GEO

The new Local Self-Government Code: Overview of the main novelties

10 March, 2014

On 5 February 2014 the Parliament of Georgia approved on the third and final hearing the new Local Self-Government Code, which brings about certain changes in the current local self-government system:

Local Self-Government Code

The Local Self-Government Code amendments combines several legislative acts regulating self-governance. Following its enactment, the following laws will be repealed:

  • The Organic Law of Georgia on the Local Self-Government;
  • The Law of Georgia on the State Supervision over Activities of Local Authorities;
  • The Law of Georgia on the Capital of Georgia - Tbilisi;
  • The Law of Georgia on the Property of a Self-Governing Unit.

Administrative-Territorial System

Self-governing status will be granted to 7 cities. In 3 months the number of new municipalities to be added to the current 69 self-governing units will become known.

Currently there are total of 69 self-governing units in Georgia. As a result of the reform, self-governing city status will be granted to additional 7 cities: Telavi, Ozurgeti, Zugdidi, Ambrolauri, Gori, Mtskheta and Akhaltsikhe. Their adjacent villages will be transformed into municipalities. At this stage the number of new municipalities is not determined. Within three months from publication of the Code, the Governmental Commission will draft and submit to the Government of Georgia the proposals on setting up the new self-governing communities (municipalities). Further, within one month from publication of the Code, the Governmental Commission for Regional Development of Georgia will develop criteria for setting the borders of newly created municipalities.  

Our Assessment:

We believe that this Code was adopted late and setting up new units a few months ahead of local elections will cause problems. The authorities will have to undertake considerable work within a very short period of time.

Election of Gamgebeli/Mayor

Unlike the Organic Law currently in effect, pursuant to the Self-Government Code a Gamgebeli (local governor) (Mayor) is elected directly by voters. At the first stage a Gamgebeli (Mayor) is elected for 3 years. This term will change in 2017 and they will be elected for 4 years.

According to the amendment to be made to the Election Code, a 50% threshold will be introduced for electing city Mayors and municipality Gamgebelis.

Our Assessment:

Introducing a direct vote and the 50% threshold for electing the Mayors and Gamgebelis is a positive development. Yet, two key issues still require attention with respect to electoral system and we hope the authorities will take them into consideration as well. In particular:

  • To secure equal voter representation, multi-mandate election districts should be introduced instead of a single-mandate election districts. The number of mandates in the Sakrebulos (local council) should be distributed in accordance with the number of voters in a concrete settlement;
  • A current norm of the Law should not be revoked and initiative groups  should still have the right to nominate independent candidates in the Mayor/Gamgebeli/Sakrebulo elections.

Declaring a No-Confidence Vote in the Gamgebeli/Mayor

Pursuant to the Code, a non-confidence vote may be declared to a directly elected Gamgebeli (Mayor) and s/he may be dismissed from office. Article 51 of the Code entitles the Sakrebulo to declare a non-confidence vote to a Gamgebeli/Mayor elected by majority of voters. Support of 2/3 of the Sakrebulo members will be sufficient to exercise this power. 20% of voters can also request declaration of a non-confidence vote to a Gamgebeli (Mayor).

Our Assessment:

This mechanism can be politically abused. Namely, the Sakrebulo may initiative a non-confidence vote process if there is party or other type of confrontation between the Sakrebulo majority and a Gamgebeli (Mayor). At the same time, this article restricts the degree of legitimacy of elected Gamgebelis and Mayors and makes them dependent on the Sakrebulo. Further, this article contradicts the population's choice and expressed will, which may result in an unstable political environment.

Supreme Self-Government Official

Whereas under the current legislation a Sakrebulo Chair is the supreme self-government official, after the reform a directly elected Gamgebeli/Mayor will become the supreme self-government official.

Our Assessment:

Pursuant to the Local Self-Government Code, Sakrebulo is the body that makes key decisions, manages policies at a local level, while the municipality Gamgeoba (local governor's office) (City Hall) is obligated to enforce the decisions adopted by the Sakrebulo. Further, by taking into consideration the fact that Sakrebulo can declare a non-confidence vote to a Gamgebeli (Mayor), it is unclear why a Gamgebeli/Mayor is the supreme self-government official. This once again attests to the fact that the Sakrebulo should not enjoy the right to declare a non-confidence vote to a directly elected Gamgebeli/Mayor without due justification.

Dismissal of Sakrebulo, Early Suspension of Its Activities

In case of dismissal of the Sakrebulo or suspension of its powers, the Code authorizes the Government of Georgia to decide to introduce direct state governance, exercised through the trustee of the Government of Georgia or a collective body - ad-hoc administration.

Our Assessment:

This norm does not contain any gaps. Introducing a direct state governance is crucial in that municipal services are provided uninterruptedly in case the Sakrebulo is dismissed or its activities are suspended.

State Supervision over Local Authorities

Current legislation stipulates that the state trustee - governor supervises the activities of local authorities, including legal supervision. Under the new Code, the Prime Minister of Georgia will exercise legal supervision over a municipality's activities.

Our Assessment:

We consider that during the exercise of legal supervision over local authorities, in light of the issue’s contents the Prime Minister should involve a relevant ministry in the preparation of conclusion and recommendations so that such conclusion and recommendations offered to a self-government authority are full and competent.

State Trustee - Governor

A consultation body of municipalities – “Regional Consultation Council” – will be set up with the state trustee – Governor, with the following powers:

  • Examination of projects and programs to be implemented by the state in the relevant territory at the submission of the state trustee – Governor and their budget estimates;
  • Examination of the socio-economic development strategy of territory subordinated to the state trustee’s – Governor’s powers;
  • Development of relevant recommendations for the state trustee – Governor.

Ex officio members of the Consultation Council will be the Gamgebelis/Mayors, Sakrebulo Chair and the Deputy Sakrebulo Chair of relevant municipalities. The Consultation Council will convene at least once in a quarter and will render recommendatory decisions.

Procedural rules of the state trustee – governor and its administration are defined by the 29 November 2013 Resolution N309 of the Government of Georgia on the Approval of Regulations of the State Trustee – Governor.

Our Assessment:

Prior to the enactment of the Local Self-Government Code, the Regulations of the State Trustee – Governor should be amended and Sub-Paragraphs ‘ფ’, ‘გ’ and ‘ჰ’ of Paragraph 2 of Article 10 of the Regulations should be invalidated, which entitle the “Local Authorities Relations Office” of the state trustee – Governor to exercise legal supervision over self-governments and prepare proposals for suspending the Sakrebulo’s activities or dismissing it. Further, the form of this Office’s future functions should be defined, as currently its key powers are linked to supervision over local self-government.

Self-Government in Villages

Initial version of the Code advanced the idea of establishing a Public Council created based on civil principles at the level of villages, which should have managed the primary needs of the self-government competencies. However, eventually this idea was given up and pursuant to the Code a Gamgebeli will be authorized to appoint in the municipality’s administrative unit a Gamgebeli’s representative – a “Village Trustee”, whose powers will be determined by the Regulations of the municipality Gamgeoba.

Our Assessment:

We find it would be better to grant to the Gamgebeli’s representative powers that would ensure maximum citizen participation as during the identification of problems within the administrative unit, as well as throughout seeking ways for their solution and drawing up the budget of a relevant municipality. Gamgebeli’s representative should be obligated to convene over a certain period of time a village assembly and make decisions within his/her competence through direct communication with the population.

Fiscal Decentralization

Pursuant to the Organic Law currently in effect, the local self-government’s own revenues include a property tax, local fees and an equalization transfer. Whereas according to the planned reform, the financial resources of local self-government will increase by a “shared tax”: a portion of the income tax paid by a person registered and employed in the territory of a self-governing unit will remain with the same self-governing unit. In addition, along with special and targeted transfers, the municipality’s budget will receive capital transfers.1

Under the Code, until 1 September 2014 the Government of Georgia will submit for consideration to the Parliament of Georgia the Draft Law on the “Amendments to the Budgetary Code of Georgia”, which should define the proportion and mechanism of distributing an income tax among budgets of different levels, as well as the percentage ratio of entire fund of equalizing transfers to be allocated to municipalities to the nominal Gross Domestic Product and the relevant procedure for distribution of equalizing transfers.

Our Assessment:

Regulation of a proportional tax is not quite clear. Yet, it is important that unlike the initial version of the Code, 1 September 2014 instead of 2015 is set as the deadline for making mandatory amendments to the “Budgetary Code of Georgia”.

Further, it is unclear as to how will the budget balance and obligations taken at the start of a budgetary year will be distributed between a self-governing city emerged after the elections and a municipality.

It is crucial that financial independence of self-governing cities and municipalities is secured in the aftermath of the reform. The economic development strategies should be developed for each municipality and a self-governing city so that they are able to realize their rights effectively. At the same time, the costs of each municipality during the discharge of its individual powers should be calculated.

Part of tax benefits in respect of a property tax available under the Tax Code of Georgia should be revised. In addition, the 1998 Law of Georgia “on Local Fees”, is outdated and fails to meet modern needs, it also requires substantial revision.

Self-governments should enjoy more independence in spending budgets. Potential administrative supervision on behalf of the state trustee – Governor should not amount to control. Further, involvement of the central authorities in the expenditure part of local authorities should be reduced to a minimum.

Degree of citizen participation in drawing up the budget and the expenditure process should increase. Prior to drawing up a budget, local self-governments should identify public needs and reflect these needs in budgets within the legal frameworks.

Number of Regular Civil Servants of a Municipality

According to the Organic Law of Georgia on the Local Self-Government, a cap number of regular civil servants of self-governments is not fixed.

Pursuant to the Local Self-Government Code, the number of civil servants in self-government will be not less than 30 regular staff units. Added to these will be a sum total of the number of single-seat districts set for the 2010 local self-government elections and one regular staff unit per every 500 voters registered in a self-government unit.

There are approximately 14 thousand employees in the self-governments, while after the reform this number will be reduced by 3 thousand.

Our Assessment:

Unreasonably inflated regular staff units often are a huge burden for a municipality’s scarce budget as it is. However, in light of a high unemployment rate in Georgia, local self-government is almost the only employment resource in the considerable number of municipalities.

Nevertheless, a municipality should be focused on the right management and effective provision of services, which requires a reasonable number of qualified civil servants.

Civil servants should be recruited and dismissed based on a contest and certification, in view of their professional skills and qualification. Recruitment process should be free from political or personal bias. A civil servant should be motivated to deliver a good and qualified work. Career growth, salary increase or social welfare should be taken into account. Therefore it is important that the Code sets a cap number of civil servants of the local self-government.

Remuneration of Civil Servants of a Sakrebulo and Gamgeoba (City Hall)

After the reform, remuneration costs of civil servants of a Sakrebulo and Gamgeoba (City Hall) should not exceed 25% of costs projected in a municipality’s budget. Currently there is no such reservation in the Organic Law and the municipalities are not restricted in determination of remuneration costs. Under the Code, reimbursement of costs of the Sakrebulo members by means of bonuses and extras is prohibited as well.

Our Assessment:

In parallel to introducing for self-governments a limit on remuneration to be given to civil servants, procedures for issuing the salary extras and bonuses should be defined. Today bonuses are given by ignoring the requirements of law and without due justification.

Adoption of procedure for issuing bonuses will bind the process by legislative frameworks, thus facilitating the formation of uniform grounds for issuing bonuses and salary extras. Such approach will in addition contribute to the savings of a municipality’s budget.

Property of a Self-Governing Unit

Property, which is necessary for exercise of self-government, is located on the territory of a specific municipality and is in the ownership of the Ministry of Economy, is arrested or is on the balance of the former farming economies, will be transferred in the ownership of a relevant municipality until 2017.

As for the agricultural land, under the Code, until 1 January 2017 the Ministry of Justice of Georgia, the Ministry of Regional Development and Infrastructure of Georgia, the Ministry of Economy and Sustainable Development of Georgia and the Ministry of Finances of Georgia will develop a relevant timeline and procedure for transferring the agricultural land resources to municipalities and will submit it to the Government of Georgia for approval.

Our Assessment:

We believe this term is reasonable because today the state does not possess systematized information on the tangible assets it owns. Often the data are outdated and based on information generated during the Soviet rule. Current procedure for transferring the property to a municipality is very complicated.

Individual Powers of a Municipality

Paragraph 2 of Article 16 of the Code defines individual powers of a municipality, including the following novelties:

  • Sub-Paragraph 'ჰ' - "Provision of water supply (including technical) and water drainage; development of a local-scale melioration system", which under the effective legislation is under the powers of the central authorities, and namely the LEPL "United Water Supply Company" of the Ministry of Regional Development and Infrastructure of Georgia";

  • Sub-Paragraph 'ქ' - Adoption of rules for keeping domestic animals and decision-making on the stray animals;

  • Sub-Paragraph 'თ' - Development of relevant infrastructure for persons with disabilities, children and the elderly at the facilities of local importance, including the relevant adaptation and equipping of public places and municipal transport;

  • In addition, the Code obligates Tbilisi to provide medical emergency service.

Our Views:

In respect of Sub-Paragraph 'ჰ'

Currently the LEPL "United Water Supply Company" of the Ministry of Regional Development and Infrastructure of Georgia is responsible for the water supply services Georgia-wide. Granting these powers to the self-government may result in the duplication of competences.

It is unclear whether this competence will be granted to the self-government entirely or certain functions will be distributed among the Water Supply Company and the self-governments. Further, it is equally unclear who will be responsible for the maintenance of the water supply and water sanitation infrastructure system. It is noteworthy also that currently majority of municipalities lacks the logistical equipment required for running a water supply system.

In respect of Sub-Paragraph 'თ'

It is vital that inclusion of this sub-paragraph in the Self-Government Code really contributes to the adaptation of physical environment to the needs of persons with disabilities. It is essential that when issuing construction permits and exercising supervision over them the relevant self-government services focus on the arrangement of organized infrastructure necessary for free movement of persons with disabilities. Certain standards should be introduced as well.


1Capital transfer includes funds allocated for building or repairing bridges, roads, cultural objects, hospitals, schools and other buildings/facilities.

Author: TI Georgia