Mykolaiv authorities plan to return to the sale of communal property

This year, Mykolaiv City Mayor Oleksandr Sienkevych plans to propose the issue of privatization of communal property to City Council members.

The mayor of Mykolaiv said this on January 4, answering a question from a NikVesti correspondent during his press conference.

The journalist asked the mayor whether the city authorities are considering options for finding sources of filling the budget of Mykolaiv, which will actually lose 2.7 billion hryvnias of «military personal income tax» that was withdrawn from the state budget this year. The idea of selling real estate owned by the city or loans was voiced as a possible option. The mayor stated that Mykolaiv is «not far» from property privatization in order to fill the budget. Also, in the near future, auctions will be held for the lease of communal property, which was vacated during the full-scale war.

«We are considering the possibility. It's not far. Even before the New Year, we met with First Deputy Vitalii Lukov and Acting Tetyana Dymytrova, head of the communal property department, regarding the privatization process. In the near future we will have several competitions, we will offer to rent some property. And I think that we will propose to the deputies, if such a situation arises, sometime in the second half of the year, to take the objects for privatization. The list of these objects is known. Most of the normal objects are rented,» said Oleksandr Sienkevych.

Moratorium on privatization of communal property

The mayor of Mykolaiv recalled how in 2016 he promised the decision of the city council to privatize 20 objects.

«You remember that once back in 2016, I promised a decision on privatization. At that time, this decision was prepared by the previous convocation of the city council, and the value of this property was minimal,» the mayor said.

He noted that now privatization issues will be resolved at auctions, and whoever offers the highest price will win.

«During this time, the legislation has already changed, in fact, auctions will already be open today. The interesting thing is that the person who rents it and invested money in it may not win the property, but someone else who will buy it more expensively will win. This is also possible. These objects are for rent today. Actually, I see no point in privatizing those that are efficient and bring a normal rent to the budget,» Oleksandr Sienkevych said.

Back in 2017, a memorandum was signed between the Mykolaiv City Council and the state enterprise «Setam» for public auctions for the sale of communal property.

In 2021, the process of leasing and selling communal property through the ProZorro public procurement system began in Mykolaiv. In June 2021, the vice-mayor of Mykolaiv Vitalii Lukov said that there are about 3.5 thousand real estate properties in Mykolaiv that belong to the community. About 1,200-1,300 of them can be rented out. The rest of the city uses health care, education, accommodation of state institutions, etc. for its activities. According to the deputy mayor, such auctions helped increase the cost of renting premises tenfold.

At the same time, a draft decision on the privatization through auction of 117 communally owned objects, including utility rooms, buildings of former boiler houses, medical facilities, and basements, appeared on the website of the Mykolaiv City Council.

What about military personal income tax?

As you know, within the framework of the law «On the state budget for 2024», the Cabinet of Ministers plans to direct all revenues from the personal income tax of military personnel, 64% of which currently remain in local budgets, to the state budget. The Association of Cities of Ukraine believes that these funds will most likely be dissolved in the state budget, as well as 36% of the current personal income tax, which is administered by the Ministry of Finance. We are talking about 25.8 billion hryvnias this year and 93.7 billion hryvnias next year, Prime Minister Denys Shmyhal clarified the day before.

The Verkhovna Rada of Ukraine can allocate over 517 million hryvnias to the communities of the Mykolaiv region to compensate for the loss of personal income tax from military income.

On October 6, 2023, it was reported that the Budget Committee of the Verkhovna Rada reviewed the decision on the draft law on personal income tax from the military and made amendments: from October 1 to December 31, 2023, the «military» personal income tax is directed to the state budget in the proportion of 50% to 50%. One part of 13 billion hryvnias will go to the State Service for Special Communications and Information Protection of Ukraine for drones, and the second part, also 13 billion hryvnias, will be directed to the Ministry of Defense for the purchase of artillery systems.

Earlier, the mayor of the city Oleksandr Sienkevych said that the military personal income tax withdrawn from the budget of Mykolaiv will be directed to the production of weapons, in particular, drones for the Armed Forces of Ukraine.

The Mykolaiv city council will reduce the number of employees due to the reduction of the city's budget by almost two times.