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Meeting of Council for Local Self-Government Development

October 5, 2010, The Kremlin, Moscow

Dmitry Medvedev held an expanded meeting of the Council for Local Self-Government Development, at which issues of municipal improvement and enhancing the quality of utility services were discussed.

Mr Medvedev noted that the current legislation defines the responsibility for municipal improvement in very general terms only and agreed with the proposals made by representatives of municipalities to introduce relevant amendments to federal legislation specifying certain aspects of this work. At the same time, regulations should be flexible and tailored to regional and local demands. The President suggested including municipal improvement among the criteria for evaluating local government performance.

Dmitry Medvedev also proposed to define the rights and responsibilities of managing organisations, increasing their liability for non-compliance with the legislation.

In order to boost the local public spending efficiency, the President called for a more active introduction of the e-government system, which must include a control mechanism and have maximum transparency for the public. Mr Medvedev stressed that people should be encouraged to seek information and communicate with the authorities electronically.

Apart from Council members, the meeting was attended by top municipal, district and rural officials, deputies of municipal representative bodies, representatives of public organisations, management companies and housing cooperatives. The total number of participants exceeded 90. This was the first meeting of the Council held in this format.

* * *

President of Russia Dmitry Medvedev: Good afternoon, colleagues,

Today we will discuss a range of issues concerned primarily with improving of our cities, our towns, our communities, developing modern housing infrastructure, enhancing the appearance of houses, residential grounds and streets, and upgrading the quality of public services. Those are the most basic issues but they serve as criteria for evaluating the authorities’ performance, including those of you present here in this hall. They are the responsibility of local self-government bodies.

This is the second big meeting of the Council for Local Self-Government Development; the first meeting was held in 2007, and in addition there have been meetings of the Government Presidium.

I think we should bring back the practice of regular meetings of the Council for Local Self-Government Development because it is useful for us to touch base and just to make sure we all are up to date on the development of the institution of local self-government in our country.

People’s social wellbeing depends on the quality of their everyday life and their lifestyle. All people, including all of us present here, of course, want to live well: they need decent housing, cared for residential grounds and clean streets; to relax and exercise in well-maintained parks and public gardens; to drive on quality roads, which has always been a great headache in this country, they need roads that do not pose so many problems like holes and bumps; to breathe fresh air and to drink clean water. We must frankly admit that the reality in our country today is very far from this ideal.

When we travel abroad and visit the countries which are most advanced in this respect, the contrast with our standard of living becomes apparent. Of course, this does not mean that we haven’t changed anything. On the contrary, I think that a lot has changed, but the difference is still there, and it remains rather obvious.

”It is crucial to define more clearly who will be charged with the responsibility for municipal improvement.“

There are quite a few places in Russia already where life is quite comfortable, at least by Russian standards. I can say that there are many such places. I travel a lot, visiting large cities and small towns. Many cities, large and medium-sized are by all means developing successfully, leaving a very pleasant impression. There are many examples, such as Nalchik, Cheboksary, Tyumen, Khabarovsk, Belgorod and numerous others. But most importantly there is a sense in these cities that there is a systematic and long-term approach to improving them, and the work is not just done in time for the arrival of the President or some other top official. It is obvious such progressive approach must be extended to other parts of the country.

The existing legislation stipulates that municipal improvement and landscaping are the responsibility of local authorities, but these provisions are formulated in very general terms. Therefore, various regions have different understanding of the municipalities’ powers in this sector. As a result, in some places the local government has almost nothing to do with these matters and deals with them only occasionally and haphazardly, whereas in other places there is more active involvement. In some cases, such regulation is even somewhat excessive.

There is also a problem, perhaps the most complicated one: the lack of financial and legal means for conducting such activities leads to the utilisation of various alternative schemes. It could be anything, including the renowned “voluntary” donations, which are in fact charges businesses pay for municipal improvement. Of course, this causes a certain resistance from the business community, which may be willing to participate but certainly on a voluntary basis. That often leads to investigations being initiated by the prosecutor’s offices.

It is crucial to define more clearly who will be charged with the responsibility for municipal improvement. How should it be conducted? What powers should local self-government have? What can we demand from companies and organisations that rent and own properties? What is the responsibility of managing companies, condominiums and, finally, the residents themselves for the state of municipal infrastructure? Who should be legally responsible for the overall state of affairs in towns and cities, who cleans the rubbish and snow, who maintains the alleys and the driveways, and what is usually most unpleasant, as everyone knows, the areas that lie between residential blocks?

These are elementary questions, and it would seem they are discussed constantly but as it often happens, there are so far no clear answers to them. I think everyone here would agree: somebody must bear the responsibility for each and every piece of land, even in a country as vast as ours. If there is no one in charge, if there is no landlord in the broadest sense, it will always be a mess. In general, it is the municipal officials who are usually accountable. It would be therefore quite logical to include municipal improvement among the criteria for evaluating local government performance.

”Somebody must bear the responsibility for each and every piece of land, even in a country as vast as ours. If there is no one in charge, if there is no landlord in the broadest sense, it will always be a mess.“

Municipal officials have suggested that amendments are introduced in the federal legislation to specify certain aspects of this work. If that is necessary, let's do it. I look forward to hearing your proposals on improving the federal legislation. Naturally, I am ready to issue instructions to the Government regarding your proposals and to organise cooperation with our legislators.

I think we are also all aware that the regulations here should be flexible and reflect regional and local demands. That is what makes it local self-government: it cannot be absolutely uniform across the country; this does not exist in any country in the world, and even less so when it comes to such a large state, both in the total area and population size, as Russia, and one based on the federal principle. So we are looking to combine two aspects: a reasonable degree of consolidation across the country and specific local circumstances, and that is the balance which must be reflected in the legal regulation of municipal self-government.

The main problem is obvious: there is not enough money, which is often used as an explanation for low living standards, and that is indeed a very important factor but not the only one. We all know that money can be disposed of in different ways, and there are some examples where territories separated by just 50 meters look totally different – they fall under different municipalities, different officials who have different criteria for assessing the work of their subordinates and, accordingly, they achieve different results.

”It is important to encourage people to seek information and to communicate with the authorities electronically. We can introduce all sorts of different technologies, modern and smart, but if our citizens do not use them, if there is no widespread acceptance of these technologies, then we’ll be just marking time.“

One of the sources of revenue for local budgets is land tax, which local budgets receive in full but its collection is far from perfect; it is incomplete because of the complexity of the land rights registration process and property valuation. In addition, a large number of land plots are exempt from taxes because federal facilities are based there. In some regions, such lands constitute, in effect, the vast majority of the land. Following a meeting I held in Mari El, I issued instructions to the Government to deal with this situation. I hope to hear today what has been done and what remains to be done in this regard.

But the problem is not only the shortage of funds, as I have already said, but also the inefficient use of our resources. Last year, local budget revenues amounted to approximately 2.4 trillion rubles, or about 18 percent of the consolidated budget of the Russian Federation. At the same time, we must admit that the financial control institutions have been set up in only one third of municipalities. Of course, to establish similar control agencies in all municipalities is impossible as well as pointless (we have about 24,000 municipalities), but it is the responsibility of municipal authorities to develop a control system, particularly through or with the help of e-government, which must include a control mechanism and have maximum transparency for the public. It is vital that people receive competent answers to the issues that concern them. The vast majority of issues that are important for our people are connected with municipal self-government and with the competence of municipal authorities.

It is important to encourage people to seek information and to communicate with the authorities electronically. We can introduce all sorts of different technologies, modern and smart, but if our citizens do not use them, if there is no widespread acceptance of these technologies, then we’ll be just marking time. After all, only those countries have a successful e-government where the people have experienced for themselves the need to move into e-governance. Of course, a great deal in this respect depends also on municipal leadership.

In 2004, the Housing Code was adopted, defining new forms of residential block management with the involvement of management organisations or through the creation of condominiums. They were created in order to properly manage housing and resolve any problems that may arise, providing quality and, I stress, inexpensive, reasonably priced services. Unfortunately, we must admit that the expectations have not been fulfilled. Signs have been changed – we used to have Repairs and Maintenance Departments, Local Building Administrations and other offices, and now they have new and better-sounding names, they are called management companies, but the style of their work has often remained the same, and cases of fraud involving public utilities payments are not uncommon. The operation of many such companies is non-transparent, they are often associated with local officials, and there is no feedback from consumers. And the decisions that are taken, including on the most sensitive issue, the tariffs, are often not clear, no explanation for them is provided, and people do not understand the motivation behind these decisions. And that is what I see everywhere I go, especially in smaller towns where the income level tends to be low.

Recently I visited the Kursk Region. The main issue raised by the people I spoke with was utility tariffs. The situation is different in larger cities, but there is also lower unemployment and better opportunities to earn a living. In any case, this state of affairs cannot be tolerated, the rights and responsibilities of managing organisations must be clearly defined, and their liability for noncompliance with legislation must be increased, including for violation of standards for disclosing information about their work.

People should be encouraged to get more actively involved in enhancing residential grounds and streets through condominiums, local territorial public administration bodies and the so-called socially oriented non-governmental organisations. That is an obvious solution; after all residents are responsible for municipal improvement in many parts of the world, or at least they become active and interested parties in this process.

Colleagues, in the course of my trips around the country I have become convinced that despite the difficulties of the transitional period, which is not over in our country yet, and the great complexity of the problem given the large size of the country, local self-government is making great strides forward. At present, municipal bodies employ many highly competent, decent and responsible people, who are dedicated to their work and who serve the public, especially because it is to you that people come with their concerns and their problems. The success of the efforts being undertaken in the country as a whole in many ways depends on your work.

I would like to take this opportunity to once again thank all the municipal employees who carry out their duties with dignity, and for their hard and conscientious work.

October 5, 2010, The Kremlin, Moscow