On November 28, 2013 a draft Local Self-Government Code was presented at the Parliament’s Procedural Issues and Rules Committee. The draft proposes to decentralize local self-government bodies by further increasing their scope and financial independence and providing normative acts to regulate local self-governance.

According to Tengiz Shergelashvili, First Deputy Minister of Regional Development and Infrastructure, GEL 40 million will need to be allocated from the state budget to implement the reform in the year 2014. It is estimated that the amount will increase to as much as GEL 120-200 million by 2017.

If the draft Local Self-Government Code is adopted as it is:

• The number of self-governing units will increase. Currently, there are 69 local self-governing units in Georgia which is to increase up to 120. 13 more towns will gain the status of a ‘self-governing city’ and municipalities will be created from the surrounding villages.  The status of a self-governing city will be granted only to those cities where there are at least 15 thousand residents. For example, Chiatura is ineligible for such status as, according to the Ministry of Regional Development and Infrastructure, Chiatura had only 14,600 residents in 2002 and thus does not qualify for the statusofaself-governingcity.
• Mayors and gamgebelis (head of municipality) will be directly elected by the citizens for a three-year term. The term will change to four years starting 2017.
• Financial resources of the local governments will significantly increase at the expense of collected taxes. For every employed person who is registered as a resident for a given municipality, part of an income tax will remain with the municipality. Moreover, the municipality will receive an additional capital transaction along with special and earmarked funds.
• All property located on the territory of a given municipality that presents the property of the Ministry of Economy and Sustainable Development, or the formerly collective farm, or is seized, will be handed to the municipality until 2017, if required for the functioning of the self-government unit.
• Between 2014 and 2017, the staff employed by local self-government bodies will be downsized: the draft law suggests that for every 500 voters there will be one staff member at the municipality. Currently, there are around 14 thousand people employed by the local government bodies which isexpectedtodecreaseby 3 thousand as a result of the reform. However, after 2017 the number of employed staff at local self-government bodies will again become 14 thousand. 
• The functions of the governor will substantially change. Currently, the primary authority of the governor is to provide legislative supervision of self-government bodies. The Ministry of Regional Development and Infrastructure is to perform this function after the reform, as suggested by the draft Code. The office for the ‘state trustee - governor’ will change to the ‘regional union of municipalities’ and its competency will be to create and adopt a strategy for development of the respective territory; managing automobile roads within its borders; maintaining various cultural institutions; recycling and utilizing solid waste. The Ministry of Regional Development and Infrastructure will elaborate and present to the Government of Georgia the list of objects to be transferred under the management of the unions by September 1, 2014.
• The unions will also have collegial bodies which will be comprised of sakrebulo (city/town hall) members and supervised by the state trustee - governor.
• Volunteer-based community councils will be created in the villages, the primary goal of which will be better engagement of residents in the activities of the local government.

The right to establish community councils will be allowed to an initiative group with no less than ten voters registered in a respective community. The group has to gain support of no less than 10 per cent of the registered voters in the community and collect signatures. Also, only one community council may be created in a given community. The council will participate in elaboration of the development strategy of the municipality and its budget and endorse projects to be funded by the municipality, as well as be involved in their planning and monitoring of implementation. The community council may also possess or exploit some property.

We believe that there has been the need for implementing the self-governance reform for a long time already. The initial reform was conducted in 2006, which unfortunately was marked with decreased competencies of local self-government and a more centralized system. As a result, self-governing units were reduced considerably and their scope of activities became more limited. The current system does not allow local government institutions the sufficient legislative authority, competence and financial resources to practice responsibilities exclusive to them. The decision-making process is complicated and local self-government units are unable to provide adequate services.

However, the state should not hurry with the implementation of the local self-governance reform and should rather closely examine each issue that will result into institutional changes. Before the reform is launched the following issues have to be considered:

• The law does not propose restricting authorities of Tbilisi Mayor regarding staffing issues even though several MPs had initiated introduction of such a provision about a month ago. The said draft law was withdrawn from the Parliament by initiators and the proposal so far is not being considered as part of the wider reform.
• The draft Code does not clearly envisage how the borders between the existing municipalities will be drawn, which is also a matter of dispute even today. Also, nothing is mentioned about the responsibility for proactive publishing of public information which is one of the most important indicators for the transparency of a public institution.
• According to the proposal, up to 50 new self-government bodies will be formed by local self-government elections in 2014, which leaves seven months, at most, to complete the process. The municipalities will need to be provided with buildings and facilities and necessary equipment, as well as staff. It is unlikely that the government conducts such amount of work within such a short period of time.
• The reason for downsizing staff of local self-government institutions between 2014-2017 years is unclear, as is the reason for increasing the staff again after 2017, given the self-governance reform is to be completed by 2017.
• The purpose for creating ‘community councils’ is not completely clear, as it may not be able to exercise the competencies listed by the draft law. The draft Code also does not seem to have a solution for a situation when residents support several initiative groups (10% is the threshold) or provide any instruction for the municipality gamgebeli on how to select one of the groups to become a community council.

Transparency International (TI) Georgia believes that there is a strong need for the local self-governance reform and we welcome the Government’s initiative that is directed towards decentralizing the system. However, amendments that affect the structure of the self-government, as well as the financial and economic independence cannot be considered in an expedited manner. We believe these areas require a more comprehensive analysis. In order to achieve the best possible results, increased engagement of stakeholders will be necessary, otherwise, some risks may be created.

TI Georgia will present a detailed document of remarks and recommendations regarding the draft Code to the Parliament in the coming days.