How Long Must Victims Wait for Help? Why Odesa Authorities Do Not Use the Budget Reserve Fund as Intended
On 11 January 2024, a news item appeared on the official Odesa City Council website stating that Odesa plans to restore the building on Serednia Street that was hit during the missile attack of 29 December 2023. Because of this, the mayor is reportedly going to initiate an extraordinary council session and the allocation of money from the city budget, as emergency stabilisation works must be carried out as quickly as possible. Green Leaf reminds readers that this is exactly what the reserve fund and the possibility of providing urgent assistance through a simplified procedure by decision of the executive committee are for. The city authorities did not even try to organise the allocation of funds under a simplified procedure in the final days of 2023. At that time, the local budget had no reserve fund. A new budget period began on 1 January 2024, and although the city authorities now have more than UAH 1.6 billion in the reserve fund, they are in no hurry to use it.
Let us look at the regulatory framework governing the budget reserve fund.
In addition to expenditure for defined purposes, a budget also contains funds that have not been allocated. These funds have the legal designation “budget reserve fund”. Spending from this fund is regulated by Article 24 of the Budget Code. As the Budget Code states, a budget reserve fund is formed to cover unforeseen expenditures that are non-recurring and could not have been anticipated when the draft budget was prepared. Cases such as dealing with the consequences of war crimes in the form of damage to civilian buildings caused by Russian missiles fall precisely within the criteria for using the reserve fund.
There is no need to convene a city council session in order to allocate money from the reserve fund.
All that is required is a decision by the executive body, which can be convened much more quickly than a council session, even an extraordinary one. Yet for some reason the city leadership does not use this mechanism to help people through the budget reserve fund and instead puts such decisions through a council session. In 2023, this happened because the reserve fund was reduced from UAH 1 billion to zero and the money redirected to other purposes just a few days before another Russian missile attack on Odesa, as Green Leaf wrote earlier. Now we will try to guess why, despite understanding the risk of the building collapsing, the city authorities are convening an extraordinary session to allocate funds instead of taking genuinely rapid action:
- they do not know how to use the budget reserve fund for its intended purpose because previously they saw it only as free money for their own whims;
- they want to push through something important to themselves at the same session;
- they want an excuse for another round of political PR;
- an imitation of vigorous activity;
- to keep the councillors on their toes and remind them who is in charge in Odesa.
Green Leaf leaves it to you to decide which explanation you prefer.