. accounting of CTCs. The moderator provided an overview of the steps to take to support local government entities and facilities in the social sector and sector of culture in CTCs. The event moderator also provided recommendations of what next steps to take to prepare CTC budgets and presented the main

120 October – December, 2017 Eighth quarter of Project implementation

tasks to be accomplished by the end of the budget year. October 17, 2017 Local government powers The event moderator provided an overview of Vinnytsya AUC RO in the sphere of amendments in the legislation governing labour city of Vinnytsya compliance with the labour and employment as a tool to prevent corruption, legislation described types of responsibilities of government Participants: deputy city mayors, officials, mechanisms to hire and dismiss them, secretaries of local councils, as well as peculiarities of resolving conflicts of specialists of personnel interests. departments, and labour The moderator presented to the participants the inspectors. main aspects of conducting special inspections and regular inspections in accordance with the Law of Ukraine “On Purification of Power in Local Governments”. The event participants engaged in an active discussion of competitive selection, internship and capacity building and training of local government officials. October 17, 2017 Effective management of The event moderator provided an overview of Donetsk AUC RO the housing stock. Setting the regulatory and legislative framework city of Kostyantynivka up and running governing the sector of housing and municipal condominium associations utilities, as well as the current status of the Participants: deputy city mayors, implementation of reforms in the sector of directors and specialists of housing and municipal utilities. departments and structural units The moderator explained the details of the for housing and municipal utilities mechanism and main steps to establish of local councils, and directors of condominium associations and to convene the condominium associations. meeting of founders of condominium associations. The event participants learned about the peculiarities of the introduction of energy efficiency projects and technologies in condominium associations, “Warm Loan” Program implementation, writing projects for thermal insulation of buildings, and improvements of territories adjacent to residential buildings. October 18, 2017 Application of urban The event moderator provided an overview of Ivano-Frankivsk AUC RO development legislation. the current legislative framework in the sphere of city of Ivano-Frankivsk Organisational aspects of urban development and highlighted the main the implementation of aspects of territorial planning at the regional and Participants: chairmen of city powers in the sphere of local levels. councils, deputy CTC mayors, architectural and The moderator focused the attention on the directors and specialists of construction control procedure for transferring powers in the sphere departments for urban of architectural and construction control to local development and architecture. governments. The event participants received the information and practical recommendations about permit procedures in the sphere of the state architectural and construction control, learned about the control and oversight functions in this sphere and became familiar with types of urban development documents. October 19, 2017 Peculiarities of the The event moderator familiarised the Poltava AUC RO formation and participants with the details of the legislative city of Poltava implementation of budgets framework governing the budget process at the in CTCs. Effective local level. The participants studied the sequence Participants: chairmen of city management of Financial of the preparation, implementation and councils and CTCs, directors and resources. Performance monitoring of budgets of consolidated specialists of budget departments program budgeting communities and inter-budget transfers. The of city councils and CTCs. event participants learned the main aspects of

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the application of performance program budgeting in the budget process. The event moderator highlighted the methodology for the application a new formula to calculate the education subvention. The moderator also provided detailed methodological recommendations for the preparation and calculation of local budgets for 2018 in consolidated territorial communities. October 19, 2017 Application of urban The event moderator highlighted the peculiarities Zakarpattya AUC RO development legislation. of the legislative framework in the sphere of city of Uzhgorod Organisational aspects of urban development and its hands-on application. the implementation of The event participants became familiar with the Participants: city and town powers in the sphere of main and typical problems local governments mayors, their deputies, directors architectural and face in the course of the preparation of urban and specialists of departments for construction control development documents at the local level. architecture and urban The moderator highlighted the details of the development of city and town procedure of transferring powers in the sphere of councils. architectural and construction control to the local level and outlined the main problems arising in the course of such transfer. The moderator offered a presentation about the main principles and recommendations for the barrier free access to infrastructure facilities for persons with disabilities and low mobility groups of population. October 20, 2017 Peculiarities of the The event moderator highlighted the practical Zaporizzhya AUC RO formation and aspects of the formation of the revenue part of city of Zaporizzhya implementation of budgets local budgets, local government powers in setting in CTCs. Effective local taxes and fees, and granting preferences on Participants: CTC mayors, management of Financial tax payments. The moderato paid special directors and specialists of resources. Performance attention to the preparation of budget requests departments for budget and program budgeting by main spending units. finance of CTCs. The moderator highlighted the mechanism for the formation and implementation of CTC budgets according to the performance program budgeting method. The training event participants discussed the main problem issues arising in the course of the implementation of budgets and at the planning phase. October 20, 2017 Local government powers The event moderator provided an overview of Volyn AUC RO in the sphere of the current regulatory and legislative framework city of Lutsk compliance with the labour governing labour relations. legislation The training participants studied the mechanisms Participants: city and town for exercising state oversight of compliance with mayors, CTC mayors, directors the labour legislation and received answers to and specialists of line the questions about compliance with the labour departments of city and town legislation. The event participants received councils. exhaustive explanation of rights and duties, including procedure, granted to labour inspectors working in local government entities. October 23, 2017 Local government powers The event moderator provided an overview of Cherkasy AUC RO in the sphere of the main regulatory and legislative framework city of Cherkasy compliance with the labour governing labour issues. legislation The participants discussed the powers of Participants: deputy chairmen of executive agencies of city councils and CTCs in local councils and CTCs and exercising control of compliance with the labour specialists of CTC council and employment legislation. departments on labour The moderator told about the mechanisms for legislation. the state oversight of compliance with the labour

122 October – December, 2017 Eighth quarter of Project implementation

legislation, as well as about penalties for violation of the labour legislation. The training event participants also received explanations about how to apply the provisions of laws and regulations. October 24, 2017 Application of urban The event participants discussed and learned the Lviv AUC RO development legislation. main requirements of the regulatory and city of Lviv Organisational aspects of legislative framework governing the sector of the implementation of urban development and architectural and Participants: city mayors, deputy powers in the sphere of construction control. city mayors, and directors and architectural and The participants became familiar with the hands- specialists of departments for construction control on aspects of receiving permit documents and housing and municipal utilities, commissioning finished construction objects. The architecture and urban moderator provided recommendations about the development. step to take to receive permit documents, as well as familiarised the audience with the ways to protect the rights and legitimate interests of urban development entities in the course of the а state architectural and construction control. The training event participants became familiar with the principles of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. October 26, 2017 Local government powers The event participants studied the details of the Poltava AUC RO in the sphere of legislative framework governing labour relations. city of Poltava compliance with the labour The event moderator outlined main violations of legislation the labour legislation and the corresponding Participants: chairmen of city accountability. councils and CTCs, their deputies, The moderator provided detailed technical and specialists of personnel recommendations about the mechanisms to set departments. up a structural unit to exercise oversight of labour legislation, or to introduce a position of the labour inspector. The training event moderator explained how to exercise state oversight of compliance with the labour legislation and discussed specific issues arising in the course of exercising this control function. October 26, 2017 Peculiarities of the The training event participants became familiar Ternopil AUC RO formation and with the key provisions of the budget policy and city of Ternopil implementation of budgets practical recommendations on how to prepare in CTCs. Effective draft local budgets. Participants: city and town management of Financial The participants studied the peculiarities of the mayors, their deputies, directors resources. Performance formation of budget and inter-budget transfer of financial departments, their program budgeting indicators for the coming year. deputies, chief bookkeepers, and The event moderator provided the details of the chief specialists of budget procedure for the preparation, discussion and departments of city and town approval of local budgets, as well as the problem councils. arising in the course of the application of performance program budgeting to local budgets. The training participants also engaged in the discussion of the status of the implementation of local budgets in 2017 as compared with the corresponding period of 2016. October 26, 2017 Improving energy The event moderator provided an overview of Luhansk AUC RO efficiency of buildings: the main provisions of the legislation governing city of Severodonetsk effective municipal energy energy efficiency. management, energy The moderator outlined the goal and tasks of Participants: city mayors, deputy monitoring, performing energy management, better efficiency of energy

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city mayors, and directors of line energy audits, and thermal use, energy management system, its functioning, departments of city and village insulation of buildings monitoring of energy use, and organisational councils. aspects of energy monitoring. The training event participants became familiar with the responsibility of the municipal energy manager, and rules and format for the preparation of the energy monitoring report. The training event participants engaged in an active discussion on the practical use of an effective municipal energy management. October 26, 2017 Application of urban The event moderator dwelt on the peculiarities Mykolaiv AUC RO development legislation. of the legislative framework governing the city of Mykolaiv Organisational aspects of architectural and construction control. the implementation of The participants learned how to prepare master Participants: village, town and powers in the sphere of plans of populated areas and to control the city mayors, CTC mayors, architectural and quality of construction works. directors of departments and construction control The moderator told the audience about the officials in charge of exercising mechanisms to transfer powers in the sphere of local government powers in the architectural and construction control to local sphere of architectural and governments. construction control. The training event participants discussed how to promote the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. October 26, 2017 Effective management of The event moderator familiarised the Kharkiv AUC RO the housing stock. Setting participants with the current legislative city of Kharkiv up and running framework. condominium associations The training participants discussed the current Participants: village, town and status of reforms in the sector of housing and city mayors, CTC mayors, municipal utilities in the context of statistical directors of condominium data. associations, and local council The moderator focused the attention of the secretaries. audience to the implementation of energy efficiency projects and introduction of technologies in condominium associations, “Warm Loans” Program, preparation of projects for thermal insulation of buildings, and improvements of territories adjacent to buildings. The training event participants discussed stages for the preparation of energy profiles for buildings, preparation of projects for thermal insulation of residential buildings, and improvements of territories adjacent to buildings. October 30, 2017 Local government powers The event moderator provided an overview of Chernivtsi AUC RO in the sphere of the regulatory and legislative framework city of Chernivtsi compliance with the labour governing the protection of labour rights. legislation The moderator familiarised the audience with the Participants: village, town and peculiarities of competitive selection, in city mayors, CTC mayors, deputy particular, with the procedure to prepare and city mayors, secretaries of local conduct competitive selection for vacant councils, and directors of positions in CTCs. personnel departments of CTCs. The moderator paid attention to problem issues of local government powers in the sphere of state oversight of compliance with the labour legislation. The training event participants studied the step- by-step mechanism to guarantee labour rights for officials working in local government structural

124 October – December, 2017 Eighth quarter of Project implementation

departments. October 31, 2017 Community budgets. The event moderator spoke about amendments Kyiv AUC RO Increasing efficiency of in the budget legislation, provided an overview of city of Kyiv management of local the current status of the implementation of local budget expenditures budgets in the oblast in the current year, as well Participants: deputy city mayors as the main approaches to the formation of local on economic issues, directors and budgets for 2018 and the forecast for 2019 - specialists of financial 2020. departments, and directors of The participants studied the specific examples of public sector institutions of preparation of budget requests and budget consolidated territorial program profiles for public education and art communities and potential CTCs. schools. The training event participants engaged in an active discussion of the issues arising today in the course of the budget process, in particular, the possibility of increasing statutory capital and repayment of the difference in tariffs of a municipal utility company without the expert opinion of the Anti-Monopoly Committee, and performing repairs and reconstruction of roads of national significance. November 02, 2017 Regulatory and legislative The event moderator provided an algorithm for Kherson AUC RO framework for the the preparation of data to be entered into the city of Kherson activities of consolidated state register of legal persons, the materials of territorial communities the initial session, and draft ordinances on the Participants: CTC mayors, their main issues. deputies, and directors of line The participants received detailed consultations departments of CTCs. about how to take inventory and to transfer property rights, as well as detailed instructions on how to take inventory and a sample of the tern-over document. The moderator familiarised the audience with the staffing and organisational aspects of the work of executive bodies of the consolidated community. The training event participants also discussed problem issues of the preparation of community budgets. November 07, 2017 Community budgets. The event moderator provided an overview of Zakarpattya AUC RO Increasing efficiency of the main provisions of the current budget city of Uzhgorod management of local legislation and the principles of performance budget expenditures program budgeting. Participants: chairmen of city and The participants studied the phases of the budget town councils and CTCs, directors process, learned about who is responsible for the and specialists of financial implementation and timeframe, as well as the departments of city and town legislative framework. councils and CTCs. The moderator pointed the attention to the main principles of the formation of the revenue and expenditure parts of local budgets and inter- budget transfers. The training event moderator outlined the main problem issues of local budgets in the oblast arising foe to the lack of financial resources to pay salaries to employees in the public sector. November 07, 2017 Organisational aspects of The event moderator focused the attention of Ivano-Frankivsk AUC RO activities of new the mechanisms for conducting initial sessions in city of Ivano-Frankivsk consolidated territorial CTCs, overall session scenario, by-laws, and communities personnel issues. Participants: CTC mayors, The participants learned about the peculiarities secretaries of CTC center of the formation of the structure of the executive settlements, and directors of line entity of the CTC and the content of regulatory departments of CTCs. and legal documents they should use while

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establishing the structure of their CTCs. The training event participants became familiar with the mechanisms to register a CTC and close down the activity of villages councils, which have consolidated, mechanisms to close down Fiscal Year 2017, preparation of draft CTC budgets for 2018, and with how to open treasury accounts. November 08, 2017 Application of urban The event moderator familiarised the audience Chernihiv AUC RO development legislation. with the requirements of regulations for setting city of Chernihiv Organisational aspects of up entities for state architectural and the implementation of construction control within local governments Participants: village, town and powers in the sphere of and for transferring the corresponding powers to city mayors, deputy city mayors, architectural and the local level. directors of departments for construction control The participants became familiar with the phases urban development, architecture, for the formation of local government entities for construction and municipal state architectural and construction control as a utilities of city and town councils. separate legal person. The moderator provided practical recommendations on how to apply amendments to the legislation governing urban development. The training event moderator stressed the importance of ensuring barrier free access to facilities for persons with disabilities. November 16, 2017 Application of urban The event moderator briefed the audience with Kirovohrad AUC RO development legislation. the legislative framework for urban development city of Organisational aspects of and its content. the implementation of The participants studied the details of the Participants: village, town and powers in the sphere of procedure for the preparation of urban city mayors, CTC mayors, their architectural and development document packages, public deputies, directors and specialists construction control discussions, consideration of such documents at of structural departments for architecture and urban development boards, and urban development and its approval. architecture. The moderator told the participants about the mechanisms for transferring powers in the sphere of the state architectural and construction control to local governments. The training event participants discussed problem issues of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. November 17, 2017 Local government powers The moderator provided an overview of the main Dnipropetrovsk AUC RO in the sphere of amendments to the legislation governing the city of Dnipro compliance with the labour local government powers in the sphere of the legislation labour legislation. The moderator presented the Participants: deputy city mayors materials dealing with the procedures for local and CTC mayors, secretaries of governments to exercise powers. local councils, and directors and The participants learned about the outcomes of specialists of departments for steps towards de-shadowing wages and labour of local councils and CTCs. legalisation of jobs in the oblast. The training event participants expressed special interest in the information about the work of the Labour Inspectorate in the city of Dnipro. November 21, 2017 Documenting managerial The event moderator spoke about provisions of Kyiv AUC RO information in local the legislation and national standards of city of Kyiv governments and state documenting managerial information. executive authorities The moderator familiarised the audience with the Participants: secretaries of requirements for local governments to prepare village, town and city councils and draft ordinances. CTCs and specialists of general The moderator focused the attention on the

126 October – December, 2017 Eighth quarter of Project implementation

departments of local councils. implementation of e-governance and adaptation of public management to the needs of the information society. The training event participants also became familiar with the requirements for preparing the documents reflecting the information about managerial actions. November 22, 2017 Peculiarities of the The event moderator familiarised the audience Mykolaiv AUC RO formation of budgets in with amendments to the current legislation and city of Mykolaiv CTCs for 2018. Increasing the approaches to the formation of local budgets the efficiency of for 2018. Participants: town and village management of local The participants received exhaustive information mayors, officials responsible for budget financial resources about the peculiarities of the formation of the the formation and revenue and expenditure parts of CTC budgets implementation of budgets in for 2018. village and town CTCs. The moderator focused the attention of the audience on the peculiarities of making calculations to draft local budgets. The training event participants became familiar with the procedure, stages and timeframe for the preparation of budget requests and profiles of budget programs prepared by main spending units. November 22, 2017 Legislative framework and The event moderator briefed the audience with Odesa AUC RO peculiarities of the the requirements of the legislation governing the city of Odesa formation of local budgets formation of local budgets for 2018, its for 2018 peculiarities and practical aspects of the approval Participants: city mayors, their of local budgets by local governments. deputies, specialists of finance The participants learned about the peculiarities departments, finance and of the formation of local budgets in the context economy experts from of oblast and rayon budgets, rayon significance departments of local councils. cities, and CTCs. The moderator provided the information about the main inter-budget transfers and their amounts in 2018. The training event moderator dwelt on the main issues of expenditure categories transferred from the National Budget to the local level. November 22, 2017 Local government powers The event moderator briefed the audience about Donetsk AUC RO, in the sphere of the legislative framework and new provisions of city of Kostyantynivka compliance with the labour the Labour Code of Ukraine. legislation The moderator focused the attention on the new Participants: deputy city, village powers local governments have received in the and CTC mayors and directors sphere of exercising oversight of compliance with and specialists of departments for the legislation on labour and employment. The labour and social protection. event participants learned about the mechanisms to exercise the state control and state oversight of compliance with the labour legislation. The training event participants shared their opinions about the functional duties of labour inspectors. They also engaged in the discussion about how to effectively use the new powers in the sphere of compliance with the labour legislation as a tool to increase the revenue flow to community budgets and to reduce shadow economy. November 23, 2017 Local government powers The event moderator familiarised the Khmelnytskyi AUC RO, in the sphere of participants with the regulatory and legal city of Khmelnytskyi compliance with the labour documents outlining the powers of local legislation governments in the sphere of compliance with Participants: chairmen of city and the labour legislation.

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CTC councils and directors of The moderator focused the attention on the personnel departments of local peculiarities and accountability for violations of councils and CTCs. labour legislation. The moderator focused special attention on the requirements for candidates for labour inspectors and their job descriptions. The training event moderator explained the peculiarities of oversight and control of compliance with the labour legislation. November 23, 2017 Effective performance of The event moderator familiarised the Sumy AUC RO the sector of housing and participants with amendments in the legislation city of Sumy municipal utilities. governing the work of the sectors of housing and Organisational aspects of municipal utilities. Participants: chairmen of village, the provision of high The training participants learned about the town and city councils and CTCs quality housing and powers of local governments in setting and councils and directors and municipal utility services approving tariffs for housing and municipal utility specialists of departments for services. The participants shared their experience housing and municipal utilities of in modernisation and technical equipment of the local councils and CTCs. sector in the context of modern energy efficiency technologies. The training event moderator paid special attention to loans for energy efficiency projects and purchase of utility equipment. November 23, 2017 New provisions of the The event moderator provided an overview of Ternopil AUC RO, legislation governing amendments to the legislation governing the city of Ternopil housing sock management work of the sector of housing and municipal and solid waste utilities and solid waste management. Participants: village, town and management On a particular note, the moderator focused the city mayors, deputy mayors, and attention on peculiarities of managing apartment directors of technical blocks. departments/directorates/utility The training event moderator shared the companies. experience of the city of Ternopil in managing its housing stock and in solid waste management. The participants also shared their opinion about how cities will be prepared to sot waste in 2018. November 24, 2017 Health care services in The event moderator provided an overview of Luhansk AUC RO CTCs. Formation of the the regulatory and legislative framework city of Severodonetsk health care infrastructure governing the provision of primary health care and sanitary assistance to population residing on Participants: city mayors, deputy the territory of CTCs. mayors, directors of line The participants discussed problem issues and departments and directorates of future prospects of the formation of the network local councils. of health care institutions in consolidated communities. The training event participants studied the main stages of the formation of the network of health care institutions and legislative framework for labour relations in the context of reformed health care system at the rayon and CTC level. November 28, 2017 Local government powers The event moderator familiarised the Kyiv AUC RO in the sphere of participants with amendments to the labour city of Kyiv compliance with the labour legislation. legislation The participants learned about the peculiarities Participants: village, town and of setting up executive agencies of local councils city mayors, CTC mayors and of oblast significance, as well as executive entities directors and specialists of of village, town and city consolidated territorial personnel departments of local communities, which will be charged with the councils. responsibility of exercising state control of compliance with labour legislation. The training event moderator focused the attention of the fact that the public awareness

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work with employers is the top priority for the executive agencies charged with the responsibility of exercising state control of compliance with the labour legislation. November 28, 2017 Experience in application of The event moderator spoke about the main Kharkiv AUC RO labour legislation in local changes in the labour legislation in the context of city of Kharkiv governments local government powers. The moderator provided an overview of all types of labour Participants: village, town and agreements and dwelt upon certain issues city mayors, CTC mayors, related concluding, braking off and prolongation directors and officials of of labour agreements. personnel departments of local The training event participants studied the main councils. types of responsibility of officials, peculiarities of conflict of interest solutions, making personnel decisions in the course of the reorganisation. November 29, 2017 Application of urban The event moderator familiarised the Volyn AUC RO development legislation. participants with the urban development city of Lutsk Organisational aspects of legislation and regulatory documents on urban the implementation of development. Participants: city and town powers in the sphere of The participants received recommendations on mayors, directors and specialists architectural and how to prepare various level urban development of line department and construction control documents, approve it and use it in the every day directorates of city councils. work. The event moderator stressed the importance of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. November 30, 2017 Peculiarities of setting up a The event moderator provided a detailed Cherkasy AUC RO system of social protection overview of the legislation governing local Village of Bilozirya in CTCs government powers in the sphere of social protection in CTCs. Participants: CTC mayors, deputy The moderator dwelt upon the notion of the mayors and council secretaries, integrated system of social services in the and specialists of executive community. agencies of CTCs working in the The event participants learned about the various sector of social protection. models for administering the provision of social protection services and the integrated model for the provision of social services in CTCs. The event moderator presented the experience of providing social services in the Bilozirska CTC. December 01, 2017 Local government powers The event moderator provided an overview of Zhytomyr AUC RO in the sphere of the legislative, legal and administrative city of Zhytomyr compliance with the labour documents governing the oversight of legislation compliance with the labour and employment Participants: chairmen of village, legislation. town and city councils, directors The moderator spoke about the state oversight of departments and directorates and control of local government compliance with for human resources of city the labour legislation. councils. The event participants shared their experience in legalisation of salaries and employment, as well as shared their materials, in particular on setting up various working groups. December 07, 2017 Local government powers The event moderator provided an overview of Zakarpattya AUC RO in the sphere of amendments in the labour legislation. city of Uzhgorod compliance with the labour The participants learned about the main legislation functions and powers to be exercised by the Participants: village, town and Department for Labour, as well as the powers city mayors, and directors of delegated to local governments in the sphere of human resource departments of compliance with the labour legislation. city councils. The moderator paid special attention to the

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requirements for candidates for the position of the labour inspector and his/her job responsibilities. The event moderator also spoke about the types of accountability for violations of the labour legislation. December 08, 2017 Hands-on application of The event moderator provided a detailed Volyn AUC RO the legislation in the overview of the legislation governing the social city of Lutsk sphere of social protection protection sector. The participants learned about the peculiarities Participants: village, town and of activities aimed at the implementation of the city mayors, CTC mayors, and state policy in the sphere of social protection. representatives of departments The participants received technical and directorates for social recommendations about the peculiarities of protection of local councils. setting up local government departments on social protection, how they should work according to the one-stop-shop principle, and how to organise appointments for citizens. December 08, 2017 Peculiarities of setting up a The event moderator provided an overview of Chernivtsi AUC RO system of social protection the legislation governing the local government city of Chernivtsi in CTCs powers in the sphere of social protection and protecting the rights of children. Participants: city and town The participants studied the algorithm of steps mayors, CTC mayors, deputy city the local government department in charge of mayors, and directors of protecting the rights of children has to take. departments for social protection The event participants also learned about the in CTCs. peculiarities of administrative and organisational aspects of making citizen appointments in local governments at the place of their residence. December 12, 2017 Effective performance of The event moderator familiarised the Vinnytsya AUC RO the sector of housing and participants with amendments in the legislation city of Vinnytsya municipal utilities. governing the sector of housing and municipal Organisational aspects of utilities. Participants: deputy city and the provision of high The moderator also spoke about the mechanisms town mayors, experts of quality housing and to introduce energy management in departments for housing and municipal utility services municipalities, energy certification / inventory of municipal utilities, and directors buildings, and the daily energy consumption of utility companies in monitoring system. communities. The event participants learned about the peculiarities of licensing certain types of commercial activities in the sector of centralised heat and water supply and sewerage. December 12, 2017 Local government powers The event moderator provided an overview of Mykolaiv AUC RO in the sphere of amendments to the labour legislation. city of Mykolaiv compliance with the labour The moderator put emphasis on the powers of legislation local governments to exercise oversight of Participants: chairmen of village, compliance with the labour legislation. The town and city councils, CTC moderator spoke in detail on the types of mayors, directors of department violations of the labour legislation and for human resources of city mechanisms for imposing fines. councils and CTCs. The event participants discussed the steps local governments have to take to introduce the position of labour inspector in their payrolls and the scope of powers of this local government official. December 12, 2017 Hands-on application of The event moderator spoke about the main Sumy AUC RO the legislation in the amendments in the legislation governing public city of Sumy sphere of public procurement. procurement. The ProZorro The event participants discussed the meaning Participants: village, town and system and phases of public procurement. city mayors, their deputies, and The moderator also presented unified state

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CTC mayors. registers and the ProZorro system. The event moderator presented the options of information search resources public procurement organisers may use as the reliable database for their work. December 15, 2017 Community budgets. The event moderator familiarised the audience Dnipropetrovsk AUC RO Increasing efficiency of with the main provisions and amendments in the city of Dnipro management of local budget legislation. budget expenditures The moderator also provided an overview of the Participants: deputy city mayors, main indicators used during the preparation of CTC mayors, directors of the National Budget for 2018 in the part dealing departments (directorates) for with local budgets and inter-budget relations. economy and finance of city The event participants studied the peculiarities of councils. the formation of local budgets and phases to implement local budgets. December 15, 2017 Application of urban The event moderator provided a detailed Zaporizzhya AUC RO development legislation. overview of the system of urban development city of Zaporizzhya Organisational aspects of documents and the legislative framework. The the implementation of moderator also stressed the importance of the Participants: deputy city and powers in the sphere of preparation of master plans of territories of town mayors, architects of city architectural and populated areas, detailed outline maps of and town councils, and directors construction control territories with due regard to local peculiarities. of line departments and The event participants received directorates. recommendations on how to put together urban development document packages at various levels. The participants also discussed the importance of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. December 15, 2017 Peculiarities of the The event moderator familiarised the audience Volyn AUC RO preparation and with the main amendments to the budget city of Lutsk implementation of local legislation and peculiarities of the budget process government and CTC in 2018. Participants: village, town and budgets. Effective The participants discussed the application of city mayors, CTC mayors, and management of financial performance program budgeting method, directors of line departments and resources preparation of profiles of budget programs, and directorates. the use of expenditure program classification codes. The event participants received recommendations regarding the main tasks of the formation of local budgets, preparation of local programs, and using the financial resources of the National Budget and oblast budget. December 15, 2017 Public governance: The event moderator presented the legislative Zhytomyr AUC RO documenting managerial framework to work with citizen electronic city of Zhytomyr activities and making its applications and electronic petitions. public, access to public The moderator stressed the importance of Participants: secretaries of city information and electronic principles of transparency, openness and councils, directors and specialists petitions accountability for good governance. of organisational departments, The event participants shared their experience in document turnover and hands-on application of the legislation on citizen personnel policy of city councils. appeals and main requirements to the preparation and formatting documents. The participants also trained to model their responses to citizen appeals and electronic petitions. December 15, 2017 Local government powers The event moderator familiarised the audience Kirovohrad AUC RO in the sphere of with the regulatory and legislative framework city of Kropyvnytskyi compliance with the labour governing the labour legislation and regulations

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legislation stipulating the accountability for violating the Participants: village, town and labour legislation. city mayors, CTC mayors, their The participants studied the steps government deputies, directors and specialists institutions have to take to exercise oversight of of personnel departments. labour legislation. The event participants also discussed the real case situations arising in the course of oversight of labour legislation. December 15, 2017 Local government powers The event moderator reviewed the main Rivne AUC RO in the sphere of amendments in the labour legislation. city of Ostroh compliance with the labour The moderator also provided technical legislation recommendations for local governments how to Participants: city and town exercise their delegated powers in the sphere of mayors, chief executives, deputy the state control of compliance with the labour town mayors, and local council legislation. secretaries. The event participants became familiar with the working materials of the department for personnel policy of the Ostroh City Council. The participants also discussed the details and peculiarities of mechanisms to hire and dismiss local government officials. December 20, 2017 Community budgets. The event moderator focused the attention of Chernivtsi AUC RO Increasing efficiency of the audience on the requirements of the current city of Chernivtsi management of local legislation for the preparation and budget expenditures implementation of local budgets. Participants: city ad town In the course of the training event, the mayors, CTC mayors, deputy city participants discussed the peculiarities of the mayors, local council secretaries, preparation of the expenditure part of local and directors of financial services budgets, in particular with the help of the of local councils. performance program budgeting method. The event moderator described the step-by-step algorithm for the preparation and implementation of local budgets for 2018. December 20, 2017 Hands-on application of The event moderator provided an overview of Odesa AUC RO the legislation in the the regulatory and legislative framework in the city of Odesa sphere of social protection sector of social protection. at the local level The moderator also explained how to provide Participants: directors and integrated social services and apply performance specialists of departments for program budgeting method for ensuring social labour and social protection of guarantees. local councils and CTCs The event moderator provided a number of examples of best practices of the implementation of the social policy at the local level. The event participants engaged in a lively discussion of problem issues of the implementation of social policy at the local level. December 20, 2017 Application of urban The event moderator provided an overview of Cherkasy AUC RO development legislation. the main amendments in the urban development city of Cherkasy Organisational aspects of legislation. the implementation of The moderator also focused on the necessity of Participants: deputy city and powers in the sphere of preparation of master plans for populated areas. town mayors, architects of city architectural and The event participants received professional and town councils, directors of construction control recommendations on how to put together urban departments and directorates for development document packages at various urban development and levels, get them approved and use them in the architecture. daily work. The event moderator stressed the importance of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure.

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December 21, 2017 Pension reform: The event moderator provided an overview of Kharkiv AUC RO application of pension the pension legislation and spoke in detail about city of Kharkiv legislation and service in the pension reform and its phases in 2018 - 2019. local governments The moderator also provided explanations of Participants: deputy city and how to provide pension fund services to citizens town mayors, architects of city in the Center for Administrative Services working and town councils, and directors in the transparent-office format. of departments and directorates The event participants became familiar with the for urban development and information about reporting and personalised architecture. registration in the system off mandatory national pension insurance. The participants also learned about the peculiarities of the calculation of pensions in the context of the new pension legislation. December 21, 2017 Local government powers The event moderator presented amendments in Ternopil AUC RO in the sphere of the labour legislation, in particular in the part city of Ternopil compliance with the labour dealing with the oversight of compliance with the legislation labour legislation. Participants: city and town The moderator also dwelt upon the peculiarities mayors, their deputies, and of the state oversight and control of compliance directors of line with the labour legislation. departments/directorates. The moderator familiarised the audience with the powers of labour inspectors and the rights of employers in the course of the state control of compliance with the labour legislation. The moderato also presented the main types of accountability for violations of the labour legislation. December 22, 2017 Application of urban The event moderator presented the main Khmelnytskyi AUC RO development legislation. amendments in the urban development city of Khmelnytskyi Organisational aspects of legislation, in particular the decentralisation in the implementation of the sphere of state architectural and construction Participants: city and town powers in the sphere of control. mayors, architects of city and architectural and The moderator also spoke in detail about the town councils, and directors of construction control state oversight of compliance with the legislation departments and directorates for governing urban development, design document urban development. packages, construction standards, state rules and regulations. The event moderator stressed the importance of promoting the barrier free environment and access for persons with disabilities and low mobility groups of population to social, engineering, and transportation infrastructure. December 22, 2017 Application of urban The event moderator provided an overview of Donetsk AUC RO development legislation. the legislative framework governing urban city of Organisational aspects of development, the implementation of The participants learned about the peculiarities Participants: city mayors and powers in the sphere of of powers in the sphere of state architectural and specialists of departments for architectural and construction control they received in the context urban development and construction control of decentralisation. architecture. The moderator also presented the detailed territory map for urban development purposes using the city of Sloviansk as an example. The event moderator described in detail the main requirements for premises both in the residential and in the public and industrial sectors for comfortable environment for persons with disabilities. December 22, 2017 Local government powers The event moderator dwelt on the state Chernihiv AUC RO in the sphere of oversight and control of compliance with the city of Chernihiv compliance with the labour labour legislation.

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legislation The participants became familiar with the job Participants: city and town responsibilities of local government officials in mayors, their deputies, and charge of the state oversight of compliance with directors of line departments and the labour legislation. directorates. The moderator also stressed the importance of setting up the corresponding labour inspectorate departments in the context of decentralisation and presented the examples how such entities work in other cities. December 26, 2017 Application of the The event moderator discussed the main Luhansk AUC RO legislation on principles and approaches to city of Severodonetsk registration/deregistration registration/deregistration of the place of of the place of residence residence and putting together a unified Participants: city mayors, their and setting up an electronic community register within the deputies, directors and specialists electronic community legislative framework of Ukraine. of line departments of local register The participants learned about the main tools to councils. automate organisational work in registration/deregistration of the place of residence. The event moderator also stressed the importance of monitoring and evaluating the feedback about automated processes and their impact on the quality of work. December 28, 2017 Application of the The event moderator provided an overview of Luhansk AUC RO legislation governing the the regulatory and legislative framework city of Severodonetsk use of funds for the governing the provision of financial assistance in implementation of projects the context of the Special Loan Program for the Participants: city mayors, their within the framework of Restoration of Ukraine. deputies and directors and the Special Loan Program The participants became familiar with the general specialists of departments for for the Restoration of information about the project and the finance and investments of local Ukraine requirements for the subvention from the councils. National Budget to local budgets for the implementation of projects within the framework of the Special Loan Program for the Restoration of Ukraine. The event moderator familiarised the audience with the main requirements and criteria for the preparation and implementation of projects in line with the procedures set by the European Investment Bank and the Financial Agreement.

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Annex С.

Detailed information about expert workshops for representatives of rayon and oblast councils on the topic “Peculiarities of the formation of territorial communities in the oblast in the context of decentralisation”

October 17, 2017, Peculiarities of the With the purpose of better understanding of the formation of decentralisation process, the expert workshop moderator city of Vinnytsya territorial spent the first half of the event on the Concept of the Local communities in the Government Reform and Reform of the Territorial Participants: 17 oblast in the context Arrangement of Government Institutions in Ukraine endorsed persons including of decentralisation by the Cabinet of Ministers of Ukraine on April 01, 2014 representatives of under # # 333-р and dwelt upon the preconditions for the rayon councils of the decentralisation and reform of territorial arrangement of Vinnytsya oblast. government institutions. The event participants studied the dynamics of the formation of territorial communities both in Ukraine and in the Vinnytsya oblast.

During the first half of the expert workshop, the participants discussed the main tasks of decentralisation and local government reform in the current context.

The expert workshop participants studied the new provisions of the legislation governing decentralisation and local government reform:

- Draft Law “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)” # 4772.

- Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Annexation of Territorial Communities Located on the Territories of Adjacent Rayons” # 1923 of March 14, 2017.

- methodology for the formation of high capacity territorial communities endorsed by the Resolution of the Cabinet of Ministers of Ukraine of April 08, 2015, # 214.

- Draft Law # 6636 “On the Procedure for the Formation and Abolishment of Rayons and Setting and Changing Their Boundaries”.

The participants put questions and discussed about the Verkhovna Rada of Ukraine approval of the draft law on changes in the administrative and territorial system to facilitate the transformation of rayons. Given this, the moderator gave a suggestion for expert workshop participants to discuss potential options for resolving these issues, in particular:

x approval by the Verkhovna Rada of Ukraine of the draft law to change the administrative and territorial arrangement at the rayon level throughout the whole territory of the country (within the boundaries of selected oblasts as an option); x approval by the Verkhovna Rada of Ukraine of the resolution to abolish certain rayons where all territorial communities have consolidated;

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x approval by the Verkhovna Rada of Ukraine of the resolution to dismiss rayon councils in the rayons where all territorial communities have consolidated into one community; x changing the boundaries of certain rayons through their consolidation (the same Draft Law #6636); x delegating powers of several rayon councils to one rayon state administration to be selected as the hub one.

The participants also received the information that the Ministry of Regional Development in cooperation with oblast state administrations and Centers for Local Government Development identified the potential centers for future high capacity communities, in particular, for the Vinnytsya oblast.

During the second half of the event, the participants reviewed the criteria to assess the capacity of CTCs, criteria to consider consolidated territorial communities capable, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted.

On a separate note, the participants dwelt upon the infrastructure support and achievements of the fiscal decentralisation, in particular with regard to own revenues (with transfers) in the consolidated budget of Ukraine, as well as on the state support for community development and infrastructure improvements.

In closing, the participants of the expert workshop discussed oblast ratings in terms of the establishments of CTCs, ratings of CTC mayors, the vision of every participant of the successes and issues of the local government reform, reforms of th territorial arrangement of government institutions and decentralisation on the territories they represent.

October 18, 2017, Peculiarities of the The moderator started the expert workshop with the general formation of overview of the information about the current status of the city of Dnipro territorial local government reform at the community level in the communities in the Dnipropetrovsk oblast and on the implementation by the Participants: 36 oblast in the context Ukrainian Association of Rayon and Oblast Councils and the persons including of decentralisation Association of Ukrainian Cities of the PULSE Project with representatives of the financial support form USAID. rayon councils of rayon councils of the The participants noted the importance of the Concept of the Dnipropetrovsk local government reform and reform of the territorial oblast. arrangement of government institutions in Ukraine, as the Concept represents the strategy of the reform aiming at building an effective system for governance at the local level and the precondition for the decentralisation reform and reform of the territorial arrangement of government institutions. The event participants reviewed the dynamics of the formation of territorial communities in Ukraine and in the Dnipropetrovsk oblast.

Thus, during the first half of the expert workshop, the participants focused their attention on the main tasks of

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decentralisation and local government reform in the current context.

The expert workshop participants receive explanations of the new provisions in the legislation governing decentralisation and local government reform:

- Draft Law “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)”

- Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Annexation of Territorial Communities Located on the Territories of Adjacent Rayons”

During the second half of the training event, the participants put questions and discussed the potential approval by the Verkhovna Rada of the intermediate Draft Law “On the Mechanisms for the Establishment and Abolishment of Rayons and Setting and Changing Their Boundaries” to facilitate changes at the rayon level before the law on administrative arrangement is approved. (Note. The Dnipropetrovsk oblast has already more than 50% rayons shoe territory is covered by consolidated territorial communities).

In the course of the discussion of this issue, the participants came to the understanding of the opportunity this draft law provides to promote the decentralisation reform by streamlining effective governance at the rayon level of administrative and territorial arrangement. At the same time, the event participants studied the five options for resolving suggested by the Cabinet of Ministers, namely:

1. approval by the Verkhovna Rada of Ukraine of the draft law to change the administrative and territorial arrangement at the rayon level throughout the whole territory of the country (within the boundaries of selected oblasts as an option); 2. approval by the Verkhovna Rada of Ukraine of the resolution to abolish certain rayons where all territorial communities have consolidated; 3. approval by the Verkhovna Rada of Ukraine of the resolution to dismiss rayon councils in the rayons where all territorial communities have consolidated into one community; 4. changing the boundaries of certain rayons through their consolidation (the same Draft Law #6636); 5. delegating powers of several rayon councils to one rayon state administration to be selected as the hub one.

Having considered the suggested options, the majority of the expert workshop participants came to an agreement that in the current context the best option would be to introduce a new administrative and territorial arrangement at the rayon level throughout the whole country (at least on the territory of the Dnipropetrovsk oblast) by approving the corresponding legislation.

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The event participants also discussed the draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Methodology for the Establishment of Capable Territorial Communities”, in particular in the part dealing with expanding the boundaries of the rayon where the administrative center of the new consolidated territorial community is located in case this consolidated territorial community annexes one of several territorial communities located on the territory of the adjacent rayon.

In closing of the expert workshop, the participants discussed the vision of every participant of the successes and issues of the local government reform and decentralisation reform on the territories they represent. They also reviewed the criteria to assess the capacity of consolidated territorial communities, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted.

October 27 2017, Peculiarities of the President of the Ukrainian Association of Rayon and Oblast formation of Councils and Chairman of the Kharkiv Oblast Council Serhiy city of territorial Chernov and Chairman of the Khmelnytskyi Oblast Council Khmelnytskyi communities in the Mykhailo Zahorodniy opened the expert workshop. The oblast in the context purpose of the workshop in the Khmelnytskyi oblast was to Participants: 23 of decentralisation provide chairmen of rayon councils with the information to persons including assist them in assuming potential powers in effective representatives of territorial management. The moderator focused their attention rayon councils of the on the necessity for them to become active participants of the Khmelnytskyi decentralisation process. oblast, Chairman of the Khmelnytskyi The event participants learned about the implementation of Oblast Council M. the PULSE Project by the Ukrainian Association of Rayon Zahorodniy and and Oblast Councils together with the Association of Chairman of the Ukrainian Cities with the financial assistance from USAID. Kharkiv Oblast Council and The expert workshop consisted of two parts: the first one was UAROC President dedicated to the regulatory and legislative framework for the S. Chernov. local government reform and decentralisation reform and the second one was dedicated to decentralisation and the current status and future prospects for consolidated territorial communities.

The first part started with a general overview of the situation in the Khmelnytskyi oblast with the establishment of consolidated territorial communities.

The participants dwelt on the phases of the decentralisation in Ukraine focusing their attention on the following:

x Concept of the local government reform and reform of territorial arrangement of government institutions in Ukraine endorsed by Resolution of the Cabinet of Ministers of Ukraine # 333-р of April 01, 2014; x Methodology for the establishment of capable territorial communities endorsed by Resolution of the Cabinet of Ministers of Ukraine # 214 of April 08, 2015 as amended by Resolution # 662 of August 30, 2017;

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x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Voluntary Annexation of Territorial Communities”; x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Consolidation of Territorial Communities Located on the Territory of Adjacent Rayons”; x Law of Ukraine “On Introducing Amendments to Certain Laws of Ukraine Regarding Voluntary Annexation of Territorial Communities”; x Draft Law “On the Mechanism for the Establishment and Abolishment of Rayons and Setting and Changing Their Boundaries” and hands-on application of its provisions. Thus, the first half of the expert workshop was focused on the main tasks of decentralisation and reforms of local governments in the current context.

The participants also paid attention to utility companies providing such services as district heating, centralised waster supply and sewerage to the population living on the territory of CTCs, in the case when such utility companies have rayon councils as their founders and provide services to non- consolidated communities.

The second part of the expert workshop was dedicated to the discussion of the position of starostas and Law of Ukraine # 1848-VIII “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Status of the Village and Town Starosta”. The participants also discussed the starosta issues in the context of the establishment of starosta districts and timely scheduling the initial elections of starostas.

In closing of the expert workshop, the participants discussed the vision of every participant of the successes and issues of the local government reform and decentralisation reform on the territories they represent.

The event participants reviewed the criteria to consider consolidated territorial communities capable, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted.

Apart from the issues mentioned above, the event participants were also interested in the following issues:

x setting up executive entities of rayon and oblast councils as envisioned in the "Expected Results" part of the Concept; x transferring property of common ownership of territorial communities in the rayon to the communal ownership of CTCs; x co-financing of facilities currently managed by rayon councils, but continue to provide services to the population belonging to CTCs; x necessity of streamlining the legislation on

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decentralisation, in particular with regard to functioning of rayon councils and their powers; x coding land plots within CTCs, which include populated areas of two or more rayons; x reducing the number of rayon councils; At the same time, the event participants almost unanimously expressed their concerns about the communities, which are not willing to consolidate, as well as about the shortage of qualified specialists in CTCs.

November 03, 2017, Peculiarities of the Chairman of the Secretariat of the Ukrainian Association of formation of Rayon and Oblast Councils Yuriy Andriychuk opened the city of Kyiv territorial one-day expert workshop. In his welcoming remarks he communities in the mentioned that the Ukrainian Association of Rayon and Participants: 17 oblast in the context Oblast Councils together with the Association of Ukrainian persons including of decentralisation Cities are implementing the Policy for Ukraine’s Local Self- representatives of Governance Project (PULSE) with the financial support from rayon councils of the USAID. This was the closing 27th expert workshop of those Kyiv oblast, Head of planned for 2017 for representatives of rayon and oblast the Secretariat of the councils. Such events took place in 23 oblasts in Ukraine. Ukrainian Association of The training events brought together more than 500 local Rayon and Oblast council members and local government officials from the Councils Yuriy Kyiv oblast, a complicated capital city region with low Andreychuk, Deputy Ministry of Regional Development indicators of Head of the decentralisation and community consolidation. Secretariat of the Association and Aiming at better understanding of the importance and logics Director for of the whole decentralisation process, the moderator at the Sustainable beginning of the event focused the attention on the following: Territorial x preconditions for the immediate start of Development Iryna decentralisation and reforms of the territorial Korduba. arrangement of government institutions; x main goals of decentralisation and local government reform in the current context; x Concept of the local government reform and reform of the territorial arrangement of government institutions in Ukraine endorsed by Resolution of the Cabinet of Ministers of Ukraine # 333-р of April 01, 2014; x Draft Law “On the Mechanism for the Establishment and Abolishment of Rayons and Setting an Changing Their Boundaries”; x Draft Law “On Service in Local Governments”; x “On Introducing Amendments to Certain Ukrainian Legislation Regarding Rolling-out the Powers of Local Governments of the Whole Territory of the Corresponding Village, Town and City Territorial Community”; x “On Introducing Amendments to Certain Ukrainian Legislation Regarding Management of Land Resources within the Boundaries of Consolidated Territorial Communities”; x “On Metropolitan Areas”; and, x “On Introducing Amendments to Certain Laws of Ukraine Regarding Elections of Starostas”

The participants of the expert workshop received explanations of new provisions in the legislation governing

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decentralisation and local government reform: x Draft Law «On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)” # 4772 (came into force on March 18, 2017) regulating the mechanisms for voluntary annexation of communities to already consolidated ones; x Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Consolidation of Territorial Communities Located on the Territories of Adjacent Rayons” # 1923 of March 14, 2017; x Draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Methodology for the Formation of Capable Territorial Communities”, in particular, in the part dealing with expanding the boundaries of the rayon of the rayon where the administrative center of the new consolidated territorial community is located in case this consolidated territorial community annexes one of several territorial communities located on the territory of the adjacent rayon. In closing of the expert workshop, the participants discussed oblast ratings regarding the establishment of CTCs, ratings of CTC mayors, and the vision of every participant of the successes and issues of the local government reform, reform of the territorial arrangement of government institutions and decentralisation reform on the territories they represent. They reviewed the criteria to assess the capacity of CTCs, criteria to consider consolidated territorial communities capable, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted. The most critical issues were: x management of communally-owned property; x energy safety; x delineation of powers between various government institutions; x functioning of rayons state administrations. Inclosing, the participants of the expert workshop came up with a suggestion for the Association Board to consider the regulatory and legislative framework for administrative and territorial arrangement of Ukraine and appealed to the Cabinet of Ministers of Ukraine with a request to ask the Verkhovna Rada of Ukraine to approve the Law “On the Principles of the Administrative and Territorial Arrangement of Ukraine”. Keeping in mind the dynamics of the establishment of consolidated territorial communities, the participants came to an agreement that the top priority is to accelerate the reforms at the community level and

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transformation of rayons.

December 12, 2017, Peculiarities of the Chairman of the Mykolaiv Oblast Council Victoria formation of Moskalenko opened the one-day expert workshop. She spoke city of Mykolaiv territorial about the successes of the Mykolaiv oblast in the sphere of communities in the decentralisation and mentioned about the implementation of Participants: 16 oblast in the context the Policy for Ukraine’s Local Self-Governance Project persons including of decentralisation (PULSE) by the Ukrainian Association of Rayon and Oblast representatives of Councils together with the Association of Ukrainian Cities rayon councils of the with the financial support form USAID. Mykolaiv oblast, as well as Chairman of The event participants became familiar with the regulatory the Mykolaiv Oblast and legal documents governing the implementation of main Council Victoria tasks of decentralisation and local government reform, such Moskalenko and as: Director of the Organisational x Concept of the local government reform and reform Department of the of the territorial arrangement of government Oblast Council institutions and its background; Oleksandr. x Action plan to implement the Concept; x Amendments to the Budget and Tax Codes of Ukraine; x Law of Ukraine “On Voluntary Consolidation of Territorial Communities”; x Law of Ukraine “On Inter-Municipal Cooperation”; x a package of laws to expand the powers of local governments and optimise the provision of administrative services (in the sphere of state registration of rights to immovable property and their limitations; state registration of legal persons, entrepreneurs represented by physical persons and citizen associations); x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Decentralisation in the Sphere of State Architectural and Construction Control and Urban Development Legislation” with regard to spatial territorial planning. x Law of Ukraine “On the Mechanism for the Establishment and Abolishment of Rayons and Setting and Changing Their Boundaries”. The put their questions and discussed the approval of this draft law by the Verkhovna Rada to promote transformation of rayons before the approval of the law on administrative and territorial arrangement. x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)”; x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Consolidation of Territorial Communities Located on the Territories of Adjacent Rayons” # 1923 of March 14, 2017. x Draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Methodology for the Formation of Capable

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Territorial Communities”, in particular, in the part dealing with expanding rayon boundaries, The event participants studied the dynamics of the establishment of consolidated territorial communities in Ukraine in general and in the Mykolaiv oblast in particular. (22 consolidated territorial communities have been established. On December 24 there will be elections in 7 CTCs in the oblast).

Based on the Monitoring by the Ministry of Regional Development, the Mykolaiv oblast demonstrates medium indictors for the implementation of the decentralisation reform and establishment of CTCs.

The participants discussed oblast ratings regarding the establishment of CTCs, ratings of CTC mayors, and the vision of every participant of the successes and issues of the local government reform, reform of the territorial arrangement of government institutions and decentralisation reform on the territories they represent. They reviewed the criteria to assess the capacity of CTCs, criteria to consider consolidated territorial communities capable, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted.

Suggestions from the expert workshop participants.

CTCs should demonstrate more effective performance, in particular, with regard to the preparation and submission of projects form territorial communities for funding at the expense of the subvention from the National Budget to local budgets for infrastructure improvements.

http://mk-oblrada.gov.ua/index.php/1389-dorohovkazom-u- realizatsii-reformy-detsentralizatsii-maie-buty-same-takyi- pryntsyp-dobrovilnist-ekonomichna-spromozhnist-i-blyzkist- do-administratyvnykh-posluh-viktoriia-moskalenko-vziala- uchast-v-odnodennii-fakhovii-maisterni-dlia-predstavnykiv- oblasnoi

December 13, 2017, Peculiarities of the The expert workshop moderator started the event with the formation of general information about the status of the local government city of Odesa territorial reform at the community level in the Odesa oblast with a communities in the special emphasis on the implementation by the Ukrainian Participants: 19 oblast in the context Association of Rayon and Oblast Councils in cooperation persons including of decentralisation with the Association of Ukrainian Cities of the PULSE representatives of Project with the financial assistance form USAID. rayon councils of the Odesa oblast. The event participants discussed the implementation of the Concept of the Local Government Reform and Reform of the Territorial Arrangement of Government Institutions in Ukraine, as the Concept serves as the strategy for the reform aiming at improving the effectiveness of governance at the local level, as well as on the background of decentralisation and reform of the territorial arrangement of government institutions. They also reviewed the dynamics of the establishment of territorial communities in Ukraine and in the

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Odesa oblast.

The event participants also discussed the Action Plan for the implementation of the decentralisation reform and the legislative framework for the local government reform and reform of the territorial arrangement of government institutions, in particular:

1) with regard to strengthening the financial autonomy and capacity of local self-governance (amendments to the Budget and Tax Codes of Ukraine);

2) with regard to the new territorial foundation of local government activities (Laws of Ukraine “On Voluntary Consolidation of Territorial Communities” and “On Inter- Municipal Cooperation”);

3) a package of laws to increase the scope of powers of local governments and optimisation of the provision administrative services (in the sphere of state registration of rights to immovable property and their limitations; state registration of legal persons, entrepreneurs represented by physical persons and citizen associations);

4) “On Introducing Amendments to Certain Ukrainian Legislation Regarding Decentralisation in the Sphere of State Architectural and Construction Control and Urban Development Legislation” with regard to spatial territorial planning.

The event participants also discussed laws and other regulatory and legal documents, namely:

x Law of Ukraine “On the Mechanism for the Establishment and Abolishment of Rayons and Setting an Changing Their Boundaries”; x Law of Ukraine “On Service in Local Governments”; x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Rolling-out the Powers of Local Governments of the Whole Territory of the Corresponding Village, Town and City Territorial Community”; x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation Regarding Management of Land Resources within the Boundaries of Consolidated Territorial Communities”; x Law of Ukraine “On Metropolitan Areas”; x Law of Ukraine “On Introducing Amendments to Certain Laws of Ukraine Regarding Elections of Starostas”; x Law of Ukraine “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)”; x Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Consolidation of Territorial Communities Located on the Territories of Adjacent Rayons”; x Draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the

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Methodology for the Formation of Capable Territorial Communities”, in particular, in the part dealing with expanding the boundaries of the rayon where the administrative center of the new consolidated territorial community is located in case this consolidated territorial community annexes one of several territorial communities located on the territory of the adjacent rayon.

The event participants put questions and discussed the approval by the Verkhovna Rada of Ukraine of the draft law to change the system of administrative and territorial arrangement to support the transformation of rayons. In the Odesa oblast there are several rayons whose territory is completely or almost completely covered by consolidated territorial communities. While discussing this issue, the participants came to an agreement that the proposals presented at the last meeting of the line Verkhovna Rada Committee should be quickly implemented to open opportunities for integrated decentralisation reform through the formation of rational and effective administrative and territorial arrangement at the rayon level.

On a separate note, the event participants dwelt on infrastructure improvements and outcomes of fiscal decentralisation, in particular, on own local government revenues, share of local budgets (together wit transfers) in the consolidated budget of Ukraine, and on the state support for community development and infrastructure improvements.

The expert workshop participants discussed oblast ratings regarding the establishment of CTCs and ratings of mayors.

Over the time of the local government reform and reform of territorial arrangement of government institutions, the Odesa oblast has established 23 consolidated territorial communities. On December 24, there will be elections in 2 CTCs in the oblast.

The event participants reviewed the criteria to assess the capacity of CTCs, criteria to consider consolidated territorial communities capable, consequences and risks for the communities that have consolidated against the Methodology for the establishment of capable territorial communities and the long-term perspective plan for the formation of community territories, as well as cases when long-term perspective plans had to be adjusted.

Practical recommendations

To appeal to the Cabinet of Ministers of Ukraine with a request to ask the Verkhovna Rada of Ukraine to approve the Law “On the Principles of the Administrative and Territorial Arrangement of Ukraine”. Keeping in mind the dynamics of the establishment of consolidated territorial communities, the participants came to an agreement that the top priority is to accelerate the reforms at the community level and

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transformation of rayons.

December 22, 2017, Peculiarities of the Director of the Department for Local Self-Governance, formation of Community Development and International Relations of the city of Kharkiv territorial Kharkiv Oblast Council Olena Kulyk opened the one-day communities in the expert workshop. She mentioned that the Ukrainian Participants: 22 oblast in the context Association of Rayon and Oblast Councils together with the persons including of decentralisation Association of Ukrainian Cities is implementing the Policy representatives of for Ukraine’ Local Self-Governance Project (PULSE) with rayon councils of the financial assistance from USAID and conducts one-day Kharkiv oblast and expert workshops for representatives of rayon and oblast UAROC President councils. S. Chernov. Over the time of the local government reform and reform of the territorial arrangement of government institutions, the Kharkiv region has established 12 consolidated territorial communities.

The Kharkiv region is the oblast demonstrating not very high Ministry of Regional Development indicators for decentralisation and establishment of CTCs.

This is why aiming at teaching the participants the whole logics of decentralisation, the moderator at the beginning of the event focused their attention on the Concept of the local government reform and reform of the territorial arrangement of government institutions in Ukraine. The participants discussed the background of decentralisation and the reform of the territorial arrangement of government institutions. They also discussed the Action Plan and the legislative framework for the implementation of the decentralisation reform and reform of territorial arrangement of government institutions, in particular:

1) with regard to strengthening the financial autonomy and capacity of local self-governance (amendments to the Budget and Tax Codes of Ukraine);

2) with regard to the new territorial foundation of local government activities (Laws of Ukraine “On Voluntary Consolidation of Territorial Communities” and “On Inter- Municipal Cooperation”);

3) a package of laws to increase the scope of powers of local governments and optimisation of the provision administrative services (in the sphere of state registration of rights to immovable property and their limitations; state registration of legal persons, entrepreneurs represented by physical persons and citizen associations);

4) “On Introducing Amendments to Certain Ukrainian Legislation Regarding Decentralisation in the Sphere of State Architectural and Construction Control and Urban Development Legislation” with regard to spatial territorial planning.

The event participants studied the dynamics of the establishment of consolidated territorial communities both in Ukraine and in the Kharkiv oblast. Thus the main focus of the first half of the expert workshop was placed on the main

146 October – December, 2017 Eighth quarter of Project implementation

tasks of decentralisation and local government reform in the current context.

The participants discussed the following laws: - “On Introducing Amendments to the Law of Ukraine “On Voluntary Consolidation of Territorial Communities” Regarding the Voluntary Annexation of Territorial Communities of Villages and Towns to Territorial Communities of Oblast Significance Cities”; - “On the Mechanism for the Establishment and Abolishment of Rayons and Setting an Changing Their Boundaries”; - “On Service in Local Governments”; - “On Introducing Amendments to the Law of Ukraine “On Regulation of Urban Development Activities”; - “On Introducing Amendments to Certain Ukrainian Legislation Regarding Rolling-out the Powers of Local Governments of the Whole Territory of the Corresponding Village, Town and City Territorial Community”; - “On Introducing Amendments to Certain Ukrainian Legislation Regarding Management of Land Resources within the Boundaries of Consolidated Territorial Communities”; - “On Metropolitan Areas”; and, - “On Introducing Amendments to Certain Laws of Ukraine Regarding Elections of Starostas”.

In the course of the discussion of Draft Law # 6636 “On the Mechanism for the Establishment and Abolishment of Rayons and Setting an Changing Their Boundaries”, the participants came to an agreement that this law is essential for the decentralisation reform and for the formation of rational and effective administrative and territorial arrangement at the rayon level.

The expert workshop participants received explanations of the new provisions of the decentralisation and local government reform legislation:

- Draft Law “On Introducing Amendments to Certain Ukrainian Legislation (regarding voluntary annexation of territorial communities)” - Draft Law “On Introducing Amendments to Certain Ukrainian Legislation Regarding the Peculiarities of Voluntary Consolidation of Territorial Communities Located on the Territories of Adjacent Rayons”. The event participants discussed draft Resolution of the Cabinet of Ministers of Ukraine “On Introducing Amendments to the Methodology for the Formation of Capable Territorial Communities”, in the part dealing with expanding the boundaries of the rayon where the administrative center of the new consolidated territorial community is located in case this consolidated territorial community annexes one of several territorial communities located on the territory of the adjacent rayon.

During the second part of the event, the participants put questions and discussed the approval by the Verkhovna Rada of Ukraine of the draft law to change the system of

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administrative and territorial arrangement to support the transformation of rayons.

On a separate note, the participants discussed the infrastructure support and achievements of the fiscal decentralisation, in particular with regard to own revenues (with transfers) in the consolidated budget of Ukraine, as well as on the state support for community development and infrastructure improvements.

http://association.kharkov.ua/index.php?option=com _content&view=article&id=3314:2017-12-22-13-26- 50&catid=39:2011-06-28-13-09-12&Itemid=152

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