QUARTERLY REPORT for the Policy for Ukraine 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 – Kyiv 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 Verkhovna Rada 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 President of Ukraine, 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