Odesa Municipal Target Programs: Development Tool or Budget-Raiding Mechanism?
The procedure for developing municipal target and comprehensive programs
in Odesa was approved by Order No. 1115 of the Mayor of Odesa dated November 8, 2016. As stated in the order, a municipal target program is a set of interconnected areas and measures coordinated by timeframe and resources among all involved implementers and aimed at solving the most pressing problems of the city’s development. Put into plain language, a municipal program is a concrete multi-year action plan for all involved parties to achieve a predetermined goal, listing the actions of the relevant city bodies and defining both the areas of action and the financial resources required to carry them out.
Purely formally, every municipal program passes through certain stages:
1. Initiation, justification and preparation of the draft program.
2. Approval of the program.
3. Approval of budget allocations for implementation of the program.
4. Implementation of the program, including amendments to the program.
5. Report on implementation of the program.
Logically, each program should have a financing strategy designed for several years. In practice, financing is determined in the city budget, which is adopted only for the current year. It should also be noted that programs may provide for other sources of funding, but our analysis covers exclusively the funds designated as financing from the city budget.
Current realities (based on materials from the February 21, 2024 session)
At present, 29 municipal programs have been approved in the city. Analysis of these programs, comparing their 2024 financing needs with the funds allocated from the city budget this year, allows them to be divided into four groups:
Group 1. These are programs approved at the most recent session, on February 21, for which budget financing has not yet been allocated. They are not specially marked in the table.
Group 2.These are programs whose financial provision exceeds 96% of the required amount or equals the required amount, allowing us to conclude that there are no financial factors preventing their implementation. This group includes 12 programs. They are marked in green in the table.
Group 3. These are programs whose level of financial provision ranges from 85% to 64%, placing achievement of the planned results in doubt because a number of measures included in the program are unfunded. This group includes seven programs. They are marked in yellow in the table.
Group 4. These are programs whose financial provision ranges from 57% to 6%, making it possible to state that, given the resources allocated to them, their objectives will not be achieved. This group includes eight programs. They are marked in red in the table.
The list of municipal programs can be viewed at this link.
Information on the distribution of expenditures in the budget of the Odesa City Territorial Community for implementation of municipal programs in 2024 can be found in Appendix 7 to Odesa City Council Decision No. 1789-VIII of February 21, 2024, “On Amendments to Odesa City Council Decision No. 1618-VIII of November 29, 2023, ‘On the Budget of the Odesa City Territorial Community for 2024’”. Anyone can review the indicators collected by Green Leaf NGO in the table.
Municipal Target Program for the Development of Education in Odesa
Let us analyze several programs. For example, the Municipal Target Program for the Development of Education in Odesa for 2023–2025, which we assigned to Group 3. For 2024, the program envisages spending UAH 167,184,000, while the budget provides only UAH 113,073,100 to finance it. The principal spending unit is the Department of Education and Science of Odesa City Council.
The program includes the following areas:
| Areas of expenditure | Approximate amount under the program |
| Section 1. Creating conditions to meet the population’s need for high-quality and accessible education for children and stable operation of educational institutions | 28 500 000 |
| including major repairs of buildings and premises | 20 000 000 |
| Section 2 — Creating a safe educational environment | 92 850 000 |
| including arrangement of protective shelters | 30 000 000 |
| including fire-safety measures | 50 000 000 |
| Section 3. Digitalization of the educational process and management of the education sector | 22 706 000 |
| including equipping institutions with multimedia equipment | 6 700 000 |
| including implementation of an electronic-school system | 15 000 000 |
| Section 4. Supporting the development of children’s and students’ intellectual and creative potential | 11 658 000 |
| including recreation and health improvement for children | 5 000 000 |
| including purchase of New Year gifts | 6 000 000 |
| Section 5. Developing creative potential and increasing the prestige of work in the education sector | 11 470 000 |
| including municipal payments | 11 000 000 |
As the table shows, all of these measures are interconnected. Underfunding some areas will negatively affect the effectiveness of all the others. Children need properly equipped educational institutions, completed repairs, recreation and gifts, and teachers receiving decent pay. But the funds allocated from the budget are not enough even to carry out the first two areas of the program, let alone the others. Alternatively, implementation of the other areas would come at the expense of children’s safety while they are in educational institutions.
Municipal Target Program for Civil Protection of the Population
We also propose focusing on the provision of shelters for civilians. This is governed by the Municipal Target Program for Civil Protection of the Population and Territories from Man-Made and Natural Emergencies and for Fire Safety in Odesa for 2022–2026. It provides for spending of more than UAH 178 million in 2024, of which UAH 113.5 million is required for item 1.1 alone — “construction, major repairs and reconstruction of municipally owned civil-protection shelters.” There are also public warning systems, communication channels for warning systems and many other items. Yet only UAH 95.6 million is allocated from the budget for the entire program in 2024, which is not enough even for the protective shelters. The alternative is to implement other areas of the program by reducing shelter financing even further.
Conclusions
At present, most municipal target programs are not fully provided with financial resources. In effect, one can speak of two “parallel worlds”: one says everything is fine because there is a municipal target program addressing the problem and it has been approved by deputies. The other parallel world, represented by the Finance Department, says the city cannot fully finance the solution because the city budget lacks funds. This affects the effectiveness of spending the money that is available: funds are spent, but the objective built into most programs is not achieved.
Putting this area in order requires financing indicators for municipal target programs to correspond to the financial resources actually available to the city. This is possible only if municipal target programs are aligned with the real capacity of the budget, adjusting not only the program’s areas of activity but also its objectives. For example, how can one speak about developing electric transport if the allocated funds are not even enough to pay employees’ wages, let alone finance all other areas of the program, including equipment repairs?
Funding Ukraine’s Defense Forces from the Odesa City Budget
Expenditures on territorial defense
In Odesa, protests against non-priority use of city and regional budgets during wartime have continued for eight months. One question troubling Odesa residents is how much money Odesa City Council allocated in 2024 to meet military needs. Green Leaf will try to clarify this. As previously noted, expenditures on territorial-defense measures and works are reflected in the city budget decision under program classification code 8240. These expenditures appeared in the 2024 city budget from the outset and are shown under the following chief spending units, in hryvnias:
| Chief spending unit | Initial decision for 2024 |
| Executive Committee of Odesa City Council | 10 000 000 |
| Department of Internal Policy of Odesa City Council | 50 000 000 |
| Department of Municipal Services of Odesa City Council | 20 000 000 |
| Capital Construction Department of Odesa City Council | 126 000 000 |
| Department of Municipal Security of Odesa City Council | 347 250 000 |
| Total | 553 250 000 |
More information on how these funds are to be spent is provided by the “Municipal Target Program for Supporting the Development of Territorial Defense Units and Volunteer Formations of the Odesa City Territorial Community for 2022–2025,” whose latest version can be viewed at this link. For convenience, expenditures provided by the program for 2024 have been placed in a separate table available at the link “Program 8240.xlsx”.
Analysis of the program indicators raises several questions
1. There are doubts about the appropriateness of spending UAH 120 million on building repairs this year for buildings provided to the Territorial Defense Forces. According to some assessments, under the guise of repairs for territorial defense, these buildings are simply being prepared for privatization. This is especially questionable given that UAH 121.6 million was allocated for similar purposes in 2023.
2.The “fragmentation” of expenditures among different chief spending units of the city budget is unclear. For example, item 4.2 of the Program will be implemented simultaneously by both the Department of Municipal Security and the Executive Committee of Odesa City Council, even though they are tasked with the same objectives.
3.A major question is raised by item 5.1 of the Program, under which UAH 50 million is allocated to civic and charitable organizations to address issues related to supplying Odesa’s Territorial Defense Forces. In effect, functions are duplicated: procurement for the city’s Territorial Defense Forces is carried out simultaneously by executive bodies of Odesa City Council and by civil-society institutions. This indicates either that the City Council’s executive bodies are unable to provide the Territorial Defense Forces with what they need in a timely manner, or that the leadership of the Territorial Defense Forces is unable to forecast its needs in advance.
Expenditures to support the Armed Forces of Ukraine
Understanding city-budget expenditures for the Armed Forces of Ukraine is more difficult than for the Territorial Defense Forces. First, the Municipal Target Program “Safe City Odesa,” whose latest version can be viewed at this link, includes expenditures for water rescue measures, other public-order and security activities, and specifically subventions from the local budget to the state budget under program classification code 9800. Under that same code there are separate expenditures of UAH 8,500 thousand for implementation of the Municipal Target Program for Civil Protection of the Population and Territories from Man-Made and Natural Emergencies and for Fire Safety in Odesa for 2022–2026, as well as expenditures for implementation of the “Safe City Odesa” program amounting to UAH 131,743.67 thousand. It is this latter amount that interests us.These expenditures were not included in the original 2024 city budget decision and appeared only through amendments to the city budget adopted on February 21, 2024. For convenience, we placed the expenditures provided by the program for 2024 under code 9800 in a separate table, available at the link “Safe City Odesa 9800.xlsx”. We note that the indicators are shown in thousands of hryvnias, as in the program itself.
What can be learned from these indicators
1. It appears that when the draft budget was prepared, the city authorities did not intend to allocate funds to Armed Forces units at all and decided to do so only later.
2. Of the UAH 131.7 million allocated, at least UAH 46 million is not going to combat units, namely:2.1. Items 8.1 and 8.3 of the Program, under which funds go to National Guard units engaged in maintaining public order and citizen safety in Odesa, for a total of UAH 37.0 million. A simple question arises: what, then, are the National Police of Ukraine and Trukhanov’s personal “guard” in the form of the municipal institution “Municipal Guard” doing, given that its authorized staffing level is 450 people and more than UAH 117 million is provided for its maintenance in the 2024 budget?
2.2. Item 9.1 of the Program provides more than UAH 4.0 million to the Odesa Regional Territorial Recruitment and Social Support Center not only for computers and office equipment, but also for the vague item “payment for the production of insignia and other products.” What these insignia and other products are, how urgent such spending is, and how it will bring victory over Russian aggression any closer — the Program does not say.
2.3. Item 19.1 of the Program provides expenditures of UAH 5.0 million for current repairs to the administrative building housing the Territorial Department of the State Bureau of Investigation.
3.Only one military unit with its subordinate units received funding with wording covering “surveillance and fire-adjustment equipment, unmanned aircraft systems (UAVs), weapons, military equipment, electronic-warfare systems and other needs.” As far as we know, combat units urgently need UAVs, buggies or quad bikes, and boats. There is no mention of engineering equipment, boats, medicines and many other items whose provision falls almost entirely on volunteers.
In summary
In 2024, Odesa’s city budget provides no more than UAH 85.7 million to finance combat units of the Armed Forces of Ukraine and UAH 552.6 million for the Territorial Defense Forces. At the same time, UAH 120 million in expenditures planned for repairs of buildings supposedly provided to the Territorial Defense Forces raises doubts about efficiency — is all municipal property in Odesa really in such poor condition? — as does the UAH 50 million allocated to civic and charitable organizations to address supply issues for Odesa’s Territorial Defense Forces. At the same time, there are many questions about insufficient funding for Armed Forces combat units and the absence of certain territorial-defense expenditures. At present, Russian forces can launch 20–30 Shahed-131/136 drones at Odesa in a single night to terrorize the civilian population. Specialists say this should be countered by increasing the density of mobile fire teams around the city. A key component of such mobile fire systems is air-defense searchlight systems. Given the number of casualties from hostile UAV attacks in Odesa, financing additional mobile air-defense groups should have become the number-one priority from the standpoint of civilian safety. It is also much cheaper to shoot these drones down than later allocate city-budget funds to repair and restore infrastructure. Yet the documents reviewed do not show that the city is doing this. Green Leaf previously wrote that the city budget contains UAH 1.1 billion in undistributed — effectively hidden — balances from previous periods.