Running Mykolaiv City Hall costs nearly ₴1 million a day: Mayor plans major staffing and structural reforms

The maintenance of the Mykolaiv City Council and all its departments, offices and district administrations is an expense that is borne by taxpayers every year. In 2025, 351,662,508 hryvnias was allocated for salaries for all city hall officials. This is only the money for salaries and bonuses of officials of various departments and offices; it does not include teachers, doctors, cultural workers or utility companies. The amount is huge, but it sounds abstract to an average city resident — until we translate it into simple, understandable language: How much does one day of city management cost?

If we divide this amount by 12 months, we get about 29 million hryvnias per month. If we divide the annual amount by the number of calendar days (365), the cost of one day of city management will be 963 thousand 742 hryvnias per day.

That is, every day, regardless of holidays, weekends or vacations, Mykolaiv residents spend almost 1 million hryvnias on salaries of city hall officials alone. This is almost: 40,155 hryvnias per hour, 669 hryvnias per minute, 11 hryvnias per second.

Salary fund of Mykolaiv city council fund managers

№	Name of the fund manager	2025	2022
1	Administration of the Central District of Mykolaiv City Council	₴17287545,00	₴13773200,00
2	Administration of Ingulskyi district of Mykolaiv city council	₴17287545,00	₴13513300,00
3	Administration of Korabelnyi district of Mykolaiv city council	₴13830034,00	₴10135000,00
4	Administration of Zavodskyi district of Mykolaiv city council	₴16973226,00	₴13253500,00
5	Department of Internal Financial Control, Supervision and Anti-Corruption of Mykolaiv City Council	₴9880599.00	₴8134200.00
6	Department of Finance of Mykolaiv City Council	₴15617721,00	₴12857200,00
	Department of Land Resources of Mykolaiv City Council	-	8134200.00
7	Department of Administrative Services of Mykolaiv City Council	₴31098881,00	₴20991400,00
8	Municipal Property Department of Mykolaiv City Council	₴7012038.00	₴4985400.00
9	Department of Emergency Situations and Civil Protection of the Population of Mykolaiv City Council	₴8924412.00	₴5772600.00
	Department of Architecture and Urban Development of Mykolaiv City Council	-	₴8134200.00
10	Department of State Architectural and Construction Control of Mykolaiv City Council	₴7649496.00	₴4198300.00
11	Capital Construction Department of Mykolaiv City Council	₴7012038.00	₴4723100.00
12	Department of Energy, Energy Saving and Implementation of Innovative Technologies of Mykolaiv City Council	₴5418393.00	₴5772600.00
13	Department of Housing and Communal Services of Mykolaiv City Council	₴25817049,00	₴21778500,00
14	Department of Physical Culture and Sports of Mykolaiv City Council	₴2231103.00	₴1836700.00
15	Department of Culture and Protection of Cultural Heritage of Mykolaiv City Council	₴3506019.00	₴2886300.00
16	Department of Labour and Social Protection of the Population of Mykolaiv City Council	₴53748549,00	₴49375700,00
17	Department of Health Care of Mykolaiv City Council	₴4780935.00	₴3935900.00
18	Department of Education of Mykolaiv City Council	₴6693309.00	₴5510200.00
19	Executive Committee of Mykolaiv City Council	₴96893616,00	₴69231334,00
	Total	₴351662508,00	₴288932834,00

This understanding is important not just for controlling the numbers. It brings us back to a fundamental realisation: officials are not «bosses», but hired employees of the community. Residents, in turn, as taxpayers, finance their work and expect results, not declarations.

Awareness of the value of governance is the basis of a social contract, where city residents are employers and officials are their employees. That is why the issues of efficiency, transparency and accountability of the authorities are not abstract conversations, but the right of every resident to fair and reasonable use of common resources.

Comparing the figures of the pre-war budget for 2022 and the current budget, it becomes obvious that in 2022 the cost of running the city was ₴288.9 million, while in 2025 this amount has already reached ₴351.6 million.

Despite the loss of the military income tax (the so-called military personal income tax), which, according to Mayor Oleksandr Sienkevych, cost the city about ₴2.7 billion, the cost of maintaining officials has not decreased, but even increased. Of course, the exchange rate and inflation rate have changed over this time, but it is important that amid economic difficulties, the city has not yet taken the path of reducing or optimising its management costs.

At the same time, international donors who are helping Mykolaiv City Hall improve the quality of governance commissioned a report from Ernst & Young, a company from the «Big Four», whose experts analysed the structure, functions and staffing of each department, studied their responsibilities and provided recommendations.

«Two subordinates for one boss» and other auditors' comments

In April, during the presentation of the audit results, EY Ukraine's Advisory Practice Leader Kostiantyn Neviadomskyi stated that Mykolaiv City Council has a lot of officials. It is worth noting that the number of employees of executive bodies is 1,115. However, as Yuliia Mincheva, advisor to the mayor, said during the presentation in response to a clarifying question from the journalist of NikVesti, the actual number of employees is about 15% less, which is approximately 948.

«This is a large organisation. The number of employees is very high. This is important because it sets the context that the management of such a large number of people needs to be organised systematically. There are 374 managers for the number of approximately 1,100 employees. This was an input for us. This is neither good nor bad. It is a fact. It was a signal for us to look at this aspect,» said Kostiantyn Neviadomskyi.

According to Ernst & Young, such a staffing level of Mykolaiv City Hall is an anomaly.

«We made a comparative analysis with global practices and other Ukrainian cities. Compared to other cities, the Mykolaiv City Council has a large number of staff in general. We are recording this fact. It does not mean that it is good or bad. This is an anomaly, something different, where we really need to delve deeper and see the reason. Because there may be correct and logical reasons behind it,» he said.

Ernst & Young pointed out that the city budget per official in Mykolaiv City Council is much lower than in other Ukrainian cities.

«I understand that it is a little bit incorrect for Mykolaiv City Council to talk about «added value» from the business point of view, but it is still a set of services for the population, for residents. And this is one of the indicators that show the efficiency of work. The number of employees per number of residents, or per budget,» said Kostiantyn Neviadomskyi.

According to the staffing table in the organisational structure of the city hall, 34% of the total number of staff are managers.

«There are a large number of management levels — 9, which is due to the large number of structural units and the presence of deputy positions at different levels. There are two employees per manager. And this is due to the small number of employees in the departments. This is also a discrepancy, or I would say, a rather unusual ratio, if we are talking about the norm of manageability,» said Kostiantyn Neviadomskyi.

Mykolaiv City Council currently has 21 spending units (departments of education, healthcare, culture, etc.), which is a lot compared to other Ukrainian cities.

«There is a large share of administrative staff. If we talk about the total number, it is 38%, which is a rather large ratio. This means that the administration, the back office, the back office serves the main departments that are engaged in the main services and activities of Mykolaiv City Council. This ratio is quite high,» said Kostiantyn Neviadomskyi.

According to him, the problems of executive bodies also include incompatible powers, uneven distribution of powers between the mayor and his deputies, and the combination of representative and executive powers.

When analysing the salaries of city hall employees, the auditors stated that their level in Mykolaiv city council is currently below the market average.

«This is definitely a big barrier to attracting qualified and motivated staff. It's not impossible, I wouldn't say that the people we met in Mykolaiv city council are unmotivated and don't work well. But it is much harder to find people who have motivation beyond money. And I understand the important and hard work that the city council is doing to really engage staff and maintain the level of minimum service. When we looked at the details, we realised that this large number of managers is an opportunity to pay people at least a little more. Many of them are «managers», although they just do a good job. Some career steps are used to raise the level of salaries at least a little bit. Although, once again, the level of salaries of the city council employees is below the market level. According to Ukraine, the region, in any comparison,» said Kostiantyn Neviadomskyi.

According to the results of the analysis, the auditors identified a number of systemic shortcomings in the organisation of work of certain structural units, in particular, duplication of powers between executive bodies.

In addition, the level of digitalisation and IT infrastructure in the city council was analysed, which revealed, among other things, the lack of an electronic queue system for administrative services, insufficient integration with state registers, the problem of ensuring cybersecurity of document flow, a large number of non-digitised paper documents, etc. Although these problems are apparently typical for local authorities, the auditors noted that Mykolaiv has a rather low digital transformation index compared to other cities.

In response to these comments, the mayor of Mykolaiv, Oleksandr Sienkevych, together with his freelance advisor, Yuliia Mincheva, developed a draft new structure that is expected to be another attempt to reform the city's governance system.

New IT deputy and elimination of departments

The city's management system should not depend on the personality of the mayor, deputy mayor or head of department. The mayor of Mykolaiv began his presentation of the new city hall structure with these words.

«The system should not depend on the personality of the mayor, deputy mayor, head of department or department director. It must be logical, comply with the laws of logic and best practices, because, unfortunately, ideal conditions are not always realisable in real life,» said Oleksandr Sienkevych.

In particular, as part of the reorganisation, it is planned to reduce the number of management levels from 9 to 5 (mayor, deputies, heads of departments, offices, divisions), enlarge departments and set a minimum number of 7 employees per department.

Responding to Ernst & Young's comments on the proportion of managers in the total number of officials, the mayor of Mykolaiv said that this number would be reduced to 20% of the number of employees.

The new structure envisages centralisation of service functions at the level of the executive committee, including procurement, accounting, IT, HR, and legal support. In general, it is proposed to reduce the number of spending units from 21 to 9.

The draft of the new structure provides for an increase in the number of deputy mayors to seven. It is planned to create the position of vice mayor for digitalisation. It should be noted that the current structure of Mykolaiv City Hall has six deputies, including the manager of the executive committee.

«All processes need to be digitalised. And thanks to digitalisation, the number of officials will be reduced in the future,» said Oleksandr Sienkevych, explaining the need for a new deputy.

According to the presented structure, the new deputy will be responsible for the Digital Transformation Department.

Answering a question from a journalist from NikVesti about the feasibility of introducing another deputy mayor position, Kostiantyn Neviadomskyi, Ernst & Young's Advisory Practice Leader in Ukraine, expressed the position that digital transformation is a strategic direction.

Another of the fundamental changes proposed by the mayor of Mykolaiv is to reduce the powers of administrations and lose their customer functions. It is expected that the reform of district administrations will take place at the second stage of the new structure, starting in 2026, if a decision is made to change the structure of executive bodies.

According to the mayor of Mykolaiv, district administrations will lose the functions of commissioning street cleaning, road repairs in the private sector and the elimination of illegal dumps. In fact, he confirmed, the administrations will be the front office of the Department of Administrative Services, working with the public.

The new structure will also eliminate two departments created at the beginning of his term: anti-corruption and energy.

These departments were formed in early 2017 as a compromise between the political forces that joined the Mykolaiv City Council after the local elections in 2015. «Ihor Diatlov's Opposition Bloc» ran for election with the programme «Warm House» and received the energy department, while Mayor Oleksandr Sienkevych promised to fight corruption and illegal kiosks and advertising, for which he created an anti-corruption department.

The draft of the new structure of the city hall envisages a reduction in the number of executive bodies of Mykolaiv city council. In particular, it concerns these two departments, whose functions will be divided into several divisions.

As for the Energy Efficiency Department, Oleksandr Sienkevych stated that it will become a department within the Capital Construction Department.

The functions of the anti-corruption department will be divided between two newly created departments: the internal audit service and the landscaping inspection.

How much money will the new structure of Mykolaiv City Hall save?

The mayor's office is not yet able to say any specific amount, while Oleksandr Sienkevych called the issue of budget savings due to changes in the structure of the executive bodies of the mayor's office a debatable one.

He believes that the salary fund will not change significantly with the change in the number of employees.

«As the professional workload of employees increases, it will be necessary to increase financial resources. If we want to get more competitive employees.» And of course, some money, 10% or whatever, will be eaten up by «our inflation next year. Forecasting the next year's budget, I cannot say that the costs of maintaining city council employees will be drastically reduced. It is as it is,» said Oleksandr Sienkevych.

At the same time, he believes that the city will save budget funds by reducing corruption and increasing the efficiency of budget spending.

«If we are talking about comparing today's budget with next year's budget, we understand that we will reduce corruption and increase the efficiency of using budget funds, we will increase the additional funds that we will have for distribution in the budget. Our task is to save money on the efficient use of budget funds: on procurement, on optimising services and on eliminating corruption risks in these procurements,» said the mayor of Mykolaiv.

How much will the number of officials in Mykolaiv City Hall be reduced?

As of today, the number of employees of the executive bodies of Mykolaiv City Council is 1115, taking into account the changes to the structure made at the last session of the City Council held on 24 April.

Answering a clarifying question from a journalist from NikVesti about how the number of employees at the city hall will change after the structure changes, Oleksandr Sienkevych said that this number will decrease, but the city hall does not know how much.

«We will reduce the number of people because we will have fewer support staff: accountants, administrators, and the number of sectors. But we have to understand today, and I always say this, that the state is delegating more and more powers to the local level. For example, recent legislative changes mean that in the near future, it will not be the responsibility of the MCH to register people liable for military service and work with people liable for military service, but of local authorities. This will be our responsibility. This issue is already on the agenda. For example, in the near future we will open an ASC in Zavodskyi district, and it needs to be filled with people,» said Oleksandr Sienkevych.

Ultimately, reforming the management structure is not a guarantee of success in itself. The key word here is optimisation, and it should mean not just changes on paper, but real cost reduction with increased efficiency. When a city spends almost a million hryvnias a day on the maintenance of its administrative apparatus alone, every resident has the right to expect that this money brings concrete results — better services, transparent decisions, and quick and clear actions by the authorities. Optimisation should not be a way to cosmetic reforms, but to make Mykolaiv residents really feel that the quality of governance has improved, and that its costs no longer consume resources that could be used for the development of the city.

Kateryna Sereda, NikVesti