PLANNING AND LOCAL
GOVERNANCE PROJECT
(PLGP) IN ALBANIA
FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016)
OCTOBER 31, 2016 This publication was produced for review by the United States Agency for International Development. It was prepared by Tetra Tech ARD.
This publication was produced for review by the United States Agency for International Development by Tetra Tech, through USAID Contract Number AID-182-C-12-00001, Planning and Local Governance Project in Albania (PLGP). Cover photo: Publications of territorial development strategies for partner municipalities of Berat, Lushnja, Elbasan, Kuçova, and Fier.
This report was prepared by: Tetra Tech 159 Bank Street, Suite 300 Burlington, Vermont 05401 USA Telephone: (802) 495-0282 Fax: (802) 658-4247 E-Mail: [email protected]
Tetra Tech Contact: Adrienne Raphael, Project Manager [email protected]
PLGP Address: Planning and Local Governance Project in Albania Rr. Dervish Hima, 3 Kullat prapa Stadiumit “Qemal Stafa”, Kulla Nr. 1, Apt. 91, Kati 10 Tirana, Albania Tel: + 355-04-450-4150 Fax: + 355-04-450-4149 www.plgp.al PLANNING AND LOCAL GOVERNANCE PROJECT (PLGP) IN ALBANIA FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016)
OCTOBER 31, 2016
DISCLAIMER
The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. TABLE OF CONTENTS
ACRONYMS AND ABBREVIATIONS ...... II 1.0 EXECUTIVE SUMMARY ...... 1 1.1 STRUCTURE OF THE ANNUAL REPORT ...... 2 1.2 KEY ACHIEVEMENTS ...... 2 2.0 PROJECT OVERVIEW ...... 6 2.1 COMPONENT I – DECENTRALIZATION ...... 7 2.1.1 Key Achievements for Year Five...... 7 2.1.2 Current Status of Affairs ...... 8 2.1.3 Deviations from the Year Five Work Plan ...... 12 2.1.4 Challenges and Opportunities ...... 12 2.2 COMPONENT II – LOCAL GOVERNANCE ...... 13 2.2.1 Key Achievements for Year Five...... 13 2.2.2 Current Status of Affairs ...... 15 2.2.3 Deviations from the Year Five Work Plan ...... 24 2.2.4 Challenges and Opportunities ...... 25 2.3 COMPONENT III – UTILITY MANAGEMENT ...... 27 2.3.1 Key Achievements for Year Five...... 27 2.3.2 Current Status of Affairs ...... 27 2.3.3 Deviations from Year Five Work Plan ...... 29 2.3.4 Challenges and Opportunities ...... 30 2.4 COMPONENT IV – URBAN PLANNING ...... 30 2.4.1 Key Achievements for Year Five...... 30 2.4.2 Current Status of Affairs ...... 31 2.4.3 Deviations from Year Five Work Plan ...... 34 2.4.4 Challenges and Opportunities ...... 35 3.0 PERFORMANCE MANAGEMENT AND MONITORING ...... 37 4.0 BUDGET EXECUTION ...... 39 5.0 ADMINISTRATION AND PROJECT MANAGEMENT ...... 40
ANNEXES Annex I Year Four Milestones and Indicators Annex II List of Counterparts and Beneficiaries Annex III List of Reports, Assessments, and Other Relevant Documents Annex IV Snapshots Produced by PLGP in Year Five
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) i ACRONYMS AND ABBREVIATIONS
AIS Albanian Institute of Science AITR Agency for the Implementation of the Territorial Reform AGFIS Albanian Government Financial Information System BAWIS Billing and Accounting Water Information System CAP Citizens Advisory Panel CBS Community-Based Scorecards CEP Centre for European Perspective CoE Council of Europe COM Council of Ministers COP Chief of Party COR Contracting Officer’s Representative CSS Citizen Satisfaction Survey DCM Decision of the Council of Ministers dldp Decentralization and Local Development Programme DO Development Objective EU European Union FAIS Finance Administration Information System GIS Geographic Information System GoA Government of Albania GLTP General Local Territorial Plan GNTP General National Territorial Plan ICT Information and Communications Technology IDM Institute for Democracy and Mediation IP3 Institute for Public and Private Policies IPA Instrument for Pre-Accession Assistance
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) ii IPRO Immovable Property Registration Office IPT Immovable Property Tax IT Information Technology LGU Local Government Unit M&E Monitoring and Evaluation MoF Ministry of Finance MoSLI Minister of State for Local Issues MOU Memorandum of Understanding MUD Ministry of Urban Development NAIS National Agency for Information Society NALAS Network of Associations of Local Authorities in South-East Europe NCSDLG National Crosscutting Strategy for Decentralization and Local Governance NGO Non-Governmental Organization NRC National Registration Centre NTPA National Territorial Planning Agency OSCE Organization for Security and Co-operation in Europe OSR Own-Source Revenues OSS One-Stop Shop PCA Peace Corps/Albania PCVs Peace Corps Volunteers PLGP Planning and Local Governance Project PMP Performance Monitoring Plan PPP Public-Private Partnership RDA Regional Development Agency RDF Regional Development Fund SDC Swiss Agency for Development and Cooperation SEA Strategic Environmental Assessment SEE South East Europe STAR Support to Territorial Administrative Reform STTA Short-Term Technical Assistance TAIS Local Tax Administration Information System
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) iii TAR Territorial Administrative Reform TDR Transfer of Development Rights USAID United States Agency for International Development WB World Bank WU Water Utility
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) iv 1.0 EXECUTIVE SUMMARY
This is the Annual Progress Report for Year Five of USAID’s Planning and Local Governance Project (PLGP) in Albania, covering the period of October 1, 2015, to September 30, 2016. Implemented under the leadership of Tetra Tech ARD, PLGP provides technical assistance and training to the Government of Albania (GoA) and Albanian local government institutions to help the GoA and local governments successfully implement decentralization legislation, policies, and reforms. USAID PLGP (Contract No. AID-182-C-12-00001) is funded by the United States Agency for International Development. The period of performance for the PLGP project initially ran from January 3, 2012, to January 2, 2017, and was extended by six months to July 2, 2017. On October 1, 2015, PLGP initiated its fifth year of implementation. PLGP is providing assistance in the following four areas: Component I: Support the GoA’s work to implement effective government decentralization policies and legislation Component II: Improve the efficiency, transparency, and accountability of local government operations Component III: Improve local government management and oversight of selected public utilities to provide services in accordance with European Union (EU) standards Component IV: Strengthen the capabilities of the GoA and local governments to plan and manage urban and regional growth PLGP is designed to contribute to USAID/Albania’s Development Objective #1 (DO#1), Strengthened rule of law and improved governance, as elaborated in the Albania Country Development Cooperation Strategy: 2011–2015. DO#1 supports the strengthening of democratic institutions in the country by improving the judiciary and governance of health care, deepening the decentralization process, and rooting out corruption, with the goal of advancing democracy in the country while meeting key criteria for Albania’s accession to the EU. During Year One, PLGP selected and signed Memoranda of Understanding (MOUs) with 15 partner local government units (LGUs): the Municipalities of Tirana, Kamza, Vora, Berat, Kuçova, Fier, Lushnja, Patos, Durres, Vlora, Saranda, Elbasan, and Korça; and the Communes of Paskuqan and Kashar. The Project has also provided assistance to water/wastewater utilities serving the above-mentioned communities. The project has cooperated with and assisted the National Territorial Planning Agency (NTPA), with which a MoU was signed during Year One of the project. Since Year Three, at the request of the GoA to USAID, PLGP also provided significant support and technical assistance to the newly created Ministry of Urban Development (MUD) and to the Minister of State for Local Issues (MoSLI). Since the design and launch of PLGP, the local governance-enabling environment has changed dramatically. In July 2014, Albania’s Parliament approved the law “On the administrative and territorial division of local government units in the Republic of Albania.” With the enactment of this Territorial Administrative Reform (TAR), the number of local governments in Albania was reduced from 373 to 61. It is generally agreed that 2015 saw the greatest change to Albania’s system of local government since the democratic transition of 1992.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 1 In response to this rapidly changing environment, USAID requested that Tetra Tech ARD submit a proposal that would increase the funding of and extend the period of performance for PLGP. On January 26, 2015, a PLGP contract modification was executed. PLGP, as a result of the contract modification, has expanded and intensified the assistance required by both central and local governments to effectively implement territorial reform. At the national level, PLGP has intensified the assistance required to prepare decentralization reforms, including a new Organic Law on Local Governance, a Law on Local Government Finance, and revisions to the key formula for inter-governmental transfers. At the local level, additional assistance is being extended to six newly designated “model municipalities,” and PLGP has supported five partner local governments in preparing general local territorial plans (GLTPs, a precondition to the issuance of local development permits). PLGP has worked closely and cooperatively with the Ministry of Urban Development and Tourism (now called the Ministry of Urban Development as a result of a recent restructuring) and the MoSLI since their creation in 2013. The modified contract enables PLGP to offer even greater support to these institutions in fulfilling their mandates and advancing decentralization reforms.
1.1 STRUCTURE OF THE ANNUAL REPORT This annual report is structured to respond to the USAID-PLGP contract requirements. Section 1 provides an executive summary, including the project’s overall goal and goals for each of the four project components, followed by a number of key PLGP highlights. Section 2 provides a project overview by component, including subsections on key achievements for Year Five; the Current Status of Affairs, which details Year Five activities; Deviations from the Year Five Work Plan; and Challenges and Opportunities. The section on Deviations from the Year Five Work Plan incorporates four types of activities: activities that exceeded our Year Five PMP targets; activities that were not included in the Year Five work plan but that actually took place in Year Five; activities that were partly conducted; and activities that did not occur. Section 3 of the report describes the monitoring and evaluation status for each of the project milestones and indicators, followed by a detailed budget execution table in Section 4. Section 5 illustrates the technical and administrative management structure of the project. This Annual Report also includes four annexes: Annex I presents Year Five milestones and indicators; Annex II offers a table with the project’s main counterparts and beneficiaries; Annex II includes a list of the most relevant reports, assessments, and other relevant documents produced by PLGP throughout Year Five; and Annex IV includes 12 snapshots produced by PLGP in Year Five.
1.2 KEY ACHIEVEMENTS Year Five saw a surge in PLGP activities, as many of our efforts in earlier years began to come to fruition. Further, we expanded and intensified our assistance at both the national and local levels to support effective implementation of the 2015 territorial reform. In addition to the key achievements found in Section 2, PLGP’s key achievements for Year Five include: Successful Completion of All PLGP Project Milestones – With the completion of Year Five activities, PLGP has now successfully completed all PLGP Project Milestones. Year Five saw significant progress in reaching and exceeding the annual targets in response to expanded and intensified assistance required by both central and local governments to effectively implement TAR.
MILESTONE TARGET ACTUAL Procedures and criteria for distribution of unconditional grants Submitted to GoA September 2015 officially submitted for approval in September 2015 Citizens Advisory Panel (CAP) concept endorsed in each partner Completed in April November 2013 municipality and established by MOU 2013
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 2 MILESTONE TARGET ACTUAL Conceptual framework for the General National Territorial Plan Completed in April (GNTP) drafted with USG assistance and submitted to the GoA for December 2013 2013 approval. The National Crosscutting Strategy for Decentralization and Local Completed in July Governance (NCSDLG) 2015–2020 is drafted and officially September 2015 2015 submitted for approval Territorial Strategies (TS) for 5 model municipalities are drafted and Completed in March April 2016 submitted to the municipal councils for approval 2016 A toolkit for territory planning and development drafted, approved, Completed in and disseminated to national and local territory planning and November 2015 November 2015 development institutions Advanced Decentralization in Albania – Our PLGP efforts achieved several major milestones in furthering the process of decentralization in Albania. PLGP—as a lead provider of technical assistance to the Minister of State for Local Issues, Ministry of Finance, and Ministry of Urban Development—prepared 12 laws/amendments/GoA decisions that promote major decentralization policies and legislation. For example, we made substantive contributions to Albania’s new Law on Local Self-Governance (Organic Law), which governs the roles and responsibilities of Local Government Units. The Organic Law was approved by Parliament in December 2015 and is a significant contribution to the process of decentralization in Albania. Progressed in Advancing Fiscal Decentralization – PLGP believes that decentralization in Albania cannot be successfully achieved without an accompanying decentralization of fiscal allocations. Local governments are increasingly empowered to carry out decentralized functions, but they cannot do so effectively without adequate financial resources and the authority to spend those resources as they deem fit. Here too, PLGP has made substantive contributions to fiscal decentralization efforts, both by helping to craft legislation and by providing timely, accurate financial information to support evidence-based decision making. Significant progress in Year Five includes:
developing a new Unconditional Grant allocation formula to ensure a more equitable and transparent Cover page of Albania’s Official Journal apportionment of funds from the GoA to LGUs (the incorporating the Law on Local Self- Governance Unconditional Grant is LGU’s main source of revenue) and providing lead assistance to the GoA in drafting Albania’s first-ever comprehensive Local Government Finance Law (LGFL), which is intended to provide a more logical and efficient framework for local taxing powers, intergovernmental transfers, local borrowing, public finance management, and intergovernmental dialogue. In both cases, our contributions were preceded by evidence-driven analyses and policy papers that promoted dialogue—and ultimate consensus— among stakeholders. Both initiatives required months of intensive effort; in October 2015, the GoA adopted the new Unconditional Grant formula for use in its 2016 budget, and the LGFL is expected to be approved by the GoA by the end of 2016 and then presented to Parliament for consideration and final approval. Promoted Evidence-based Policymaking and Consultation – As noted above, PLGP’s work with the GoA promoted an evidence-based approach to decision making; we also encouraged open and inclusive consultation between the two levels of government. Our efforts in this area include the following achievements: an informative report on the 2016 fiscal package and annual budget, which was discussed in a jointly sponsored (PLGP, MoF and MoSLI) workshop on local finance; and several policy papers and statistical briefs, including the analyses and recommendations on the Unconditional Grant, the LGFL, and local borrowing.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 3 Successfully Built Local Government Capacities – As a result of the Year Four contract modification, PLGP was able to intensify its capacity-building assistance to partner municipalities in Year Five as they confronted the “[Territorial reform is] the only way to make possible additional challenges associated with Albania’s economic and social reform for citizens and must be Territorial Administrative Reform (TAR). Our accompanied by human and financial resources.” assistance to partner municipalities focused on - Mr. Edi Rama, Prime Minister of Albania building and refining capacities in the following areas: fiscal package and budget preparation; property tax administration and collection (including the launching of tax awareness campaigns); and the use of information and communications technology (ICT) tools to improve customer service, utilize e-governance, and reduce corruption and error. These efforts have resulted in many positive outcomes, the most significant of which is an increase in own-source revenues for many of our partner municipalities. Improved LGU operations through increased ICT support – In Year Five, many of our partner municipalities saw improved operations as a result of our assistance in implementing ICT tools. Significant accomplishments include: creation and implementation of a One-Stop Shop in Korça (with multiple sites to serve both urban Korça and its outlying Administrative Units) for efficient delivery of administrative services, and a Web-based GIS platform in Korça, Elbasan, Lushnja, Fier, and Kamza that will help these municipalities build the territorial registers needed for effective property tax administration. A resident of Korça at the One- Built More Effective and Sustainable Civic Engagement - Stop Shop established with The institutionalization, influence, and respect for Citizen USAID support Advisory Panels (CAPs) continued to grow over the past year as CAP representatives increased their involvement in local municipal activities and were invited to many national-level assemblies, including meetings and roundtables organized by the GoA and by respected donor organizations. In PLGP’s model municipalities (Korça, Berat, Lushnja, Kamza, Fier, Kuçova, and Elbasan), the CAPs increased their participation and influence through the use of Community-Based Scorecards (CBSs), an initiative implemented jointly with United Nations Women. The CBS initiative has allowed these CAPs to understand the perceptions and needs of citizens in both their urban and rural areas and to bring together citizens and local authorities in constructive dialogue, thereby demonstrating the power of civic engagement as a tool of accountability and democracy. Provided In-depth Assistance in implementing Water Sector Reforms – At the request of the Ministry of Transport and Infrastructure (MTI), PLGP’s Water Team provided significant assistance to partner municipalities as they worked to respond to the TAR and recent TAR-related Water Sector Reforms. Our efforts included development of a comprehensive guide to understanding the reforms; consultations with each municipality regarding formulation of its mandated legal, administrative, procedural, and operational Transition Plan; and four regional interactive Territorial development strategies roundtables (Lezha, Vlora, Tirana, and Pogradec), where we prepared by PLGP in cooperation disseminated reform-related information and surveyed with partner LGUs participants about concerns and issues related to water supply and sewerage.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 4 Developed and Finalized General Local Territorial Plans – PLGP supported five model municipalities (Elbasan, Berat, Kuçova, Fier, and Lushnja) in drafting their legally mandated General Local Territory Plans. This intensive, extended assistance included up to seven rounds of participatory public consultations and expert sessions and ultimately resulted in significant outcomes for each LGU: a GIS-based territorial database, a Strategic Environmental Assessment and, most important, a finalized GLTP.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 5 2.0 PROJECT OVERVIEW
2015 and 2016 were pivotal years for local governments in Albania, with unprecedented opportunities— and challenges—to advancing decentralization and strengthening local governance. In the time since the PLGP was launched in January 2012, USAID has been working diligently to help the GoA and LGUs successfully implement decentralization legislation, policies, and reforms. Many of PLGP’s recommendations set forth in the October 2012 White Paper on Fiscal Decentralization continue to be part of the GoA program for local governance. At the national level, the GoA has not had a strategy to guide the strengthening of local governance since 1999. Now, the GoA, with PLGP support, has a new National Strategy for Decentralization and Local Governance for 2015–2020 that will serve as a roadmap for decentralization. Also, at the national level, PLGP has supported efforts to draft a new Law on Organization and Functioning of Local Governments (Organic Law), which will both confirm the authority of the 61 newly created LGUs in Albania and entrust these municipalities with the responsibility and the resources to better serve their citizens. Territorial and Administrative Reform (TAR) has reduced Albania’s local governments from 373 to 61 and, as a result, each of the remaining LGUs has grown significantly in geographic size, population, and operational complexity. To support LGUs during this all-important and challenging time of transition, PLGP intensified assistance offered to both the GoA and local governments in Year Five as we worked together to improve the quality of lives in communities across Albania. Further, we understand that for territorial reform to be effective, it must be accompanied by other decentralization reforms, particularly within the realm of fiscal decentralization. Ensuring the stability and predictability of the intergovernmental financial system is essential to strengthening the legal framework and improving the functioning of both the central and local governments. PLGP recommendations for reforming the Unconditional Grant Formula helped in achieving this goal. Nevertheless, the most important challenge facing Albanian authorities, particularly in the aftermath of the decentralization reforms, is the development of a first-ever comprehensive Local Government Finance Law (LGFL). This law should provide a more logical and consistent legal framework, clarify fiscal and financial authorities and the revenue-raising capacities of local governments, improve and stabilize the intergovernmental transfer system, strengthen local public finance management, and enhance intergovernmental dialogue and consultation. PLGP is pleased to report that significant progress has been made over the past six months in preparing a draft law and continuing to raise awareness at the central level of the historical underfunding of local government and the need to provide municipalities with both the resources and the authority to improve service delivery and fulfill their newly entrusted responsibilities. PLGP appreciates the challenges faced by the Ministry of Finance (MoF) in balancing the GoA budget in this time of Europe-wide economic stagnation. Nevertheless, given the growing understanding of the importance of fiscal decentralization, we have worked and will continue to work with the GoA to see that adequate financial resources flow to underfunded local governments. PLGP understands that the challenges of effectively implementing democratic decentralized local governance are daunting. We also know that progress is being made in advancing the long-stalled decentralization process. PLGP notes that certain activities envisioned in the Year Five Work Plan have been delayed as a result of decisions and actions (or inactions) of the Government of Albania. In part, these delays can be attributed to the June 2015 local actions and to the restructuring and consolidation of local governments following the local elections. Other activities have been delayed and deferred to Year Six because of overly ambitious assumptions concerning the advancement of national-level decentralization reforms. While these decisions and delays are both understandable and manageable, they did affect the achievement of
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 6 some results envisioned in the Year Five Work Plan. PLGP remains committed to implementing any delayed Year Five activities and have built them into the approved Year Six Work Plan. Year Five saw significant progress in accomplishing all PLGP Milestones and in reaching and exceeding the annual targets in response to expanded and intensified assistance required by both central and local governments to effectively implement TAR. Below is an overview of the project by component area, including key achievements in Year Five, the current status of affairs, an explanation on deviations in implementation of the Year Five work plan, and challenges and opportunities.
2.1 COMPONENT I – DECENTRALIZATION Objective: Support the GoA’s work to implement effective government decentralization policies and legislation.
2.1.1 KEY ACHIEVEMENTS FOR YEAR FIVE Advanced Decentralization Process in Albania – PLGP’s Component I efforts were highlighted by the achievement of major milestones in drafting and implementing major decentralization policies and legislation. PLGP was a lead provider of technical assistance to the Minister of State for Local Issues in drafting and finalizing a new Law on Local Self-Governance (Organic Law), which was approved by Parliament in December 2015. The Organic Law is a major advancement in the effective implementation of Territorial and Administrative Reform. Supported Local Governance by Advancing Fiscal Decentralization – In Year Five, PLGP, in collaboration with national and local stakeholders, made significant progress in advancing fiscal decentralization, a vital component in achieving overall administrative decentralization. Specifically, we developed a new formula for the allocation of Unconditional Grants to LGUs and are now in the process of crafting Albania’s first-ever comprehensive Local Government Finances Law (LGFL). The new formula, which allocates national-level financial resources to municipalities in a more fair and equitable manner, was enacted as a component of the 2016 annual budget law. PLGP has been the lead provider of technical assistance to the MoF in developing the LGFL, which is expected to: provide more consistency in local revenue-raising powers, stabilize the intergovernmental transfer system, enable local borrowing, improve budgeting and public finance management at the local level, and improve intergovernmental dialogue and consultation. The draft law was finalized and will be presented to stakeholders for consultation in “I appreciate PLGP’s policy paper with key October and November 2016, with approval slated recommendations for the Law on Local Government for December 2016. In support of these activities, Finance and urge PLGP experts to prepare a draft law. and with the aim of promoting dialogue and This law would be a major building block in the consultation, we developed two policy papers— decentralization reforms enacted by the government.” one an analysis of the current situation vis-à-vis —Mr. Erjon Luci, Deputy Minister of Finance and Unconditional Grant, and one providing a head of the LGFL Working Group rationale and recommendations for improving decentralization through the development of an LGFL. In addition, PLGP has supported the MoF in the following finance-related activities: drafting the GoA’s 2016 fiscal package and budget law and the subsequent consultations with Municipalities; providing recommendations for amendment of the Law Regulating the Management of the Budgetary System in Albania; and providing the GoA with recommendations to amend the legal framework for local borrowing so that LGUs can make effective use of their legal right to borrow.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 7 Advanced Evidence-based Policy Making and Consultation – To promote open, inclusive, and informed consultation between the national and local levels of government, PLGP has developed analyses and statistical briefs in an effort to provide a sound basis for decision-making. For example, we developed an informative report on the 2016 fiscal package and annual budget that then formed the basis for discussions at a workshop on local finance organized by PLGP with close cooperation from the MoF and MoSLI. In addition to the previously mentioned policy papers on the Unconditional Grant, the LGFL and local borrowing, we published a statistical brief that provided a detailed analysis of local government revenue raising and spending patterns for the period 2002– 2015. This analysis provided a clear picture of local government finances in Albania as well as a baseline against which the success of the territorial and administrative reform can be measured in future years. Increased Capacities of Municipal Officials – In Year Five, we drafted and distributed a comprehensive Handbook for Municipal Local Officials to guide local elected and non-elected officials in exercising their official public duties. As part of our efforts to disseminate the Handbook, we provided training on roles, responsibilities, and legalities to municipal councillors from nine partner LGUs. PLGP also drafted a Handbook for Heads of Administrative Units that can be used as a resource by non-elected local officials in the former communes now absorbed into larger LGUs. As above, the handbook was distributed via trainings attended by the chairpersons and secretaries of Municipal Councils of our partner municipalities.
2.1.2 CURRENT STATUS OF AFFAIRS Year Five activities for Component I focused on assistance to LGUs and the GoA in efforts to improve policies, legislation, and practices that strengthen local governance and advance decentralization. Activities included the following: Conducted a National Conference on Local Governance – PLGP provided significant support to the joint efforts of the UNDP, the Swiss Development Corporation’s decentralization and local development programme (dldp), the Council of Europe, and Cooperazione Italiana (Italian Cooperation) in Albania in delivering the October 2015 National Conference on Above: Prime Minister Edi Rama (third Local Governance. The GoA’s efforts were led by the from left) and U.S. Ambassador Donald donor-financed STAR Project. Conference speakers, Lu (fourth) deliver remarks at the who included the Prime Minister and the U.S. and National Local Governance Conference. Swiss Ambassadors, addressed the importance of local Below: Head of Parliamentary financial management, issues of trust and Committee for Economy and Finance communication between different levels of government, Erion Braçe discusses the importance of the need to put an end to corruption, local capacity implementing the grant formula fairly. building, quality infrastructure, and, above all, the exigencies of adequate local resources. Proposed a new Unconditional Grant formula - To help ensure that administrative decentralization is accompanied by substantive, much-needed fiscal decentralization, PLGP assisted the GoA in developing a new formula for the allocation of Unconditional
Grants to LGUs. Unconditional Grant funding continues to be the major source of finance for the vast majority of Albania’s LGUs. To facilitate consultation among stakeholders, a policy paper, “Creating an Equitable, Transparent and Predictable
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 8 Unconditional Grant Formula,” supported the new formula. The resulting formula, which distributes resources in a fairer, more-equitable, and more-transparent manner, was enacted in October 2015 as part of the 2016 annual budget law. Supported the GoA in Drafting and Holding Consultations on the 2016 fiscal package and budget law - At the request of the MoF, PLGP provided technical assistance with the drafting of the 2016 Fiscal Package and Budget Law. We offered recommendations to improve tax administration and collection, supported the MoF in applying the new PLGP-developed formula for allocating Unconditional Grants to LGUs, and rewrote the annexes of the 2016 annual budget law that provide a detailed explanation of the functioning of the new formula and local budgets in general. To support inclusive consultations on decentralization policy and to promote evidence-based dialogue between the national and local levels of
governance, we prepared an informative report that summarized the GoA’s main proposals for the 2016 The mayor of Durres, Vangjush Dako, fiscal package and budget that highlighted implications addresses concerns about the unpredictability of the unconditional for local government finance and provided simulations grant allocation. of the Unconditional Grants for 2017 and 2018. We shared this report with our partner mayors, the MoF, the MoSLI, and the Head of the Parliamentary Committee on Economy and Finance and further discussed it during an interactive workshop held in mid-December 2015 in order to help LGUs finalize their financial plans for 2016. Supported the GoA in drafting Albania’s first-ever comprehensive Local Government Finance Law - Administrative decentralization in Albania can be effective only if it is accompanied by substantive fiscal decentralization. To address systemic weaknesses in local financing, PLGP supported the GoA in drafting Albania’s first-ever comprehensive Local Government Finance Law (LGFL). We have been outspoken in calling for urgency in the development, consultation, and finalization of the LGFL because we believe it is the only way for Albania to ensure efficient and effective implementation of the TAR. To promote a data-driven, consultative process, we recommended the establishment of a Technical Working Group, composed of national- and local-level senior
policymakers and experts, to shepherd the law’s development. Lead technical assistance is provided by PLGP local tax expert Silvana Meko (left) and MoF Director of Fiscal PLGP. The working group was established by an Order Policies Department Arjana Dyrmishi of the Minister of Finance and then convened to discuss the new budget law and its develop a detailed action plan for drafting the law. To impact on local budgets. date, as per the action plan, PLGP, in close collaboration with national and local stakeholders, has: – Delivered a regional peer-learning and knowledge-sharing workshop, “Best Practices in Local Government Finance Legislation: The SEE Experience and the Challenges Facing Albania,” in which experts and policy makers from six southeast European countries shared experiences and recommendations with Albanian counterparts on best practices in local finance legislation.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 9 – Prepared a policy paper with recommendations for the LGFL, with the goal of increasing awareness and understanding among policy makers on the key issues to be addressed by the LGFL and also the preferred approaches to addressing those issues. The policy paper helped increase awareness and facilitate discussions among policy makers regarding both the need for a comprehensive LGFL and how it can most effectively support effective implementation of the TAR. – Prepared a discussion draft of the LGFL, which was shared with the MoF; we are now awaiting the results of their internal review. Both the policy paper and discussion draft were welcomed by the MoF, which circulated it to LGUs as well as a larger group of stakeholders for comment and input. PLGP will continue to support the MoF in improving the LGFL draft before it is submitted to Parliament in autumn.
– Facilitated consultations of the LGFL-discussion draft with stakeholders, including: LGUs, mayors, local governance Cover page of the policy experts/practitioners, associations of local governance in paper, including key recommendations for the Albania, and experts and representatives from the International development of the Law on Monetary Fund, World Bank, the European Commission, and Local Government Finances the Council of Europe. Currently, the LGFL is being discussed internally within the MoF to finalize the policies proposed in the draft. We expect that the draft will be circulated officially to line ministries within the coming weeks. PLGP will support the MoF and the two Local Government Associations in organizing six regional roundtables to discuss and gather feedback on the draft from LGUs and other stakeholders. According to the MoF, the LGFL will be enacted by the GoA by the end of November 2016 and will be immediately sent to Parliament for consideration and approval. Provided recommendations for the development of the Organic Budget Law – To support Albania in developing an efficient and effective legal framework, PLGP provided the MoF with recommendations for revisions to the Organic Budget Law (OBL). As the main public-finance management law in Albania, the OBL regulates the principles, rules, and procedures for state and local budgets. Responding to the MoF’s request for support, PLGP offered recommendations specifically related to the Unconditional Grant. Our suggestions are aimed at putting an end to the long-standing downward instability in the Unconditional Grant and ensuring the equitable, proportionate, and transparent allocation of resources between the two levels of government. Created a policy paper targeted at a more efficient local borrowing process in Albania – Our “Local Borrowing Policy Paper” provides an analysis of the legal and institutional framework for local borrowing in Albania and identifies causes that limit the ability of LGUs to borrow. It presents information on the level of local borrowing and how it has evolved, the experiences of neighboring countries with regard to local borrowing, and some important conclusions and recommendations for amending the current legal framework to better harmonize the interests of the central and local governments. Updated the statistical brief on local government finances in the aftermath of the TAR – To support evidence-based policy making and consultation between the two levels of government, PLGP updated our earlier statistical brief that provides a detailed analysis on local government revenue- raising options and spending patterns for 2002–2015. The brief aims to inform policy makers and stakeholders on the financial consequences of recent decisions by the GoA to reduce local taxing
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 10 powers and the Unconditional Grant while increasing the Regional Development Fund. It also contains an updated comparison of neighboring countries in the region and provides a baseline against which the success of the territorial and administrative reform could be measured in the future. Drafted Handbooks for Municipal Local Officials and Heads of Administrative Units – PLGP drafted two handbooks to be used by local officials in executing the responsibilities of their offices. The Handbook for Municipality Local Officials is targeted to local elected and non-elected officials, who, as members of their city councils are now, by law, responsible for ratifying, regulating, and controlling all activities and decisions at the local level. The guide focuses on six major areas: an overview of the European Charter of Local Self- Government; local responsibilities and economic Cover of the handbook for local development; local asset management; territorial governance officials and heads of planning; solid waste management; and local administrative units government associations, lobbying, and advocacy. The Handbook for Heads of Administrative Units (former communes) similarly addresses these non- elected officials’ duties regarding territory control. Trained new municipal councilors and heads of Administrative Units - During Year Five, we trained 165 municipal councilors from nine partner LGUs on the use of the Handbook for Municipality Local Officials. PLGP experts served as trainers on topics ranging from PLGP Local Decentralization Expert local budgeting and optimal use of public utilities to Fatlum Nurja (standing) trains civic engagement, urban planning, and management of administrative unit heads in the water supply services. Participants commented that the Municipality of Elbasan. handbook is a robust document to guide local
government affairs, and they sent emails of appreciation to PLGP expressing their interest in more training sessions on local governance issues. We conducted a parallel training, based on the Handbook for Heads of Administrative Units, for the chairpersons and secretaries of the Municipal Councils of our partner municipalities. Supported the Albanian Local Government Associations with a Conference on Local Governance – In September 2016, PLGP collaborated with the From left: PLGP Chief of Party Kevin Albanian Association of Municipalities (AAM) and the McLaughlin, Minister of State for Local Association for Local Autonomy of Albania (ALAA) in Issues Bledi Çuçi, and USAID Albania Country Representative Catherine organizing a joint working conference on local Johnson deliver remarks at the governance, “Decentralization – One Year Later.” The 90 Conference on Local Governance. participants at the event included 33 mayors; high-level officials from the GoA and donor organizations; Catherine Johnson, Country Representative of USAID/Albania; Bledi Çuçi, Minister of State for Local Issues; and representatives from the LGU associations. The conference focused on the effects of the first year of decentralization on local
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 11 governance and allowed for a non-partisan dialogue on local governance issues of importance to mayors. Members of both LGU associations openly shared their points of view on lessons learned, opportunities, and challenges related to decentralization. In addition, international donors shared their upcoming plans and activities in response to the mayors’ needs and concerns. The conference was notable in Mayor of Patos Rajmonda Balilaj that it was the first time the AAM and ALAA held a joint (second from left) raises post-TAR event with the participation of their member LGUs. concerns on local governance at the Conference on Local Governance. 2.1.3 DEVIATIONS FROM THE YEAR FIVE WORK PLAN Additional activities conducted in Year Five: Training for Secretaries of Municipal Councils – Although not initially specified in our Year Five Work Plan, we held a training (described above) for chairpersons and secretaries of the Municipal Councils of our partner municipalities based on their request. Drafted a Handbook for the Heads of the Administrative Units – As described above, PLGP drafted a Handbook for Heads of the Administrative Units (former communes) as a resource for these local non-elected officials. Created a report on uniform financial data/indicators for LGUs – Timely, accurate, and reliable financial information is essential to the successful planning, implementation, and monitoring of fiscal decentralization reforms. To this end, PLGP is assisting the MoF in building a uniform financial data reporting system for Albania’s LGUs. PLGP has already provided the MoF with an Excel-based tool that allows the timely, accurate generation of detailed information on local government revenues and expenditures that then allows the MoF to easily analyze fiscal decentralization indicators. Currently, PLGP is finalizing a policy paper on measures to improve financial reporting at the local level; the paper will include recommendations for updating public finance management manuals and addressing discrepancies in the financial data reported by LGUs and the Treasury System. Activities partially conducted in Year Five: Grant making – PLGP had initially intended to support the GoA’s efforts to ensure that the formula for the distribution of Regional Development Funds (RDFs) is more transparent, predictable and fair. In Years Four and Five, we expressed a willingness to assist the GoA in revising the RDF criteria, and we proposed certain LGFL provisions that would address all conditional transfers to LGUs, including the RDF. However, EU institutions are currently providing the necessary assistance, and the Swiss government is supporting the drafting of a separate Law on Regional Development, which would regulate the RDF. PLGP has assisted the GoA in revising the Unconditional Grant Formula. This support is beyond the assistance initially envisioned in PLGP’s Scope of Work. Nevertheless, PLGP will continue to support the GoA by providing comments and suggestions on the separate Law on Regional Development and on how it should integrate with the LGFL.
2.1.4 CHALLENGES AND OPPORTUNITIES The implementation of the TAR and its related decentralization reforms created both challenges and opportunities for both the GoA and PLGP. The GoA’s capacity to advance decentralization reforms was strengthened with the creation of the donor-financed Support to Territorial Administrative Reform (STAR) Project and with the establishment of the Agency for the Implementation of the Territorial Reform (AITR) in January 2015. The recent launching of the STAR 2 Project will ensure continued
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 12 support to the GoA in TAR implementation. USAID/PLGP and other donors and project implementers, however, continue to face challenges in harmonizing their activities and approaches with STAR 2 and AITR. During Years Four and Five, PLGP assisted MoSLI in creating a new legal framework for local governance: the new Law on Local Self-Governance (Organic Law) adopted by Parliament in December 2015. During Year Five, a number of PLGP activities supported the GoA and local governments in implementing the Law. While a Local Government Finance Law has been in draft form since 2007–2008, it was unfortunately, never actively considered nor adopted. Now, the GoA has made decentralization a key priority and, as a result, the LGFL has been embedded in the new Decentralization Strategy, the Public Finance Management Strategy, the new Local Self-Governance Law, and the National Economic Reform Program 2015–2017. As noted, the TAR constitutes a major milestone in Albania’s efforts to improve the effectiveness and efficiency of public administration and the quality of public services. However, the TAR will fail unless the transfer of adequate resources and the empowerment to raise own-source revenues accompanies the transfer of responsibilities for the newly consolidated municipalities. PLGP continues to support the MoF in drafting the LGFL to take advantage of the political will that exists to enact this important legislation. While the drafting process is moving slowly based on delays within the MoF, we are optimistic that a law will be finalized during Year Six. In the absence of definitive action in the area of fiscal decentralization, the opportunity will be lost to improve services, maximize good governance and efficiency, and empower local governments and their citizens. The promotion of a consensus-building, non-partisan dialogue on issues of importance to local governance has been a challenge. PLGP has been able to bring together both Local Government Associations—the Albanian Association of Municipalities (AAM) and the Association for Local Autonomy of Albania (ALAA)—in organizing a joint working conference on local governance, and looks to build on the positive dynamics between the associations to partner with them on a number of roundtable events in Year Six. The Organic Law calls for the creation of a Central/Local Government Consultative Council, which unfortunately to date has a Decision of the Council of Ministers that has still yet to be approved. In the absence of a well-functioning, unified Local Government Association, the Council would serve as an important forum for long-overdue dialogue between the central government and local government. This dialogue is critical, given the envisioned reforms affecting local government finance. PLGP continues to impress upon the MoSLI to have the Decision approved and remains ready to provide technical and administrative support to the Consultative Council.
2.2 COMPONENT II – LOCAL GOVERNANCE Objective: Improve the efficiency and management of local government operations
2.2.1 KEY ACHIEVEMENTS FOR YEAR FIVE Strengthened local government capacities and improved municipal finance operations and local tax administration – PLGP provided intensive assistance to its partner municipalities in adopting and finalizing their fiscal packages and budgets for the year 2016, and on other issues related to the impact of territorial reform on municipal finances. We developed and delivered four regional workshops on improving municipal financial operations and revenue mobilization. Seven partner municipalities (Lushnja, Patos, Fier, Vlora, Berat, Kuçova and Saranda) and two non-partner municipalities (Divjaka and Roskovec) sent representatives to the workshops, which also benefited participants by promoting cross-municipal communication and cooperation, as well as between local and central government agencies. We also provided specific support to the Municipality of Tirana in
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 13 building the capacities of its newly reorganized General Tax and Tariffs Department by providing a three-module training program on local tax administration for municipal tax officials, including those from Tirana’s administrative units. Assisted LGUs in Seeking Alternative Financing Sources – PLGP continued to provide (EU) instrument for pre-accession assistance (IPA) training. In this case, we ran a set of trainings on alternative financial instruments, which provide an opportunity for LGUs to access additional financing. In cooperation with the Slovenian “The workshop has provided useful tools for our staff. Embassy and the Centre for European We learned many approaches to and tips for writing Perspective (CEP), we conducted an eight-day project proposals and are now clearer on how to training entitled, “Project Cycle Management in match our local needs with donors’ strategies for Practice: From Idea to Winning Project funding projects.” Proposal,” where representatives from partner —Ms. Mecaj, Head of Development and Projects for municipalities built their skills by developing Kuçova Municipality concrete, EU-eligible project ideas and proposals “What we learned was really helpful for our in real time. In the time since the training, Korça, municipality. The training was both specific and Kuçova, and Fier municipalities have all prepared practical.” and submitted project proposals to the EU and/or —Ms. Albana Zeqaj, Fier Municipality’s Office of other donors’ organizations. In a similar vein, we Projects conducted separate Strategic Planning Workshops in Patos and the non-partner municipality of Mallakastra in an effort to help these municipalities develop proposals for “Government-to-Government” (G2G) USG funds. We also assisted two partner municipalities (Korça and Vlora) in applying for USAID tourism grants. Completed Expanded Set of ICT Interventions – In Year Five, PLGP completed implementation of an expanded set of ICT tools designed to help our partner municipalities improve customer service, improve e-governance, and reduce errors and corruption. Specifically, we (Referring to PLGP’s ICT interventions) “When I implemented finance administration solutions in arrived as Mayor, three percent of all property taxes 11 partner municipalities, 71 Administrative were collected; in the first three months of 2016, we have collected as much as we have collected over the Units, and 3 Water Utilities. This included: past 10 years.” (The mayor reaffirmed his creating a municipal portal platform that can be commitment to partnering with PLGP on ICT used by LGUs to increase communication with, interventions and has, in fact, recently added two new and provide e-services for, the public; IT specialists to his staff to support the new TAIS/FAIS establishing a case management platform for platforms.) administering the provision of administrative —Mr. Dritan Leli, Mayor of Vlora services implemented in three model municipalities and 20 Administrative Units;
creating a web-based Geographic Information System (Web-GIS) that allows municipalities to build territorial registers in five partner municipalities and 39 Administrative Units; and designing mechanisms for inter-governmental data exchanges through the Albanian Government Interoperability Platform. As a result of these many ICT interventions, 12 of our partner municipalities (including 54 additional Administrative Units) and 10 Water Utilities are using one or more ICT tools in their daily operations. Enhanced support for Citizen Advisory Panels – Restructured Citizen Advisory Panels to incorporate new Administrative Units in all 13 partner municipalities with new members and new representation from the former Communes (now called Administrative Units). This reorganization feeds the future functioning and the sustainability of CAPs. We are seeing that CAP involvement in
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 14 local governance issues continues to expand and deepen and that many CAPs have become institutionalized as part of the governance of their communities. Part of CAP’s success is their involvement in Territorial Planning in five model municipalities serving as a vital part of the GLTP consultation process.
2.2.2 CURRENT STATUS OF AFFAIRS Year Five activities for Component II focused on providing technical assistance and on-the-job training to staff in our partner LGUs on a variety of issues including: tax collection, own-source revenues, asset management, public-private partnerships, grant writing related to EU funding, use of ICT tools, civic engagement and service provision. Activities included the following: Developed and reviewed action plans with partner LGUs – In November and December 2015, PLGP helped eight partner LGUs (Vlora, Fier, Elbasan, Saranda, Korça, Kuçova, Lushnja, and Berat) conduct strategic planning workshops in order to update their project Action Plans. During the sessions, municipal officials, CAP members, other local stakeholders, and PLGP experts discussed ongoing initiatives between PLGP and the LGU and solidified plans for near-term collaborations. Participants identified specific needs and priorities for their respective municipalities in the coming year, and PLGP experts explained the types of assistance and training available. Using the input from these participatory sessions, we revised and updated the Lushnja Municipality Chief of Staff Action Plan for each partner LGU. In each case, the Erisalda Sefa presents needs and Action Plan details specific activities to be undertaken, opportunities in an action planning roles and responsibilities, timetables, and so on. The meeting. sessions were well-attended, with approximately 160 participants in total making vital contributions. Provided training and assistance to selected partner LGUs on EU/IPA funds management and proposal writing – PLGP, in cooperation with the Slovenia- sponsored Centre for European Perspective and the Balkan Centre for Cooperation and Development, conducted a two-part eight-day training: “Project Cycle Management in Practice: From Idea to Winning Project Proposal.” The first four-day module was held in Vlora (April 5–8) and the second in Tirana (April A trainee (right) from the Municipality of 25–28). Four high-level trainers from Slovenia Fier is presented with a training delivered an interactive workshop that provided the certificate from then-USAID/Albania theoretical and practical knowledge needed to apply Country Representative Marcus for grants from the EU and other international Johnson and the Slovenian Ambassador to Albania, Mrs. Lea donors. Twenty-two representatives from PLGP Stančič, on the last day of an 8-day partner municipalities, the GoA and local NGOs training on Project Cycle Management learned how to prepare well-designed project in Practice. proposals and discussed topics such as developing assumptions and assessing risk for project ideas, writing properly constructed proposals, implementing projects once funded, and reporting and evaluating results. During the training, participants brainstormed concrete project ideas and began to develop proposals for EU funding. In
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 15 the aftermath of the training, the municipalities of Korça, Kuçova, and Fier have each prepared and submitted project proposals to the EU and other donor organizations. Supported LGUs in identifying and securing alternative financing – In response to the availability of U.S. Government “G2G” funds, PLGP worked with two municipalities to help them frame possible requests for assistance. Specifically, we conducted two participatory Strategic Planning Workshops—one in the partner municipality of Patos (December 2015) and the other in the non- partner municipality of Mallakastra (March 2016). In each case, a dozen participants—including key municipal staff, municipal council members, citizens, and CAP members—came together for a half-day of broad-based community visioning, analysis, strategizing, and planning. Of particular note was the use of a democratic voting process to identify high- Training on preparation of the local priority projects and to agree on next steps for budget and fiscal package was conducted with partner municipalities’ implementation. The workshops achieved the desired tax and finance officials in Tirana in result of priority setting while also demonstrating to December 2015. both officials and citizens the tangible benefits of dialogue, cohesion, and trust. Separately, PLGP also assisted the partner municipalities of Korça and Vlora in developing applications for USAID tourism grants. Assisted partner municipalities with the preparation of local budgets and fiscal packages – Throughout the year, PLGP’s Tax Expert once again provided extensive on-demand technical support to our partner municipalities as they worked to finalize and implement their financial plans for 2016. Because the GoA did not conduct an inclusive consultative process in the preparation of its own Fiscal Package, LGUs encountered difficulties in incorporating legally mandated changes into their local packages. While we shared our concerns about the lack of consultative process with the MoF, we continued to support our partner municipalities in better understanding the latest legal requirements and in adopting new approaches for forecasting and collecting own-source revenues. We advised the municipalities of Durres, Kamza, Saranda, Patos, and Lushnja on the implications and execution of recently enacted changes to the Law on Local Tax System. In close collaboration with the MoF and the MoSLI, we provided additional finance/budgeting assistance to LGUs by offering an interactive forum, “Local Government Finances for 2016,” in December 2015. Deputy Mayors and finance officials from 12 PLGP partner municipalities and three non-partner municipalities had the opportunity to learn about the GoA’s proposed 2016 budget and fiscal package, and to discuss the related implications for local government. The event was timed to help the LGUs finalize their financial plans for the coming fiscal year. During the forum, discussions between national and local government officials proved useful in clarifying critical issues related to local budgeting, especially with regard to local taxes and other revenues. Special attention was devoted to a discussion of new developments regarding competitive grants from the Regional Development Fund (RDF) and the establishment of four new agencies responsible for coordinating regional development. During the event, the MoF committed to holding ongoing consultations with LGUs to ensure the smooth execution of their budgets; in addition, representatives from MoSLI and the Agency for the Implementation of the Territorial Reform also confirmed their commitment to advance fiscal decentralization reforms in close consultation with local stakeholders.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 16 Provided LGUs with on-the-job training and demand-driven guidance in a variety of areas – With the project in its fifth year, and many basic systems and procedures now in place in partner municipalities, the challenges confronting partner LGUs are often quite specific. In response, PLGP tailored its support as needed to address the particular issues facing each of our partners. For example, we provided guidance and support as follows: – Provided detailed advice on financial management and local tax administration to the municipality of Lushnja – Helped Kuçova municipality resolve a tax-related conflict between the municipality and a group of small businesses. Our tax expert was able to provide important information on the legal responsibilities and tax burden of small local businesses. – Provided technical advice to the municipality of Fier about the Infrastructure Impact Tax on New Construction as it relates to an upcoming local investment project by the Albanian Operator for Power Distribution (OSHEE). Given
OSHEE’s plans to implement similar infrastructure projects Above, cover page of the in other municipalities, PLGP also shared its expertise with practical reference guide for the MoF as they drafted their 2016 fiscal package. local tax officials; below, brochures on household tax – Provided support to Fier municipality regarding staff obligations recruitment for a soon-to-be-created, capacity-building municipal department that will focus on project proposal writing and implementation. Specifically, our tax expert and program officer assisted the municipality in evaluating 10 candidates for staff positions. – Supported Elbasan municipality with several public consultation sessions on its first post-TAR budget, which was particularly difficult to develop given that 2016 was the first year the municipality had to take the needs of both urban Elbasan and its 12 new administrative units (former communes) into consideration – In conjunction with IP3, initiating work on an analytical report on Uniform Financial Indicators for LGUs. The indicators are an essential component of successful planning, implementation, and monitoring of fiscal decentralization reforms. To date, PLGP’s tax expert has identified own- source revenue-related indicators in need of standardization. Organized regional workshops on improving municipal financial operations and revenue mobilization – During the second quarter, PLGP delivered four regional capacity-building workshops on issues in property tax administration and collection for the partner municipalities of Lushnja, Patos, Fier, Vlora, Berat, Kuçova, and Saranda. Participants included employees of each municipality’s tax/finance and urban planning departments, including representatives from their outlying (mostly rural) Administrative Units as well as equivalent representatives from the neighboring non-partner municipalities of Divjaka and Roskovec. Our Tax Expert updated participants on the latest changes to property taxation law and assisted the municipalities in identifying critical issues they face in administering their property tax systems, the most important of which was establishing accurate, up-to-date territory/taxpayer registries as a vital tool for generating more own-source revenues. The workshops also promoted communications and cooperation among municipalities, as well as between local and central government agencies.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 17 During the second half of the year, PLGP provided ongoing support to the Municipality of Tirana in building the capacities of its newly re-organized General Tax and Tariffs Department. At the request of the municipality, PLGP developed and conducted a three-module cycle of capacity-building trainings on post-TAR local tax administration for municipal tax officials, including those from Tirana’s Administrative Units. A total of 98 municipal staff members participated in the six separate sessions. PLGP’s Tax Expert, supported by a local expert, updated and assisted the municipal officials in understanding recent changes to the local tax system framework, and in identifying critical issues in local tax administration, particularly property tax administration—the most important source of municipal own-revenues. Throughout the multi-part program, participants showed strong interest in the PLGP Decentralization and Local prepared material and participated actively in the Governance Expert Fatlum Nurja trains discussions. In conjunction with the program, PLGP the heads of partner LGUs’ administrative units. created a reference guide on tax collection management that will serve local officials in their daily work. In the coming months, we will disseminate copies of the guide to other PLGP partner and non-partner municipalities. Conducted capacity building with administrators of new Administrative Units – To support effective implementation of the TAR and improve public service delivery in partner LGU’s Administrative Units, PLGP piloted a capacity-building workshop in three municipalities (Elbasan, Berat, and Korça). Officials from the Administrative Units of four partner municipalities (Elbasan, Berat, Kuçova, and Korça) and one non-partner municipality (Shkodra) attended the workshops, which focused on building capacities around implementation of the new Law on Local Self-Governance, particularly in the areas of local financial management, budgeting, revenue mobilization, and identification of critical local governance issues. PLGP specifically emphasized the importance of including citizens, local communities, and civil society in municipal decision-making. A USAID/Albania Facebook Participants were highly engaged in the discussions, which served post on transparency in as a forum for identifying and addressing issues of common municipal budgeting interest and allowed the AUs to become better linked to the administration of their respective municipalities. The workshops were also noteworthy because they brought together representatives from both major political parties in a constructive, successful manner. Promoted transparency in municipal budgeting – In our work to improve local public finance management practices and promote transparency and accountability over public financial resources, PLGP, in cooperation with the Albanian Institute of Science (AIS), developed two financial monitoring tools that will help municipalities and their citizens to achieve more transparent and accountable governance through the use of open-source data. These applications, which can be used to track local expenditures and budget performance, have been implemented in six partner municipalities: Berat, Elbasan, Fier, Korça, Kuçova, and Lushnja. The implementation process included presentations and discussions of the applications with local staff and CAP members in each municipality as well as a capacity-building workshop for 16 finance and ICT experts that provided instruction on how to use such ICT tools to increase the public transparency. Organized a study tour to promote best practices in using ICT solutions for tax administration – PLGP’s Year Five work plan included a goal of encouraging partner municipalities to share best
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 18 practices and learn from each other. To that end, PLGP led a study visit to Fier Municipality so that 16 officials from three other partner municipalities (Lushnja, Vlora, and Patos) could observe the municipality’s practices related to local tax administration. Fier is a stand-out partner municipality that has made great progress in local tax/fee collection. Much of this results from their leadership in adapting and using ICT solutions to improve tax administration. Six senior managers and technical staff from Fier hosted their counterparts and shared their experiences, achievements, and challenges in various aspects of local tax administration. During the visit, much of the discussion focused on two specific topics: the efficiency and productivity gains Lushnja, Vlora, and Patos could achieve by using PLGP-provided ICT tools, and implementation issues surrounding the expanded municipal territories that have resulted from the 2015 TAR. It appears that the study visit has increased interest in using ICT tools, and it is clear that these types of study visits promote information sharing and collaboration and, more important, build technical capacities and engagement. Provided assistance to partner LGUs in consolidating, transferring, and registering municipal assets – PLGP’s support to local “In the first four months of 2016, we have been able to collect twice the amount in taxes than we collected governments included coaching nine partner over the same period in 2015. PLGP support to our municipalities (Elbasan, Fier, Berat, Kuçova, tax department has helped us guarantee our future.” Lushnja, Patos, Kamza, Vlora, and Vora) on how to make full use of the Finance Administration —Mr. Armando Subashi, mayor of Fier Information System’s (FAIS) asset management module. As with other areas of municipal administration, the TAR has affected asset management. Supported partner LGUs in maximizing use of ICT tools - Building upon our ICT interventions in Years Three and Four, PLGP helped partner LGUs make improvements in consolidating taxpayer data and extending their usage area into the administrative units. During Year Five, we completed implementation of our extended and expanded ICT Intervention Plan and, as a result, our partners’ LGUs now have the proper information systems and/or application tools in place and have been trained in their use. Our main ICT-related achievements are in the areas of: 1) improving customer service; 2) improving e-governance; and 3) reducing errors and corruption. The current ICT status of affairs for partner municipalities is as follows:
Twelve partner LGUs (Tirana, Elbasan, Fier, Berat, 16 officials from participating Kuçova, Vlora, Lushnja, Saranda, Kamza, Patos, Vora and partner LGUs take part in the Fier 1 Commune of Paskuqan ) have TAIS. Study Tour. Ten partner LGUs (Elbasan, Fier, Berat, Kuçova, Vlora, Lushnja, Kamza, Patos, Vora and Commune of Paskuqan2) have FAIS. Three partner LGU Water Utilities (Saranda, Kamza, Patos) are benefiting from the implementation of a billing and accounting water information system (BAWIS), and two partner LGUs (Vora3 and the
1 After TAR, the Commune of Paskuqan was merged with Kamza Municipality so the data for TAIS are merged with the Kamza TAIS and they use a consolidated version as Administrative Unit of Kamza
2 After TAR , the Commune of Paskuqan was merged with Kamza Municipality
3 Today Vora Water Utility has been merged with Tirana Water Utility, so Vora is no longer using BAWIS.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 19 Commune of Paskuqan4) are using BAWIS in conjunction with TAIS and FAIS. Eight water utilities (Vlora, Elbasan, Fier, Lushnja, Saranda, Kamza, Patos, and Berat-Kuçova) have a new web presence for increasing communication with the public. All partner LGUs have e-service portal platforms installed and operating, including mechanisms for data exchange with governmental systems via the linkage to the Albanian Government Interoperability Platform. Three model municipalities are using a case-management platform to support the operation of their One-Stop Shops, Training was held in Kamza which provide easy-to-access, one-stop administrative Municipality on procedures for collecting field information for services to citizens and businesses. Korça is currently fully the Territory Register. operational, while Berat and Fier are finalized but not yet fully operational pending municipalities completing their commitments. Five partner municipalities (Korça, Fier, Elbasan, Lushnja, and Kamza) have begun to use a Web-GIS platform for building their territorial registers.
All PLGP’s partner LGUs are using the Albanian Government Interoperability Infrastructure for retrieving needed data from Albania’s various central systems. Via the same platform, LGUs also have the possibility of delivering on-line services to citizens and businesses. Throughout Year Five, PLGP intensified its efforts to provide capacity-building ICT assistance to our partner municipalities. This has involved not just on-demand training and on-the-job support, but also improvements and modifications to TAIS and FAIS to accommodate changes to the 2016 fiscal package structure, increases in the number and structure of taxpayers and the incorporation of Administrative Units (former communes) into the newly consolidated municipalities. In this context, PLGP, during Year Five, implemented TAIS/FAIS in the model municipality of Fier (including its nine Administrative Units) and extended existing TAIS/FAIS systems in the 16 Administrative Units of Vlora, Saranda, Lushnja, Patos and Vora municipalities.
Additionally, we have worked with each LGU’s senior staff to develop a methodology for updating and incorporating taxpayer Cover page of a brochure registries and historical financial data. The result of all of our ICT- produced by PLGP for Korça’s one-stop-shop related efforts this year has provided substantial gains in helping partner LGUs more fully use TAIS, and as a result, position themselves for significantly increasing own- source revenues.
4 After TAR, the Commune of Paskuqan was merged with Kamza Municipality so the data for BAWIS are merged with the Kamza Water Utility BAWIS system.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 20 Our FAIS-related work has enabled finance staff in partner LGUs to begin to use the system to monitor budget implementation. Municipalities can now “Kamza municipality is grateful to our trusted produce financial status reports, including cash flows. partner, USAID, which has continuously supported In Patos, the Finance Department Director expressed our municipality. Through such support we will be satisfaction with the variety of reports generated by able to fight informality in our municipality. With 16 teams in the field, Kamza Municipality has begun the FAIS, especially when compared with previous field registration and data collection process for its reports, which required more time to compile. territory register.” We have also worked with our partner municipalities —Mr. Xhelal Mziu, mayor of Kamza on ICT-related initiatives designed to improve service delivery to citizens, make local government more accountable and responsive, and strengthen local governance. In March, we culminated months of work, performed in cooperation with the Institute for Public and Private Policies (IP3), with the launch of a One-Stop Shop Service Center (OSS) as a pilot project in Korça Municipality. Specific components of our work on the OSS include: Setting up the OSS structure within the context of existing organizational and municipal structures, identifying and inventorying the 73 administrative services to be addressed by the OSS Preparing a “Manual of Procedures” and related workflow schemes for each administrative service to be delivered by the OSS Building the ICT platform that administers OSS activities The OSS uses simplified procedures to provide citizen- centric public services that no longer require time- consuming frustrating processes. Korça OSS provides 75 services from 11 different municipal departments, including Finance; Local Taxes and Tariffs; Social Protection; Law; Territorial Planning and Development; Contract Management; Human Resources; and Public Above, CAP restructuring meeting in Relations. PLGP and the municipality combined Vlora; below, Clean-Up Day organized by computer-based technologies with human-based CAP in Kuçova administrative processes to create a new way of delivering local government services that is responsive, convenient, transparent, and cost-effective for citizens and the municipal government. More than 3,000 cases have been administrated by the system in the last six months. Our ICT-related activities also included design and implementation of a Web-based Geographical Information System (Web-GIS) platform that will facilitate property tax administration and collection for partner municipalities through the creation of a working tax register for each municipality. We worked with five partner LGUs (Korça, Elbasan, Fier, Lushnja, and Kamza) to create operational tax registers—a critical first step in generating invoices for tax collection that ultimately results in increased own-source revenues. In addition to activities with LGUs, PLGP continued to work at the central government level to create procedures and mechanisms whereby municipalities can easily access data held in national-level information systems.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 21 Restructured Citizen Advisory Panels to incorporate new Administrative Units – During Year Five, PLGP facilitated and finalized reorganization of all 13 Citizens Advisory Panels (CAPs) serving our partner municipalities. These efforts resulted in a set of reconstituted groups, each with new members and each with new representation from the former Communes (now called Administrative Units) absorbed as part of the 2015 Territorial Administrative Reform. Each of the separate restructuring meetings included presentations on: 1) the roles, responsibilities, and functioning of CAPs (so new CAP members would be PLGP Civic Engagement Expert Lori Memo discusses prioritization of issues prepared to assume their new roles); 2) methods for with officials from the Municipality of interacting with local authorities; 3) legal and civic Mallakastra. mechanisms to promote local democracy; and 4) recent changes to the Law on Local Self-Governance regarding citizen participation in municipal decision- making. During the sessions, CAP members also had the opportunity to democratically select new CAP coordinators. Several of the meetings were attended by mayors, which enabled the signing of MoUs affirming the role of CAPs in the municipality. CAP Activities and CAP Sustainability – When we worked with our partner municipalities to establish CAPs during Year Two, our ultimate goal was to create a sustainable mechanism for civic engagement. Now, in Year Five, we are seeing that CAP involvement in local governance issues continues to expand and deepen and that many CAPs have become institutionalized as part of the governance of their communities. Several examples: Members of Kuçova’s CAP were asked to participate in a public hearing for the municipality’s annual budget and fiscal package. Saranda’s CAP met with the municipality’s mayor and municipal staff in a consultative session regarding the annual budget. In Vlora, CAP members supported the municipality in organizing the participatory budgeting process. Fier’s CAP participated in an official public hearing regarding the municipality’s planned initiatives for the coming year. In collaboration with the municipality, Kuçova’s CAP organized two clean-up days involving 15 schools and dozens of citizens from the municipality’s newly enlarged territory (clean-up days are now becoming a tradition for Kuçova’s CAP and potentially a best practice to be replicated by other CAPs). A CBS poster prepared by Other more-general CAP activities in Year Five included: PLGP in cooperation with UN Women Korça’s CAP convened to discuss internal organizational issues, elect a new CAP coordinator, and agree on a revised scope of work and MoU to be signed by the Mayor. We also assisted the municipality in drafting a Citizen Satisfaction Survey that was conducted throughout Korça’s seven administrative units. In eight of our partner municipalities, CAP coordinators and members attended PLGP’s annual Action Planning Workshops, which provided the opportunity for them to proactively identify citizens’ needs and priorities regarding service delivery, accountability/transparency, and communication/interaction. In Patos, CAP members and citizens participated in a separate, specifically targeted Strategic Planning Workshop conducted by PLGP that
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 22 played a vital role in identifying near-term development projects for possible funding. All of these activities served to reinforce the role of CAPs in their communities while also strengthening communication with local officials, including mayors who participated in the sessions. Implemented Community-Based Scorecards in selected LGUs – Building on the success of the 2015 Community-Based Scorecards (CBS) initiative, PLGP continued its collaboration with United Nations (UN) Women and is now implementing CBSs in six additional municipalities: Fier, Korça, Kuçova and Lushnja (all partner municipalities) and Gjirokastra and Shkodra (non-partner municipalities). In addition, we are conducting follow-up monitoring in the partner municipalities of Berat, Elbasan, Kamza, and Vlora, where CBSs were implemented in 2015. Following technical training for the project’s network of Above: Lushnja residents review a map implementing organizations, fieldwork specialists of the Lushnje General Local Territorial from those organizations ran a total of 26 citizen focus Plan at a public hearing. Below: Residents of Elbasan discuss their groups across the urban and rural areas of the named municipality’s territorial plan. municipalities. Focus group participants—who included women, youth, CAP representatives, and members of the Roma community and other marginalized groups—were able to voice their needs and priorities and provide specific recommendations for local authorities. These identified priorities are then included in the Scorecards developed for each LGU. The next step in the CBS process—currently underway—is interviews with local officials with the goal of presenting citizens’ priorities and matching them with local programs and agendas. The CBS process will conclude in the first quarter of Year Six with public presentations of the Scorecard results to each municipality and, as a culmination, a National Conference on Civic Engagement. Involved CAPs in Territorial Planning – PLGP’s Urban Planning experts are providing intensive assistance to five model municipalities (Elbasan, Fier, Lushnja, Kuçova, and Berat) in the preparation of their General Local Territorial Plans (GLTPs). During Year Five, the CAP in each of these municipalities participated in a series of mandated GLTP-related public hearings on local land use and infrastructure. In addition, in Saranda, Vora, and Vlora, where GLTPs are under way but not with PLGP assistance, CAPs members participated in similar public hearings. And, as mentioned in the Component 4 narrative, PLGP’s civic engagement team participated in the Planning Toolkit event organized with the MUD, where we presented the CAP concept to the 250 participants in attendance, stressing that CAPs are a vital part of the GLTP consultation process. After the event, several non- partner municipalities indicated interest in establishing their own CAPs, and PLGP plans to follow up with them. Collaboration with Peace Corps – This year also saw positive outcomes from our ongoing collaboration with the Peace Corps. Throughout the year, we briefed Peace Corps Volunteers (PCVs)—both in partner and non-partner municipalities—on new developments in local governance, including the National Crosscutting Strategy for Decentralization and Local Governance, the new Organic Law, and the revised unconditional grant formula. This information has been useful to the PCVs in adding value in the municipalities to which they are assigned. PCVs attended several of our Action Planning Workshops, where they worked with local officials and citizens to establish priorities
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 23 for the coming year. A dozen PCVs attended the Planning Toolkit event. In January, in response to the Peace Corps’ request, PLGP assisted with an in-service training for PCVs working in local governance with the goal of building volunteers’ capacities to further PLGP-related goals; our experts spoke about the new Law on Local Self-Governance, territorial planning, and the creation of GLTPs. Our Civic Engagement Expert also conducted a workshop on the CAP development process, providing information on how to build civic participation and engagement. As a result, some volunteers are planning initiatives to help build civic participation in their LGUs. Most recently, PLGP met with the latest incoming group of PCVs assigned to work with municipalities or local non-governmental organizations (NGOs) in order to provide them with a better understanding of the local-governmental structure and framework within which they will work. Coordination with PCVs has also allowed PLGP to go beyond its contractual obligations and support municipalities not officially part of the project; for example, as a PLGP’s most recent result of coordination with a PCV, the mayor of Roskovec newsletter municipality requested assistance from PLGP, and members of her team now attend selected PLGP trainings provided to partner municipalities. Prepared Project Newsletter In January and September 2016, PLGP published two project newsletters and distributed them to stakeholders. As in previous years, the newsletter is designed to provide an overview of the project’s major activities, highlight achievements accomplished and PLGP publications, and preview upcoming project activities.
2.2.3 DEVIATIONS FROM THE YEAR FIVE WORK PLAN Activities partially conducted in Year Five: Generate property tax obligation bills in Tirana Municipality and expand it in the new Administrative Units - As reported earlier, PLGP could not proceed with several planned activities due to the lack of response from the Immovable Property Registration Office (IPRO) in providing data to the municipality of Tirana. It is important to note that as of June 2015, IPRO was not providing data to LGUs as required by law. After the 2015 local election (in October 2015), PLGP initiated a discussion with Tirana’s new administration in order to reactivate the process, but little progress has been made. In an effort to help Tirana Municipality improve its property tax collection in spite of the lacking IPRO data, PLGP’s Tax and ICT experts worked with the municipality to use its water utility as its property tax collection agent. Currently, we are working with Tirana city officials to implement PLGP’s Billing and Account Water Information System (BAWIS) so that it works in conjunction with the municipality’s TAIS, already installed. We expect that Tirana will soon see a notable increase in property tax revenues as a result of including property tax notices with water bills. Assisted partner LGUs in implementing identified PPP projects – PLGP had planned to support the municipalities of Elbasan, Kuçova, and Saranda in implementing already identified Public-Private Partnership (PPP) projects. For a variety of reasons, the municipalities decided not to pursue implementation of their projects. For example, the mayor of Elbasan rejected the public parking project and decided to run the municipality’s own newly established enterprise. In Kuçova, officials decided to postpone a waste management project for at least for a year. The municipality of Saranda
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 24 decided to continue its existing model for public beach management (renting beach space to existing users/companies) rather than adopt a new approach. During the year, we distributed a Call for Concept Notes for PPP projects to our model municipalities and publicized a Call for Expressions of Interest to support PLGP in the preparation of feasibility studies for PPP projects. Three municipalities presented concept ideas, and several local organizations responded to the request for support to prepare feasibility studies with five concept ideas (public lighting (Korça, Kuçova, and Elbasan), livestock market place (Korça), and public school heating (Elbasan). In Year Six, PLGP will conduct the activities needed to support LGUs through all phases of PPP—project design and implementation. Conducted Public Financial Management (PFM) Systems Assessments – PLGP is currently cooperating with the Swiss Secretariat for Economic Cooperation (SECO) to conduct five comprehensive Public Expenditure and Financial Accountability (PEFA) assessments for five municipalities. SECO will conduct assessments in Tirana, Berat, and Tropoja while PLGP will conduct the assessments in Fier and Kucova. Although this activity should have been completed in Year Five, we experienced delays because of 1) the longer-than-expected concentration of effort needed for the drafting of the LGFL and 2) the timing constraints for the PEFA Technical Secretariat (part of the World Bank). Both SECO and PLGP have conducted the preliminary work necessary for the assessments, and the fieldwork will initiate by the third week of October 2016. PLGP will finalize the assessment and the discussions with the PEFA secretariat by the end of February 2017. However, PLGP has already started work on conducting a set of smaller-scale exercises that will look at the PFM systems in eight additional partner LGUs. This exercise is expected to be completed in November 2016. We will also review the Financial Management and Control and the Internal Audit Systems of all selected Municipalities. The main benefit of a PEFA/PFM assessment is that it helps identify strengths and weaknesses in public finance management practices and procedures. Assessments are commonly used to improve both legislation and practices in managing scarce public financial resources, which would be timely in Albania because public finance management regulations constitute one of the areas that the LGFL seeks to regulate. These assessments will be the first officially conducted local-government PEFA assessments in Albania. Activities not conducted in Year Five: Citizens’ Guides to the Municipal Budget – PLGP decided to postpone the planned production of this guide until Year Six, when there is likely to be more clarity on the functional responsibilities of local governments and their financial resources. The decision to postpone the publication was reached given the particularities of Year Five—from the enactment of the TAR to the new dynamics created by the new Organic Law, and the delayed decisions of the GoA on the 2016 budget. Update the PPP manual – The PPP Manual was reviewed in light of new changes to the PPP and Concession Law. Based on an agreement with USAID, it was decided not to proceed with the update as the manual was drafted based on the specific conditions four years ago that are no longer relevant to the current situation.
2.2.4 CHALLENGES AND OPPORTUNITIES The consolidation of LGUs in Albania in 2015 (from 373 to 61) holds the promise that the delivery of basic services will improve. Yet in 2016, Albania’s newly consolidated municipalities remain hard- pressed to meet their expanded citizenry’s demands for public services. In Year Six, PLGP will continue efforts to improve LGU service delivery by building the capacities of (and increasing the resources available to) municipalities. As previously predicted, efforts to generate additional own-source revenues, particularly through property
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 25 taxes, remain hampered by the GoA’s unwillingness to share data with local governments. It is unfathomable that the IPRO, despite the legal mandate to do so, refuses to systematically share property registration data with local governments. In Year Six, steps must be taken to advance the consolidation, transfer, and registration of municipal assets. The implementation of TAR in partner municipalities will remain the fundamental challenge of PLGP throughout the remaining life of the project. Significant progress has been made in installing ICT infrastructure in PLGP partner municipalities. PLGP conducted an internal ICT assessment in July and August 2016 to “support efforts to improve the efficiency and management of local government operations by assessing the effectiveness of ICT activities and ensuring that PLGP’s subcontractor had satisfactorily complied with the requirements of the ICT subcontract and modifications.” The assessment confirmed that our subcontractor either has met or exceeded all contractual deliverables and was universally praised by all municipal counterparts. The ICT assessment provided a number of recommendations, next steps to ensure the ICT tools are used effectively, and we have included these recommendations in our Year Six activities. We have continued the extension and expansion of partner municipalities’ ICT infrastructure to the newly absorbed Administrative Units and are continuing the trainings needed to build the capacities of newly hired staff resulting from 1) the TAR and 2) the subsequent restructuring of LGUs’ tax and finance departments. The handover of ICT assets to municipalities must occur. The use of e-service platforms by beneficiaries will remain a challenge until LGUs, civil society organizations, and citizens become aware of and fluent in the use of the new systems. To address this challenge, PLGP has worked with—and will continue to work with—CAPs to promote these e-service platforms. The proper utilization of TAIS and related ICT tools has the potential to generate significant increases in own-source revenues, but realizing this potential will require both political will and a commitment by the central government to share data with municipalities. PLGP continues to pursue strategies for the development of Municipal Tax Registries and the expansion of partner municipalities’ property tax bases. Specific Property Tax Action Plans, coupled with IT support, will continue to be the focus of PLGP assistance for model municipalities. Use of water utilities as an LGU tax agent is an experience that PLGP will continue to share as a best practice with other partner governments. Work initiated in Year Five will continue with five municipalities in using GIS as a tool to support the creation of an integrated and multi-use territorial database for property taxation. PLGP has provided, and will continue to provide, on-the-job training and technical assistance to all of the newly constituted partner municipalities. Assistance was targeted to technical staff to strengthen their capacity to manage municipal finance operations, including fiscal package preparation, new techniques for own-source revenue forecasting and mobilization, financial planning, annual budget preparation and execution, financial management, and control and internal audit. The work initiated in Year Five for PFM and internal audit assessments will be performed in 11 municipalities during Year Six. In previous years, USAID supported six partner municipalities through Assist Impact to prepare feasibility studies for identified PPP projects and assist them during the contracting and implementation phases. Based on a review of the feasibility studies and reports produced by Assist Impact, as well as on the current conditions in Albania, we have identified a number of challenges to implement PPP projects on the local level. Municipalities and city councils should be a driving force of the entire PPP process starting with the identification of the potential project/services to the implementation. LGUs should participate in PPP projects as partners and take the political responsibility/cost while entering in a partnership with the private sector. The limited understanding of the concepts and legal framework of PPPs, political change in local and central level and the lack of successful implemented cases are currently serving as a barrier for the implementation of PPPs at local level. On the other hand, PPP feasibility studies can serve LGUs as a good document and/or basis for future support from potential donors, government, and potential investors, and can help them make decisions regarding benefits, costs, quality of the service, and alternative interventions.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 26 PLGP’s activities aim to promote local democracy and ensure that all citizens have a voice in local decision-making. LGUs have made progress in restructuring CAPs to include the residents of the former communes. We intend to strengthen CAPs further and to enhance the likelihood of their sustainability at the close of the project. In Year Six we will also continue our thus-far successful efforts to use CBSs as a mechanism to enhance citizen participation. Also on the docket: convening a National Conference on Civic Engagement to broadly share best practices beyond our partner LGUs.
2.3 COMPONENT III – UTILITY MANAGEMENT Objective: Improve local government management and oversight of publically owned utilities, in accordance with EU standards
2.3.1 KEY ACHIEVEMENTS FOR YEAR FIVE Transition Strategies for Water Supply and Sewerage Service delivery compiled for post-TAR (i.e., larger) municipalities of Fier, Lushnja, Elbasan, and Patos – PLGP assisted four model/partner municipalities in developing Transition Plans that will provide structured road-maps for the reorganization of the delivery of water supply and sewerage services throughout the expanded service area of each of the consolidated Municipalities. These Transition Plans were The water expertise we are receiving from PLGP on a variety of Water Sector Reform topics is one of the developed in close collaboration with working best consultations that our Municipality has ever been teams from each municipality and later approved offered in the water supply and sewerage sector.” by each Municipal Council. Further monitoring is underway by the PLGP team. —Teuta Korreshi, Deputy Mayor of Lushnja and Chair of the Working Group on the elaboration Future Water Supply and Sewage and implement Lushnja Water Transition Plans Infrastructure Developed for Model reiterated at the official presentation of Lushnja Water Transition Plan. Municipalities – PLGP worked on the status of water supply services in the municipalities of Fier, Lushnja, Berat, Kuçova, and Elbasan. Based on a thorough examination of each municipality’s current water supply and sewerage situation, we drafted recommendations regarding infrastructure needs and capital investment plans.
2.3.2 CURRENT STATUS OF AFFAIRS Component III activities in Year Five continued to be focused on improving corporate governance and utility management strategies and procedures for PLGP partner water utilities (WUs) including: Assisted the Municipalities and WUs of Elbasan, Fier, Lushnja, and Patos in developing Transition Plans for Delivery of Water Supply and Sewerage Services - PLGP assisted four model/partner municipalities with the development of Transition Plans intended to provide structured road maps for the re-organization of water supply and sewerage services in the expanded service area for each municipality. We worked with mayors and other high-level officials to mobilize special working groups in each municipality to identify, record, and assess the condition of publicly owned water supply and sewerage assets in the mostly rural Administrative Units (former communes). Prior to these working sessions, PLGP experts developed and presented guidelines for maximizing the benefits of interactions and meetings with local government and local WU officials. The guidelines addressed issues such as institutional restructuring; human resources management; technical operations; customer service management; and regulatory matters.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 27 Following the working group’s efforts, we then provided intensive assistance to each Municipality and WU in creating their “The Business Planning process was a valuable and Transition Plans, which now serve as important exercise for the staff of our utility. The process included a thorough examination of the practical guides to understanding and current conditions of our water supply and sewerage implementing water sector reforms and services, within both our existing service area and the ensuring that all legal, administrative, new communes that were recently transferred to our procedural and operational issues are Fier Municipality service area. The plan includes a considered. PLGP experts presented the detailed analysis and forecast of the capabilities, relevant Transition Plan to each municipality, dynamic forces and challenges that impact the provision of water supply and sewerage services in and its respective WU. All of these workshops our service area for the next five years saw good representation from local government officials and senior WU We welcome PLGP’s assistance – it has helped us management and many participants stated that understand both external and internal environmental the Transition Plans were vital to guiding the factors and plan for our future.” implementation of the water sector reforms. —Piro Ndreu, Director of Water Supply and Sewerage of Fier Assisted the new WUs of Fier and Lushnja with development of Five-Year Performance Improvement Action Plans for their Integrated Service Areas - The Council of Ministers Decision on the Reorganization of Water Supply and Sewerage Services required each of Albania’s WUs to develop a Five-Year Performance Improvement Action Plan that would include within it a Five-Year Business Plan addressing their expanded (i.e. post-TAR) new service areas PLGP experts assisted the municipalities of Fier and Lushnja and their respective WUs with development of these plans during the last quarter of Year Five, after their Transition Plans had been finalized. It was PLGP Water Expert Enkelejda Gjinali particularly challenging to develop the Current (standing) presents the Transition Plan to Condition Assessments for the municipalities Fier municipal and water utility officials. because we were faced with a lack of information for the former “un-covered/white area Communes” that were absorbed as a result of the TAR. The Business Plans and associated Workbooks we created are now essential management tools the WUs can use to achieve financial sustainability. Assisted with the Preparation of GLTPs for Five Model Municipalities – In support of PLGP’s efforts drafting General Local Territory Plans (GLTPs) for five of our model municipalities, our Water Experts developed detailed reports on the provision of water supply services for the municipalities of Fier, Lushnja, Berat, Kuçova and Elbasan. Each report contained a thorough examination of current water supply and sewerage infrastructure and recommended adaptations and improvements. Assisted the GoA in the Implementation of Water Sector Reforms – PLGP’s Water Experts assisted the GoA in developing a set of comprehensive guidelines to assist municipalities and WUs throughout Albania in understanding recent Water Sector Reforms. The Guidelines provide practical advice on the legal, administrative, procedural and operational considerations all 61 municipalities should address when formulating their WU Transition Plans. To further support water sector reform efforts, we held four regional roundtables (Lezha, Vlora, Tirana and Pogradec) to disseminate the
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 28 Guidelines and also used the sessions to survey participants about key concerns and issues related to water supply and sewerage. The surveys revealed that municipalities and WUs are facing challenges in the areas of institutional and territorial fragmentation and badly managed multi-level governance; limited capacities at the local level; unclear roles and responsibilities; and questionable resource allocation. Monitored Transition Plans Implementation for Fier and Lushnja Municipalities – PLGP assisted the municipalities of Fier and Lushnja with implementation of their approved WU Transition Plans, by helping them develop their new Water Supply and Sewerage Statutes, which are used to specify the new governance structure (including duties and responsibilities) of each municipality’s WU. In the coming year, these Statutes will serve as the basis for updating the Administrative Board (Supervisory Council) Training Manual and also for training our partner and model Municipalities on providing oversight to their new WUs. Supported Water Supply and Sewerage Companies in the use of ICT Tools – PLGP Water Experts worked closely with our ICT team and representatives of the public relations units of the Fier, Berat-Kuçova, Lushnja, Elbasan, Saranda and Vlora WUs to develop the materials needed to position their websites as a tool for public communication and interaction. We also assisted the LGUs/WUs of Kamza, Saranda, and Patos with the operation of their database management systems. Developed Operations and Maintenance Program for Elbasan Water Utility – PLGP created an Operations and Maintenance Manual and a related full-day training for the management and engineering staff of Elbasan’s WU. Both the manual and the training focused on emergency, corrective and preventive maintenance.
2.3.3 DEVIATIONS FROM YEAR FIVE WORK PLAN Additional activities conducted in Year Five: Assisted the GoA in the Implementation of Water Sector Reforms – Although not envisioned in the Year Five Work Plan, PLGP’s Water Experts assisted the GoA in developing guidelines to assist municipalities and WUs in understanding the Water Sector Reforms. In addition, we held four regional roundtables (Lezha, Vlora, Tirana, and Pogradec) to disseminate the Guidelines and used the sessions A regional workshop on water sector reforms to survey participants about key concerns and was organized by PLGP in cooperation with issues related to water supply and sewerage (as the Ministry of Transport and Infrastructure described in the above section 2.3.2). in the Municipality of Lezha. Activities not conducted in Year Five: Development of a Transition Plan/Performance Improvement Action Plan for the WU of Berat/Kuçova – Near the end of Year Five, after extensive efforts and intensive internal discussions, PLGP decided to suspend and re-orient the assistance for the development of a Transition Plan/Performance Improvement Action Plan for the WU of Berat/Kuçova. The decision was a response to Berat and Kuçova’s decision to “disaggregate” their current water supply and sewerage company. After the 2015 local elections, Kuçova began complaining about the limited availability of water, and indicated its interest in disaggregating from Berat. PLGP conducted a study that demonstrated the financial impact the disaggregation, which would result in a burdensome debt repayment situation for Kuçova. Once presented with this information, the municipality decided not
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 29 to disaggregate, yet sent a formal letter to the contrary to General Directorate of Water Supply and Sewerage under the Ministry of Transport and Infrastructure. During this time, we met several times with both municipalities and, although Berat kept stating that it wanted to remain aggregated, their final decision was to become a stand-alone WU by the end of 2016. Training for the New WU Administrative Board members – We have decided to postpone trainings for new members of WU Administrative Boards (former Supervisory Councils) until Year Six because most of these Boards have not yet been officially institutionalized.
2.3.4 CHALLENGES AND OPPORTUNITIES Territorial Administrative Reform and the recently enacted guidelines on Water Sector Reform provide unprecedented clarity on the roles and responsibilities of LGUs and WUs regarding the delivery of water and wastewater services. The TAR is expected to lead to enhanced good governance transparency and accountability at the local and regional level; efficient service delivery and effective collection of tariffs and fees by local governments; and greater ability to promote and encourage sustainable local economic development. The TAR is also expected to further democratize and strengthen the governance in the territory and encourage economic efficiency through the creation of space for integrated planning in a more consolidated administrative area. Yet, local governments, as the owners of the existing water supply and sewerage companies and infrastructure within their administrative boundaries face challenges in delivering services to their expanded territories. Specific decisions and actions include: developing/ implementing transition plans with clear performance improvement programs, staff restructuring strategies, and tariff harmonization policies for their expanded territories; preparing Five Year Business Plans and Performance Improvement Action Plans with specific integrated targets that will serve as the basis for negotiations between the GoA and each LGU; institutional restructuring of the new PLGP Urban Planning expert Zenel Bajrami WUs to improve governance and presents the Strategic Environmental Assessment oversight, with clear roles and to community members in Kuçova. responsibilities assigned to mayors, municipal council, administrative boards, and WU administrators; and securing licenses for WUs based on expanded service areas, and preparing new tariff adjustment and unification plans.
2.4 COMPONENT IV – URBAN PLANNING Objective: Strengthen the capabilities of the GoA and local governments to plan and manage urban and regional growth
2.4.1 KEY ACHIEVEMENTS FOR YEAR FIVE Drafted General Local Territorial Plans. PLGP’s Urban Planning Experts worked in partnership with the mayors and the urban planning staff of five model municipalities (Elbasan, Kuçova, Berat, Lushnja, and Fier) to draft General Local Territorial Plans (GLTPs) in accordance with Albania’s new
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 30 planning legislation. We supported these municipalities in establishing their territorial databases, conducting territorial and environmental inventories, drafting and approving territorial strategies and creating territorial plans, strategic environmental assessments, and capital investment plans. The respective Municipal Councils of each LGU have approved the resulting territorial strategies and now each municipality is prepared to move ahead in seeking GoA approval of their GLTP. Solidified Territorial Planning Framework – In cooperation with MUD and NTPA, we created and disseminated a comprehensive Territory Planning and Development Toolkit for professionals and local governments; prepared a study on land development typologies in Albania; achieved approval of the bylaw (DCM) no 1096, date “This [Territorial Planning] toolkit is the Bible of 28.12.2015, “On the approval of rules, conditions and the local government units in the area of procedures for the use and management of public territorial planning and development. It should be space” and drafted a policy paper on Financial used on daily basis.” Instruments for Land Development in Albania. The —Minister of Urban Development Eglantina toolkit, as well as the findings of the land Gjermeni typologies study, were disseminated through a national event that took place in November 2015, with the participation of approximately 250 mayors, municipal and national government officials , representatives of civic groups and international donors, Peace Corps Volunteers, and other local stakeholders. The policy paper offers insights on six land development instruments that municipalities can use, in conjunction with public-private partnerships, to foster land development and ensure public space. Increased Capacities of National Planning Institutions vis-à-vis Land Development – In conjunction with the policy paper on land development instruments, PLGP experts provided training and coaching to MUD and NTPA staff on how to make proper use of these instruments. Our Urban Planning Experts provided in-class training, which was then followed up with a set of cases and exercises for participants. At the request of the MUD, we worked with the Municipality of Korça to conduct a pilot study of Transferable Development Rights. The test case did not result in a feasible project, but the findings were disseminated to national and local planning officials as an informative example.
2.4.2 CURRENT STATUS OF AFFAIRS The Component IV team works at the national level with two institutions that are closely related: the Ministry of Urban Development (MUD) and the National Territory Planning Agency (NTPA). At the local level, PLGP has provided planning assistance to five partner municipalities (Berat, Kuçova, Lushnja, Fier, and Elbasan) that were selected as model municipalities for PLGP’s urban planning efforts. In Year Five, we significantly intensified our assistance to local institutions and were engaged in the following activities: Supported national planning institutions to improve capacities - PLGP supported the MUD in drafting legal and policy documents as well as with fundraising for local planning efforts. Specifically: – Assisted MUD with fundraising – On April 12, the MUD, in partnership with USAID, hosted a donors’ meeting to identify possible resources to assist municipalities with the drafting of their GLTPs. Thus far, 30 of Albania’s 61 municipalities are not yet involved in the GLTP process. The session made a case for technical and financial support and emphasized that GLTPs are a relatively low-cost, but high-impact investment in the future economic growth and social and spatial transformation of Albania. Several participating donors showed interest in supporting
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 31 GLTP development, and the Swiss Development Cooperation announced that they would soon provide financial support to two or three local governments in preparing their GLTPs. – Provided technical support to the NTPA and MUD in creating legal framework for regulations governing the creation and management of public spaces, both of which play a crucial role in shaping the form of a municipality and determining its quality of life. The regulations were reviewed by various ministries and subsequently approved by the Council of Ministers in December 2015. – Published a policy paper on Financial Instruments for Land Development in Albania – The paper, prepared at the request of the MUD, offers guidance Minister of Urban Development Eglantina Gjerrmeni greets attendees at to local governments for using “value capture” the Territorial Planning Toolkit launch public financing mechanisms to fund local event. infrastructure, manage urban growth, and create public-private partnerships – all three of which are long-standing priorities of USAID. The paper outlines practical options for implementing six financial instruments that may be relevant to Albania: Transfer of Development Rights, Conditioned Building Intensity, Tax Increment Financing, Business Improvement Districts, Betterment Fees, and Special Assessment Districts. The paper details the key action steps for developing, instituting, and monitoring each
financial instrument and provides other recommendations for successful implementation. The paper also examines Albania’s existing Infrastructure Impact Tax on New Construction in the context of international best practices and the Albanian experience, and proposes a model for optimizing local revenues for local infrastructure development. – Conducted a training session on financial instruments and participatory planning for representatives of the MUD, MoF, NTPA, and the Immovable Property Registration Office. The workshops covered practical considerations in the implementation of Transfer of Development Rights (TDR) and Conditioned Building Intensity (CBI), standard property valuation techniques, participatory planning, citizen engagement and the role and organization of Citizen Advisory Panels. – Finalized and disseminated a study of land development typologies – As agreed with the MUD, PLGP drafted a study on land development/spatial typologies. The study, which was based on the first-ever detailed examination of land use in Albania, achieved primarily through fieldwork in five model municipalities, includes findings and recommendations regarding land development indicators and criteria. The study was included in the Territory Development and Planning Toolkit that was distributed at a national event (referenced earlier) and sent to municipalities and other planning professionals.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 32 – Released the Territorial Planning and Land Development Toolkit – PLGP and the MUD distributed the Toolkit at a November 2015 national event attended by about 250 mayors, municipal and national government officials, representatives “… For the first time in the last 25 years of the Albanian local governance, the municipalities will have their own General of civic groups and international Local Territorial Plans, which will consider the Technical donors, Peace Corps Volunteers, and Manual for Territory Development. I declare that this is a other local stakeholders. The Toolkit, historical moment because this is the very first time that local produced by PLGP in cooperation governments receive expertize and funds to draft their GLTPs. The Manual for the Territory Planning and Development will with the NTPA, is a 225-page, full- be a unique guide serving the needs of municipalities as well color, illustrated how-to guide to as those of other public authorities. It offers a wide range of preparing and implementing a GLTP methodologies on the ways of conducting land / territory in compliance with Albanian planning analysis in the local urban planning. The Manual also brings and development legislation. The a bouquet of instruments for the land development and specifically for the financial development instruments.” Toolkit provides detailed information for drafting all aspects of a GLTP, —Minister of Urban Development Eglantina Gjermeni at including guidance for conducting the launching of the Territorial Planning Toolkit effective territorial-environmental and socio-economic analyses, an overview of land development techniques, development scenarios, best practices and frequently asked questions. The Toolkit is a significant milestone for the PLGP and Albania. Supported the GoA in preparing Albania’s General National Territorial Plan (GNTP) – another milestone activity was our contribution to the completion of the GNTP - During Year Five, the MUD and NTPA finalized the GNTP and then asked for our assistance during the public consultation phase of the approval process. In response, a PLGP Planning Expert took part in the experts’ panel at the consultation event by participating in the debate and responding to audience questions about technical aspects of the plan. From left: Mayor Elbasan Qazim Sejdini, then USAID/Albania Country Increased the capacities of local governments Representative Marcus Johnson, Minister of Urban Development Eglantina Gjermeni, (planning departments and mayors) in territorial then PLGP Chief of Party Peter Clavelle, planning and land development and Director of National Territory Planning Agency Adelina Greca take part in the – Supported a pilot program of Transferable presentation of the territorial plans and Development Rights (TDRs) in Korça strategic development priorities. municipality – At the request of the MUD, we conducted a real-world test of TDRs in Korça, one of our model municipalities. Ultimately, the test did not demonstrate that implementation of TDRs is financially feasible, but it did generate important information on how to develop and fine-tune a TDR program that we shared with other municipalities and the MUD. – Shared the territorial planning experience of the five model municipalities with the remaining LGUs in Albania – In April, PLGP, in collaboration with, the MUD and the NTPA, held a Peer Learning Event on territorial planning and development where five of our model municipalities (Elbasan, Berat, Kuçova, Fier and Lushnja) presented their in-process territorial strategies and shared their experiences with other municipalities and planning professionals currently involved
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 33 in territory planning. The event was attended by the mayors and planning staff of the 26 municipalities whose planning efforts are being supported by the GoA. Supported five model municipalities in drafting and submitting their GLTPs for approval - In Years Four and Five, the Component IV Team has worked intensively with the planning staff of five model municipalities (Elbasan, Berat, Kuçova, Fier and Lushnja) on the creation of their GLTPs. Activities included: creating joint working groups, obtaining approval of the initial GLTP documents from the Municipal Councils, undertaking visual and territorial surveys and then processing and analyzing the collected information, establishing extensive territorial GIS databases, drafting detailed territorial analyses, holding public forums in each municipality, formulating territorial strategies, territorial plans and capital investments plans and creating strategic environmental assessments and presenting them in public meetings. Assisted civil society groups, citizens, businesses, and non-governmental organizations (NGOs) in increasing their participation in and oversight of territorial planning (with CAPs). – During the GLTP strategy phase – Twenty-one public consultations took place during the strategy phase of the GLTP process. These public meetings were well attended by CAP members, citizens, representatives of public institutions, local experts, municipal councilors and others. – During the GLTP planning phase – Twenty-six additional public consultation meetings took place during various phases of the GLTP process (preliminary proposals, final proposals, strategic environmental assessments, experts’ consultations on historical sites and cultural monuments, meetings focused on rural and agricultural areas, Public hearings were held on the consultations on coordination with neighboring territorial plan in Kuçova (above) and municipalities). Throughout, attendance at the Lushnja (below). events was good with a high degree of engagement in the proceedings. Participants discussed the proposals and recommendations, responded to the environmental, agricultural and territorial analyses, validated information that was presented, provided additional information and came to consensus on issues of importance. – Other consultation meetings – In addition to the large-audience meetings discussed above, the GLTP process included a series of focus groups and closed consultation meetings with forest and water management departments, regional experts (for example, Bankers Petroleum and Alb- Petrol regarding the crude oil industry in Fier and Kuçova), regional environmental agencies and civil emergency and geological service experts.
2.4.3 DEVIATIONS FROM YEAR FIVE WORK PLAN Activities not conducted in Year Five: Training for local planners and municipal councilors – PLGP planned to provide trainings for local planners and municipal councilors; however, the five model municipalities for whom PLGP provided GLTP support requested that we shorten the timeframe for developing the plans by several months so that the approval process could be initiated sooner in the hope of concluding the entire
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 34 process by December 2016. As a result, we increased our level of effort dedicated to the GLTPs while postponing several planned trainings. These trainings are now part of our work plan for the first quarter of Year Six. Territorial planning support for non-partner municipalities – Originally, at the request of the NTPA, PLGP agreed to monitor the work of one or two non-partner municipalities using the Planning Toolkit to guide their planning efforts. Later, however, the GoA changed its territorial planning support strategy by awarding funds that would enable 26 municipalities to prepare GLTPs in partnership with full-service planning organizations. In making these awards, the NTPA and MUD largely endorsed PLGP’s planning methodology and established a set of coordination processes whereby all municipalities engaged in territory planning could benefit from the perspectives and know - how of PLGP’s experts.
2.4.4 CHALLENGES AND OPPORTUNITIES Territorial Planning in Albania is occurring in an ever-changing environment. With significant support from PLGP, Albania’s planning law was substantially revised in 2014, with subsequent work on the related bylaws during 2015 and early 2016. The challenge has been -- and remains -- to marshal the political will and resources (both human and financial) needed to implement the legislation. The ongoing restructuring of national planning institutions creates further challenges. For example, certain decisions (i.e., the creation of a new agency to issue permits and the bifurcation of planning and permitting responsibilities) have occurred without the benefit of PLGP’s input. To date, the two national agencies involved in planning have worked well together but, as two separate institutions, have increased the administrative burden on local development processes, thus creating unnecessary obstacles to the development and building permitting procedures. In the aftermath of the TAR, the GoA provided financial support to 26 municipalities so that they could receive intensive support from outside experts in the creation of their GLTPs. The GoA administered the procurement and selection of these territory- planning experts and specified the terms of reference establishing a time limit of just 18 weeks for each municipality to draft and submit its GLTP for approval. The decision to condense the plan-development process to this degree was ill-advised given the technicalities involved in the process, the administrative burden of creating such a comprehensive plan, the lack of comprehensive GIS data and, above all, the level of quality expected. This was a politically motivated decision that will likely effect the quality of the plans created. Further, the GoA’s abbreviated timeline had the effect of raising expectations among the mayors of PLGP’s model municipalities, leading them to believe that it would be possible to have plans in place prior to the date agreed upon with PLGP. Nonetheless, when these mayors put pressure on our team to accelerate the GLTP development process, we were able to respond positively -- for the sake of the institutional relationships -- and shift a significant portion of the GLTP work from Year 6 to the end of Year 5. As a result, a number of other activities, such as trainings and capacity-building programs, were postponed until Year 6. Ultimately, this adjustment was a positive development because, with most of the work on the GLTPs finalized in Year Five, the plans are likely to be approved during Year Six, allowing PLGP to exceed its contractual obligations and achieve a long-term outcome indicator during the lifetime of the project. However, with national elections in June 2017, there is a chance that the final, national-level GLTP approvals by the National Territory Council could be hampered. With the direct support of PLGP, the GoA achieved an important milestone by finalizing the country’s General National Territory Plan along with two regional plans (Integrated Comprehensive Plan of Tirana- Durres Area and Integrated Comprehensive Plan of the Albanian Coastal Area). Nonetheless, implementation of the plans remain a challenge because the MUD, the NTPA and other Ministries could not sufficiently coordinate their efforts. In addition, GoA is in a process of policy-making and drafting new legislation for regional development, where further coordination between territory planning and the
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 35 integrated planning system (including finances) of GoA is needed. So the challenge for institutional and policies’ coordination is still present. In spite of these daunting challenges, Albania is on the cusp of advancing reforms that will improve the planning and management of urban and regional growth and development. As the lead provider of support and assistance in the planning sector, PLGP has played—and will continue to play—a key role in bringing better planning and growth management to Albania.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 36 3.0 PERFORMANCE MANAGEMENT AND MONITORING In compliance with the PLGP contract, in May 2012 Tetra Tech ARD developed the Performance Monitoring Plan (PMP), which was approved by USAID in April 2012. PLGP milestones, indicators, and some of the targets are embedded in Section C of the contract. The proposed monitoring and evaluation (M&E) methodology and indicators approved in the PMP were very strong, however, during Year One (January 3–September 30, 2012), the PLGP team identified the need to change, nuance, and modify performance indicators based on information collected on the ground during the start- up and the implementation phase of the project. The second PMP was approved by USAID in July 2013. On January 26, 2015, USAID/Albania approved the Tetra Tech ARD proposal for a contract modification. PLGP’s partner LGUs, following the June 2015 local elections, became much larger and more complex. TAR reduced the number of local governments units from 373 to 61. The PLGP contract modification allows for the extension, expansion of existing and new activities and an intensification of assistance and support to both the GoA and local governments as TAR is implemented, and decentralization reforms are advanced. Following the contract modification approval, the project team presented specific proposals to consolidate/modify/delete some of the indicators and proposed new indicators that better reflect PLGP’s work. The amendments to the PMP were designed to link the project’s inputs/activities to outcomes. USAID/Albania approved the amended PMP on July 28, 2015. Facing the real Territorial Administrative Reform realities in the field with our partner municipalities, PLGP’s experts presented specific proposals to USAID to raise the Year Six annual targets. As in the previous PMP, the suggested amendments to the performance indicators include mainly qualitative indicators to understand and measure project success, specifically as it relates to the increased capacity of LGUs as they move towards adopting and implementing decentralized systems, practices, and mechanisms. USAID/Albania approved the amended PMP in May 2016. During Year Five, PLGP has continued to achieve results towards fulfilling the project’s milestones as detailed in the approved PMP. PLGP officially submitted the Territorial Strategies (TS) for five model municipalities and the municipal councils approved all of them in March 2016. Further a toolkit for territory planning and development was drafted published and disseminated to national and local territory planning and development institutions in November 2015. Year Five saw significant progress in reaching and exceeding the annual targets in response to expanded and intensified assistance required by both central and local governments to effectively implement TAR. PLGP, as a lead provider of technical assistance to the MoSLI, finalized a new Organic Law that was approved by Parliament in December 2015. PLGP supported the MoF in developing a new formula for the allocation of unconditional grants to LGUs which the GoA adopted in the annual budgets for 2016. PLGP supported the MUD, NTPA and 5 model municipalities in drafting their GLTPs. In Year Five, the project efforts were also focused on raising LGUs’ capacities in preparing 2016 fiscal packages and budgets; improving the administration and collection of property taxes (including the launching of tax awareness campaigns); and provision of ICT tools and training to improve customer
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 37 service, utilize e-governance, and reduce corruption and error. The project reached and exceeded the annual targets with the institutionalization and influence of CAPs in local communities. CAPs continued to grow over the past year as CAP representatives increased their involvement in their local municipal activities and were invited to a variety of national-level assemblies. PLGP reached the annual targets also in the water sector. PLGP assisted the Water Utilities in the drafting of the Water and Sewage Transitional Plans for the three municipalities of Lushnja, Fier, and Patos. As in the previous years, gender issues are considered in all steps of the project. Although only one partner LGU, Patos, is headed by a female mayor, PLGP data collected indicates significant female participation in other positions of authority, including deputy mayors, department heads, and council membership. The presence of women in such positions in partner LGUs provides an opportunity during the life of PLGP to enhance and maximize the status and effectiveness of women in local governance. During Year Five, the PLGP team continued to make every effort to integrate women in all project activities and ensure that women are beneficiaries of all project components. Project components, although not explicitly targeted at women, improve women’s role in the local decision-making process and strengthen their capacity to interact with local government and improve their quality of life. Examples of PLGP activities in Year Five that have focused on gender and women include: Community-Based Scorecards: Focus on human rights and women including: what incentives and programs exist for female employment, issues of domestic violence, and local representation of women in politics and decision making; CAPs: The majority of CAPs have female coordinators and CAPs have over 60% female membership; and Municipal Councillors Trainings: The majority of Municipal Councillors are female and were targeted in PLGP trainings in Year Five. A detailed description of Year Five Milestones and Indicators is provided in Annex 1 of this annual report.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 38 4.0 BUDGET EXECUTION
Note: The budget is available by request, and at the discretion of, the USAID/Albania mission.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 39 5.0 ADMINISTRATION AND PROJECT MANAGEMENT A contract modification approved in January 2015 allowed PLGP in its fifth year of implementation to continue its intensified assistance and support to both the GoA and local government. By all measures, 2015 and 2016 have been milestone years for democratic and decentralized local governance in Albania. Activities set forth in PLGP’s Year Five Work Plan (as approved on October 2015) have been substantially met, and in some cases exceeded (as described elsewhere in this report). While some activities envisioned for Year Five have been deferred or will continue into Year Six, the life of project goals and objectives will all be achieved. Tetra Tech ARD continues to administer and manage the project as initially proposed. The management structure was designed to encourage Albanian ownership of the decentralization reform process and ensure that Albanian expertise is maximized. As previously reported, with the exception of COP Kevin McLaughlin and expatriate Urban Planning Expert Tony Favro (until March 2016), all other long-term staff on the project are Albanian. Tetra Tech ARD’s partners are two leading Albanian organizations (Co- PLAN and Valu Add Management Services) that bring strong technical skills and experience in their respective areas. Subcontracts for the services of other Albanian organizations have been entered into in Year Five or will be executed in Year Six. Tetra Tech ARD’s staffing and management plans support the successful implementation of PLGP and will leave behind a sustainable legacy of institutions and individuals capable of guiding Albania’s future decentralization efforts. The PLGP staffing plan provides clearly defined roles, responsibilities, and skill sets designed to provide for the technical and managerial needs of PLGP. The PLGP Albanian team includes a Municipal Government/Decentralization Expert (Fatlum Nurja); a Tax Expert (Silvana Meko); a Municipal Finance Expert (Elton Stafa); an IT Expert (Genci Radovicka); a Water/Wastewater Expert (Enkelejda Gjinali); a Civic Engagement Expert (Laureta Memo); a Project Coordinator (Elton Jorgji); a Monitoring and Evaluation/Reporting Specialist (Edlira Shtepani); and local Urban Planning/Fiscal Decentralization Experts (Rudina Toto and Anila Gjika). Ms. Toto’s Level of Effort has been increased in Year Four and Five of the project. Ms. Gjika will continue to work on a part-time basis. The professional team is supported by an administrative staff consisting of a Financial and Administrative Manager (Majlinda Vogli); a Finance/Administrative Assistant (Fjoralba Balla); an IT/Office Assistant (Durim Tabaku); and two Drivers/Logistics Specialists. A graphic illustration of the PLGP Project Staffing Structure is provided below. Short-term experts, both international and local, were also engaged to provide necessary specialized technical assistance during Year Five of the project. Specific activities involving these providers of short- term technical assistance (STTA) included the drafting of a new Local Government Finance Law, conducting the assessment of PLGP ICT interventions; producing a Public Financial Management/Internal Audit assessment of PLGP partner municipalities; implementing the Public Expenditure and Financial Accountability (PEFA) Assessments; drafting and finalizing the Organic Law “On Organization and Functioning of Local Governments”; assistance in business planning for water utilities; support in developing components of the GLTPs; and preparation of a number of policy papers and technical studies. Under the modified Co-PLAN subcontract, a large team of Albanian experts was mobilized during Year Five to assist five municipalities in preparing GLTPs.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 40 Tetra Tech ARD provides project staff, subcontractors, and local partners with guidance and implementation strategies, enabling smooth operation in multiple municipalities simultaneously and in our work with national agencies of the GoA. Tetra Tech ARD’s home office regularly provides programmatic, financial, and M&E support, and it makes available tested management systems and internal controls. Home office support has been particularly helpful in the implementation of ICT activities. Because of the contract modification, the provision of ICT tools and solutions to partner municipalities was expanded and extended during Year Five. The subcontract with the InfoSoft Systems Joint Venture was modified during Year Four to support expanded ICT activities and will be modified again in Year Six to ensure long-term ICT sustainability.
MODIFIED ORGANIZATIONAL CHART PLANNING AND LOCAL GOVERNANCE PROJECT (PLGP) as of September 30, 2016
USAID
Tetra Tech ARD Chief of Party Finance/Admin Manager, MAJLINDA VOGLI Home Office KEVIN MCLAUGHLIN - Finance Assistant, FJORALBA BALLA - IT/Admin Assistant, DURIM TABAKU - Driver, GENCI MANASTIRLIU - Driver, KUJTIM CUKU
M&E/Reporting Specialist, EDLIRA SHTEPANI
Program Officer, ELTON JORGJI
Component I Component II Component III* Component IV (Decentralization Policies) (Improve Local Governance) (Improve Local Services) (Territorial Planning)
Fiscal Decentralization Municipal Governance Tax Expert Municipal Management Water/Wastewater Urban Planning Expert (part time) Decentralization Expert Expert Expert Expert (expatriate)
ANILA GJIKA FATLUM NURJA SILVANA MEKO ELTON STAFA ENKELEJDA GJINALI TONY FAVRO
Information Technology Urban Planning Expert Expert
GENC RADOVICKA RUDINA TOTO
Civic Engagement/ Urban Planning Communications Expert (part time) Expert LAURETA MEMO ANILA GJIKA
Subcontractors and Resource Organizations
Co-PLAN Valu-Add Management Co-PLAN
Institute for Public and Private Regional Development Valu-Add Management Policies Agencies
InfoSoft Systems
Albanian Institute of Science
UN Women
Legend
Key Personnel Subcontractors * Component III activities, primarily focused on water utilities, will substantially conclude in year 4. However, the Component 3 Team (Valu Add) will support Component 2 and 4 activities in years 5 and 6 of a modified contract.
The COP provides overall technical leadership for the integration and coordination of PLGP tasks, with ultimate responsibility for producing program results. He manages all aspects of implementation, planning,
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 41 and programming with input from USAID and our local partners. He interfaces regularly with the Contracting Officer’s Representative (COR) and other USAID staff; coordinates all tasks; identifies issues surrounding implementation; monitors progress against work plans; and captures lessons learned at technical, programmatic, and management levels. PLGP’s implementation involves strategic teaming with Albanian subcontractors, carefully selected for their ability to make clear contributions to PLGP success. The key roles and responsibilities of PLGP partners are summarized below.
FIRM PRINCIPAL ROLES AND RESPONSIBILITIES OF PARTNERS Technical lead for Components 1 and 2, with significant role on Components 3 and 4. As the prime contractor, Tetra Tech ARD manages the PLGP contract and is responsible for the overall management of all subcontractors. Tetra Tech ARD Tetra Tech ARD provides the majority of full-time technical and administrative field office employees, as well as short-term expertise in municipal services delivery, municipal finances, and other key areas. Technical lead for Component 4, with a supporting role on Components 1 and 2. As a major subcontractor on PLGP, Co-PLAN takes the lead for Component 4 and for achieving the results and deliverables pertaining to strengthening the capacity of the GoA and local governments to plan and manage urban and regional Co-PLAN growth. Co-PLAN provides Albanian Urban Planning Experts, as well as the international and local STTA required under Component 4. Co-PLAN also provides the Municipal Finance Expert under Component II. In addition, Co-PLAN lead the effort on the preparation and approval process of five GLTPs. Technical lead for Component 3, with a supporting role on Components 1 and 2. As a subcontractor, Valu Add brings its in-depth understanding of and experience with the management of public utilities in Albania to bear, especially in the water and wastewater sector. Valu Add provides the Water/Waste Water Expert to the project as well as international STTA to improve local government management Valu Add and oversight of publicly owned utilities. In Year Four, Valu Add’s subcontract was modified to support model municipalities in developing plans to manage the delivery of water supply and sewerage services to the newly expanded areas of the municipality. In Year Five, Valu Add supported the preparation of the elements of five GLTPs related to infrastructure.
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 42
U.S. Agency for International Development Planning and Local Governance Project in Albania Rr. Dervish Hima 3 Kullat prapa Stadiumit “Qemal Stafa” Kulla Nr. 1, Apt. 91, Kati 10 Tirana, Albania Tel: + 355-04-450-4150 Fax: + 355-04-450-4149 www.plgp.al
PLGP: FIFTH ANNUAL REPORT (OCTOBER 2015–SEPTEMBER 2016) 43