OREANDA-NEWS. September 15, 2010. The Dialogue Day between state authorities and local governments through VI Ukrainian Municipal Forum took place in Yalta. Its participants jointly searched for solutions of development problems of communities. Summary of the main lines of the Dialogue Day are in the interview with the Vice Prime Minister of Ukraine Viktor Tykhonov.

Mr. Tykhonov, what are the main issues discussed during the Dialogue Day between the State authorities and local governments, held last week in Yalta?
The parties discussed several issues, but I would not give some of them major status, because every decision is an important issue for the proper life of a settlement.

If possible, please tell us more about the budget system reforming, which the participants have discussed during the Dialogue Day?
This is one of the reforms developed by the Committee on Economic Reform under the leadership of the President of Ukraine. It applies to local budgets, and intergovernmental relations. Reform of the budget system should ensure that strategic regional policy objectives - creating conditions for sustainable regional development, ensuring their sustainability and competitiveness.

What would this reform give to local budgets?
It is designed to reduce dependence of local budgets on transfers from the State budget and local budgets to ensure adequate revenue sources. Reform developers provide separation of powers between central and local budgets on the basis of balancing national and regional interests to ensure maximum effective service provision and use of public funds. Furthermore, the transition to drawing up and implementation of local budgets under the program-based method, medium term planning – also is the task of the reform.

In other words, budgetary innovations are holistic and systemic in nature and involve a number of provisions aimed at forming projected budget policy, regional economic growth, increasing financial autonomy of local budgets, improve intergovernmental relations.

Can you already call some specific figures?
New approaches in budget planning include increasing the resource base of local budgets totaling more than eighteen billion (18 180.8 million UAH). First fiscal revenues amounting to more than ten billion would be transferred to local budgets. In particular, 50% royalty fee for national significance, 50% of the fee for special use of water resources of national significance, fees for licenses and certificates, state registration (6 types, 50% of the fee for special use of forest resources of national importance and others).

The sources of incomes of local budgets at all levels are greatly expanded. Such revenues in 2011 compared to the year 2010 will increase by 144.0% and will make 14 717,2 million.

It should be noted that the disposal of stable local government revenues is transferred to local authorities in educational, cultural, social, economic and other spheres.

Reforming the budget system is the huge issue, and I think it is worth talking about separately.

Were the housing service issues discussed, which are in a number in every locality?
They were discussed. I would stop on the main problems - lack of Housing Reform and Development local programs developed and approved. Heads of local governments are to abandon the field of formal approach and to approach this issue more closely. To be clear about that, I would give some statistics: at present only in six regions of Donetsk, Dnipropetrovsk, Prykarpatie, Kirovohrad, Rivne, Kherson regional programs for reform and development of housing are developed and approved, taking into account rules of law of Ukraine "On State program of reforming and Housing development of Ukraine" dated June 11, 2009. Without such programs, no mayor can work systematically to solve housing problems. Note the housing stock aging tendency. Today, 60.7 thousand houses with total area of 5.1 million sq m are classified in the category of old and emergency houses, i.e. 0.6% of the country housing, where 145.7 thousand inhabitants live.

During 2009 the number of emergency houses increased by 1081 units (6.2%). The housing fund of the houses of first mass constructions (60-70's) is about 72 million square meters and requires replacement or reconstruction. In fact, one fourth of the urban population is living in premises that have poor technical condition, low performance and has reached its operational life.

This, as well as several other housing problems, is the result of critical financial and economic state of the industry.

What are the measures taken by the Government to strengthen the financial capacity?
According to the Law of Ukraine "On State Budget for 2010" in Housing Stabilization Fund has 500 million UAH aimed at implementing the National Programme "Potable Water of Ukraine for 2006 - 2020"; "National Reform and Development Programme Housing for 2009-2014 years", energy saving, development and reconstruction of heat-supply systems, reconstruction and major repairs of residential buildings using energy-saving technologies and equipment, providing state support for investment projects of technical upgrading and renovation of residential buildings put into operation before 1 January 1989, where associations of co-owners of apartment buildings are created or are already operating; providing state support for investment projects with technical renovation and repair elevators in residential buildings, where associations of co-owners of apartment buildings are created or are already operating. By the way, the creation of associations of co-owners of apartment buildings is a priority for reform and development of housing.

However, the reform of local government should precede any changes on the ground. Were those issues discussed during the Dialogue Day?
You are right. The current system in Ukraine and the state of local government are unable to deliver either the social or economic development of the territories. That is why we have begun to reform the budget system and I have already said about it. In addition, we plan along with local authorities to work out the authorities of the latter, in particular those which, in opinion of the nationwide association of local authorities, were last year taken by the appropriate bodies of executive power from local government. By September 15, a working group to develop a mechanism to resolve such problems will be created.

To ensure a qualitatively new and simple legal environment for the task of the Government, MRDC is preparing now a number of bills. In particular, the new edition of the bill "On local government in Ukraine", "On State support of local community associations", "On the administrative-territorial structure of Ukraine" and several other draft legal acts, which together are supposed to create a solid basis for the formation of communities, able to solve problems of community, to develop and self-improve.

As you know, Article 142 of the Constitution of Ukraine stipulates that land is a material and financial basis for local government. To make such a rule be not only declared, we should ensure the works on boundaries of settlements and separation of state and municipal property.

What we have today?
Today local governments under the land laws make land available only within the settlements. A limit of settlements are the building limits and beyond these limits the land belongs to municipal property. Lands outside the settlements - farmland, forest, water resources, is disposed by bodies of executive power in the face of regional state administrations and territorial departments of central executive bodies and they do not always take into account the interests of local communities. Today 29246.50 thousand hectares of land are the subject to such delimitation.

Problems of delimitation of administrative units, their names and referring to certain categories were discussed in July at a special meeting with representatives of central executive bodies and members of the Parliamentary Committee on State Building and Local Government. The problem of lack of uniform state register of administrative units of Ukraine and some associated problems were raised. We came to the decision that this matter should be fully put in order, and the Government at the end of this month will be proposed with a plan of measures to solve it.