The municipal enterprise, which was accused of the cinema “Kyiv” takeover, guards schools on the left bank of the capital. What else does it do, and why is it being reorganized now?
The recent wave of high-profile searches at municipal enterprises in Kyiv has affected not only capital construction, “Zelenbud,” and education. Possible embezzlement of budget funds were detected even in an enterprise with a law enforcement function — “Municipal Guard.” It is known first of all because of being featured in the scandal with the cinema “Kyiv” in 2019.
We found out what else this relatively young Kyiv ME is doing, what principles it operates on, and how much it costs the city budget.
Who is it?
ME “Municipal Guard” appeared in Kyiv in 2017. By that time, similar structures were already functioning in Dnipro, Kharkiv, Odesa, and some other cities of Ukraine. In fact, municipal guards in the regions are a mixture of “public order volunteers” with a security company. They have no right to detain a person without police and do not carry weapons. A law that would regulate the activity of “local militia” was developed back in 2015, but never accepted. There are concerns that legitimized municipal security forces may become “local armies” of regional elites. This danger became especially obvious after 2014.
As for now, the ME “Municipal Guard” created in Kyiv looks relatively “light” — the company covers parks, fountains, and schools. During the pandemic, it was assigned additional responsibilities: to control quarantine measures in transport and on the streets, as well as to strengthen the protection of covid hospitals.
The Kyiv City Council at one time decided on the creation of this ME not without objections but still, in the fall of 2017, the session approved the relevant decision. Then the Kyiv mayor Vitali Klitschko assured that the new municipal enterprise would allow the city to save budget funds. “The city now pays almost UAH 300 mln a year for the protection of municipal property! This ME will help significantly reduce the expenses”, stressed Klitschko.
How does it work?
To start “reducing the expenses,” the Kyiv City Council created the authorized capital of the ME “Municipal Guard” in the amount of UAH 2.5 mln. Then there were many tranches from the budget for the procurement of workwear, means of restraint, equipment, software, and everything else that security cannot work without. Since 2017, the company has received approximately UAH 415 mln (according to the data provided by hromadske). These are funds that were used to ensure the functions of protecting municipal property (defined in the list). They were used for salary and current expenses. For example, in 2019, the ME received revenues from the budget amounting to UAH 78.2 mln, in 2020, the sum already amounted to UAH 148 mln, and in 2021, it plans to receive UAH 167.7 mln.
One of the main tasks of creating the ME was also to employ participants in hostilities in the east of Ukraine, who were just beginning to return en masse from service. At the beginning of the work, the company’s staff was quite modest — less than a hundred people. However, every year the number of employees increases, and now it is 486 people. According to the data the company provided us with, 249 people currently have the status of a participant in the ATO/JFO, and another 86 employees are waiting for this status.
The ME is subordinate to the Department of Municipal Guard of the KCSA, whose activity is coordinated by Deputy Mayor Petro Panteleyev.
The company owns one real estate object on Velyka Zhytomyrska Street and one land plot. The ME also has 23 cars: ten Renault Duster 2019 cars, as well as cars of various brands produced in the 2000s.
The company received a security license from the Ministry of Internal Affairs and a license from the State Emergency Service for the operation of notification systems. Both are issued indefinitely and do not need to be updated.
What are they guarding?
Objects that the “Municipal Guard” takes care of are determined in a rather strange way. This is not the choice of the market (participation in competitions), neither the protection of all municipal objects on turnkey basis. This is a certain list of objects, which is approved by the Kyiv City State Administration by a separate order. The version of the address list in force was adopted in 2019. It contains 239 objects, of which 163 are educational institutions, 26 are healthcare institutions, and 24 are city parks. The protection of these objects is financed directly from the city budget — by the line of financing the security ME.
It is also difficult to say by what principle the list itself is compiled because these are not all parks and not all medical institutions in the city. However, it still can be considered logical. In hospitals, sometimes there are conflict situations, especially in ambulances. Parks also have problems with law and order, and some still require special protection of municipal property. However, with educational institutions, everything is complicated.
Now the ME guards 163 schools and kindergartens of one Dniprovskyi district and several other institutions of the Pecherskyi district (the figure is changing).
How does it work with schools?
In 2018, parents of 12 Kyiv schools created an initiative with a request to provide their institutions with protection at the expense of the local budget. The initiative was adopted and left to the mercy of commissions of the Kyiv City Council.
“This initiative passed through the Budget Commission. At the same time, our budget issues related to “Municipal Guard” were being resolved, and they offered it to us for protection. It was an interesting experiment for us to work out the specifics of working with schools. And such an experimental project was the protection of these schools at a local initiative plus all schools in the Dniprovskyi district”, Oleh Kuyavskyi, first deputy director of the Department of Municipal Guard of the KSCA, told DOZORRO.
Interestingly, at that time, the chair of the Budget Commission was MP Andrii Strannikov, who for many years have represented the Dniprovskyi district in the Kyiv City Council.
According to Kuyavskyi, for a year and a half of cooperation between the “Municipal Guard” and the district’s schools, the reviews were positive. Now they are considering expanding the project from one experimental district to the whole Kyiv.
“However, if to take on physical protection of all schools in Kyiv (this is 550 schools), when working for a day or three, it requires more than two thousand employees on the payroll only for the protection of schools. This will involve quite significant funds” Kuyavskyi emphasized.
Therefore, they are now considering a compromise option for expansion — “Municipal Guard’s” alarm buttons will be placed in schools of two more districts.
“Perhaps by the end of the year we will have covered the entire left bank of Kyiv. Now we are preparing to take on schools in the Darnytskyi district. For the fourth quarter we are applying for an increase in staff by 150 people, and then we will be able to protect schools in the Desnyanskyi district as well,” said Oleh Kuyavskyi.
The Department of Education of the Desnyanskyi District of Kyiv, where we asked about future cooperation with the “Municipal Guard,” has not yet heard anything about these prospects.
We also checked what the ME’s security looks like onsite. In the library and two schools of the Dniprovskyi district from the address list, there is indeed a sticker on the doors about protection from municipalities. Inside the room there is an alarm button for calling employees of the security ME. That is, “Municipal Guard” is not physically represented anywhere — it is only a call to the team when in need.
“The guys came, and more than once. There are, you know, some conflicts with students, or if someone breaks into the school without permission — then we call. They arrive, calm people down, if necessary, call the police, and monitor the situation until they arrive,” shared the on-service duty attendant of one of the schools.
However, in all these establishments there were also alarm buttons from a private security company known in the Kyiv market. The deputy director of one of the schools explained it this way: “The municipal one keeps order, if there are any conflicts, it should help, and that button is the protection of school property.”
So, the institutions that “Municipal Guard” deals with also turn to private firms for services. For example, Vasyl Sukhomlynskyi college spent UAH 20,000 this year for servicing the alarm button from private security guards. The Department of Culture of the Dniprovskyi Regional State Administration in 2020 acquired security of libraries for UAH 111,000. Oleksandrivska Hospital, which still remains under special attention of “Municipal Guard,” also buys other object security and alarm button services from the Kyiv Security Police Department (at its own expense).
That is, in fact, the promised budget savings, which Klitschko spoke about during the creation of the ME, means that several city facilities have received additional public order protection. However, it is not a matter of a complete refusal of security services provided by private firms.
Non-commercial, non-competitive, and with questions from the AMCU
ME “Municipal Guard’s” relations with the market of security services are not good at all. According to Kuyavskyi, the additional funds earned amount to approximately UAH 1-1.5 mln per year. For comparison, this year alone, the enterprise received approximately UAH 167 mln directly from the budget. Now the ME is in the state of reorganization, it will be turned into a municipal organization. In fact, this means that “Municipal Guard” will no longer be tasked with making money because the organization must be non-profitable. It will simply be a municipal structure that performs certain functions for a certain protected budget financing.
This happened for several reasons. The first one — complaints from the Anti-Monopoly Committee, or rather its Northern Territorial Department. The AMCU conducted a study and came to the conclusion that the Kyiv City Council must hold an open competition for security services providers for its institutions because the budget financing scheme itself creates competitive advantages for ME “Municipal Guard.”
‘The representatives of security companies that have never actually participated in similar competitions in Kyiv appealed to the AMCU with a statement about unfair competition, so, it was a little strange for us”, Oleh Kuyavskyi noted in a comment to DOZORRO.
However, the department was not only surprised by the attention of the AMCU, but also contested the decision of the Northern Territorial Department in court. In 2020, The Economic Court of Kyiv ruled in favor of the KCSA and invalidated AMCU’s decision. The Appeal supported this solution. However, the court of cassation in 2021 canceled the decision of previous instances and sent the case for a new hearing. In its opinion, previous instances incorrectly applied some legal norms.
The KCSA drew conclusions from this attention of the anti-monopoly authorities and, to permanently remove the issue of competition, will simply reorganize the ME into a MO.
The department also stresses that an important function of the former ME is the social adaptation of the ATO participants. In addition, all employees have an official salary (unlike many in the private sector), so, there is no real competition in the market. In addition, “Municipal Guard” already actually provides services exclusively to objects of municipal property. And the real state of affairs was made official.
Participation in tenders
Actually, for all the above reasons, it is practically impossible to track the true picture of cooperation between ME “Municipal Guard” as a service provider on Prozorro. The electronic system includes single contracts, mostly just reports, sometimes even for services for UAH 1.2.
In total, during its existence, ME “Municipal Guard” conducted procurement transactions worth more than UAH 53 mln. These were procurement of notification systems (the very same alarm button), and licensed equipment, badge cameras, uniforms, and even expensive health insurance.
In addition, at the end of last year, the ME conducted a series of procurement transactions related to the use of weapons (of non-lethal action): pistols with rubber bullets for almost UAH 2 mln, workshop on use of these weapons, special furnishing of a storage room for weapons, all this despite the fact that as of now (July 2021, and procurement as of the end of 2020), ME employees do not yet have a special permit for the use of these weapons from the Ministry of Internal Affairs. As reported in the KCSA, now they are “at the stage of obtaining.”
One of the early procurement transactions of ME “Municipal Guard” became the subject of attention of law enforcement officers. Recently, Kyiv City Prosecutor’s Office has sent an indictment to the court concerning the ex-head of this enterprise regarding the misappropriation of funds in the amount of UAH 580,000.
According to the materials of the pre-trial investigation, ME “Municipal Guard” purchased professional training services. We are talking about two procurement transactions in 2019 — “professional training and advanced training of security guards,” for 300 and for 370 trainees, with the issuance of a state certificate. According to the prosecutor’s office, in fact, the training did not take place, but the funds were transferred to the enterprise. The accused is the first head of the ME, Aleksandr Katsubo. He was dismissed from his post back in 2020. After Katsubo, the company has already changed five managers.
One way or another, “Municipal Guard” consists of almost half a thousand trained people (and before them twice as many colleagues from the CSO “Municipal Guard” who do not receive salaries, but partially are financed from the budget). All of them depend solely on the local authorities because it is they who pay these people. As we can see, they constantly come up with work for them — making up lists of objects for protecting or patrolling streets and parks. The same law enforcement officers are available for involvement by the city authorities in one-time actions: football matches, public events, rallies. It is difficult to determine where the line is between helping with public order and protecting the decisions and events that the city authorities need.
In particular, such a wake-up call was already noticed during events around the capital’s “Kyiv” cinema. Then the city authorities broke off lease relations with the management of the Cultural Center “Kyiv,” and it was the “Municipal Guard” fighters who helped evict the former tenant. Those events caused a very ambiguous attitude of the city’s public: the actions of the authorities were called a hostile takeover.
Then the Department of Municipal Property of Kyiv stated that the Cultural Center “Cinema ‘Kyiv’” was warned about the termination of the lease of premises, while the Center stressed that it was a hostile takeover. Recently, the court has had its say in this case and returned the premises of the cinema to the former tenants, the cultural center.
Let us remind you that the budget of the “Municipal Guard” is growing every year and is no longer estimated in millions, but in hundreds of millions of hryvnias. The material base of the ME is fully formed at the expense of the budget, but the company cannot compete in the market of specialized services. The work for “Municipal Guard” is formed by an address list, the mechanism of compilation of which is quite subjective. The institutions that the ME deals with often re-order security services on the market, offsetting the idea of savings. Thus, we have another fully subsidized ME, which operates under the KCSA just in case of a critical event.