QUARTERLY TASK ORDER PROGRESS AND COST REPORT
JANUARY TO MARCH 2001
ARMENIA LOCAL GOVERNMENT ASSISTANCE INITIATIVE
Prepared for Prepared by 1,4"'·' Carol Rabenhorst Malcolm Simpson The Urban Institute
Armenia Local Government Program US Agency for International Development Contract No. EEU-I-99-00015-00, Task Order No. 807
THE URBAN INSTITUTE 2100 M Street, NW Washington, DC 20037 (202) 833-7200 April 2001 www.urban.org UI Project 06901-008 TABLE OF CONTENTS
Task Order Description ...... 1 Progress of Major Activities ...... 1 Key Deliverables ...... , ...... 1 Program Summary ...... 2 Legal Reform and Local Government Association Development ...... 2 City of Yerevan Reform ...... 3 Fiscal Reform ...... 3 Service Delivery Improvement in Municipalities ...... 3 Citizens Participation in Local Government ...... 4 Manual for Local Government Management ...... 4 Significant Findings and Delays ...... 5 Work Planned for Next Reporting Period ...... 5 Legal Refonm and Local Government Association Development ...... 5 Service Delivery Improvement in Municipalities ...... 6 Citizens Participation in Local Government...... 7 Specific Action Requested ...... 7 Up-To-Date Schedule of Work ...... 7 Program Issues ...... 7 The following Scopes of Work were prepared ...... 7 The following proposals were received ...... 8 The following contracts were closed ...... 9 Meetings ...... 9 Staff Travel and Leave ...... 9 Expatriate Visits ...... 10 Appointments ...... 1 0 Key Personnel ...... 10
Attachments
Cost Report QUARTERLY TASK ORDER PROGRESS AND COST REPORT
ARMENIA LOCAL GOVERNMENT PROGRAM
JANUARY TO MARCH 2001
Task Order No.: EEU-I-99-00015-00, TO 807
Date of Issuance: January 18, 2000
Task Order Description
This task order will ensure that the technical assistance delivered in Armenia will increase government accountability and responsiveness to its citizens, provide more effective and transparent management systems, and increase the accessibility of government.
Amount obligated under Task Order: $1,400,000
Total potential Task Order amount: $4,205,721
Dollars expended to date: $1,108,073
Progress of Major Activities
The Local Government Project implementation plan comprises three core components:
- Legal Reform and Local Government Association Development - Service Delivery Improvement in Municipalities - Citizens Participation in Local Government Affairs
This section of the quarterly report presents the major activities accomplished during the first quarter of 2001.
Key Deliverables
- Performance Plan for 2000 completed - Performance targets set for 2001 mmD Armenia Local ~ 2 Government Program ~
Program Summary
Legal Reform and Local Government Association Development
• LGP experts worked on the draft of the Law on Local Self-Government. A third draft of the Law is currently being prepared.
• Hearings organized by LGP, GTZ and the Government on the Law on Local Self-Government were held in the following communities: Kotayk Marz (meeting in Hrazdan), Ararat Marz (meeting in Artashat), Kentron, Erebuni and Achapniak (Districts of Yerevan). The Marzpet in Aragatsoton Marz organized hearings. Further hearings of the Law on Local Self-Government will be held in the remaining Marzes and Yerevan Districts in April.
• The draft Law on Local Self-Government being jointly promoted by the National Assembly and the Government was sent to the Council of Europe (Venice Commission) for comments. Comments are expected in April.
• The Ministry of Urban Development (Housing Policy Unit) commented on the draft of the Law on Local Self-Government and speCifically on articles relating housing and condominiums.
• The Ministries of Finance and Justice commented on the draft Law on Local Self-Government.
• The National Assembly Standing Committee held meetings on State and Legal Affairs to discuss the draft Law on Local Self-Government.
• LGP completed the translation of the comments from the Council of Europe on the proposed amendments to the Constitution.
• Project counterparts (V. Terteryan-Deputy Minister of Territorial Administration and A. Andreasyan-Deputy Minister of Urban Development) visited USA to study relationships between Central Government and Local Government on economic development matters.
• Discussions were held with donor agencies regarding the implementation of the Law on Local on Self-Government should it be passed in November 2001.
• Municipal associations (specifically Finance Officers Association) were encouraged to engage in the service contracts with cities and districts of Yerevan using their software products to improve cash flow and sustainability. Task Order Progress and Cost Report January to March 2001 3
City of Yerevan Reform
• A working group comprising LGP and City officials was set up to review the administrative and functional structure of Yerevan.
• An outline of a Study Tour for Yerevan City officials to Central European Cities was submitted to USAID.
• Yerevan City officials commented on the draft Law on Local Self-Government.
• Inter donor co-ordination meetings were held to finalize the supply and installation of computer systems to improve financial management and transparency in the 12 districts of Yerevan.
Fiscal Reform
• LGP prepared a program to assist the Ministry of Finance and Economy to perform the Public Expenditure Review for local governments.
• LGP commenced work on the Public Expenditure Review for local governments.
• Pilot cities completed the development of land and property tax databases. Data has revealed that a considerable number of properties in the nine pilot cities are not accounted for (discrepancies between the State Cadaster Department register and City Hall register). Therefore property owners do not receive tax bills from the Local State Revenue Offices. In addition approximately fifty percent of the properties on the State Cad aster Department register do not have a valuation and are therefore are not taxed. The net result is reduced revenues for municipalities.
• LGP continued to work on the harmonization of the Budget Law with the draft Law on Local Self-Government.
• A paper on the Equalization Law was presented to the Ministry of Finance and Economy.
Service Delivery Improvement in Municipalities
• Computers were installed in pilot cities to complete land and property databases. Pilot cities attended training programs on the implementation of land and property tax databases in cities.
• "Commitment control budgeting" software was installed in pilot cities. IIIIIlID Armenia Local ~ 4 Government Program ' .. , ...
• Computers were made available from Eurasia Foundation for the implementation of Citizen Information Centers in seven pilot cities.
• The program to implement the Procurement Law in local governments was prepared.
• Teams have been set up by Save-the-Children (LGP contractors) to commence the Participatory Urban Assessments (PUA) in pilot cities to enable the cities to determine project priorities.
• PUA teams commenced work in Alaverdi on assessing the project needs of citizens.
Citizens Participation in Local Government
• American University of Armenian completed the local government citizen's survey/questionnaire in pilot cities.
• American University of Armenian is undertaking the local government NGO survey/questionnaire in pilot cities.
• Materials to conduct training for Condominium Associations in six districts of Yerevan and six pilot Marzes were completed.
• Training programs commenced for Condominium Associations in six districts of Yerevan and six pilot Marzes.
• A working group commenced drafting amendments to the Law on Condominiums, Civil Code and other laws that have to be harmonized with amendments to the Law of Condominiums.
• A "Business Planning" seminar for Yerevan Condominium Association Presidents was held in March. Approximately 150 condominium presidents attended the seminar.
• LGP held meetings with donor agencies to attract finance for Condominium Association projects.
Manual for Local Government Management
• An outline of the proposed Manual for Local Government Management was prepared. Task Order Progress and Cost Report III January to March 2001 5
• Fact finding visits to pilot cities of (Ijevan, Sevan, Alaverdi, Vanadzor, Kapan and Sissian) were undertaken to better understand the capacity of LGU officials to enable LGP to determine the content of the manual, type and how it should be prepared.
Significant Findings and Delays
Findings-During the quarter significant findings on the fiscal capacity of local governments were revealed. A summary of these findings and possible remedies is presented below. If the remedies are not implemented then it will be extremely difficult for the Local Government Program to have significant impact in the development of local governments in Armenia.
During the quarter LGP in association with Barents (USAID Fiscal Reform Project) collected data from the land and property databases implemented in the nine pilot cities. The data revealed that a considerable number of properties in the nine pilot cities were not accounted for (discrepancies between the State Cadaster Department register and the newly installed City Hall register). The net result is that those property owners that are not on the State Cadaster register do not receive property tax bills from the Local State Revenue Offices. In addition approximately fifty percent of the properties on the register do not have a valuation and are therefore are not taxed. This results in a significant revenue loss for the Cities including the districts of Yerevan. Unless an integrated information system that links the three State Agencies (Cadaster, State Revenue and Treasury) with the City Hall is installed leakage of valuable resources will continue.
Oelays-A delay of one month was experienced in the implementation of the Procurement Law in local governments. The Ministry of Finance and Economy delayed the approval of the new regulations, procedures, processes etc for State procurement.
Work Planned for Next Reporting Period
This section of the quarterly report presents the major activities planned for the second quarter of 2001.
Legal Reform and Local Government Association Development
• Continue to work on LGU reform and integrate the work into the proposed legislative program for LGU reform:
- Review comments from the Council of Europe (Venice Commission) on the Law of Self-Government.
- Finalize draft Law on Local Self-Government. IIBlID Armenia Local ~ 6 Government Program ~
- Open hearings in the National Assembly on the Law of Self-Government May 2001.
- First reading by National Assembly on Law of Self-Government completed early May 2001.
- Second reading by National Assembly on Law of Self-Government completed by the end of September 2001.
- Signed by President in November 2001 to comply with Council of Europe schedule.
• Implement the Procurement Law in local governments.
• Continue to strengthen Local Government Associations (Union of Communities, Union of Yerevan Councilors and Finance Officers Associations).
City of Yerevan Reform
• Continue to work on the design of a "new" administrative and functional structure of Yerevan.
• Organize a Study Tour for Yerevan City officials to Central European Cities.
• Finalize the supply and installation of computer systems to improve financial management and transparency in the 12 districts of Yerevan.
Fiscal Reform
• Continue to work on the Public Expenditure Review for local governments.
• Continue to strengthen the Pilot cities to collect and administer land and property tax.
• Continued to work on the harmonization of the Budget Law with the draft Law on Local Self-Government.
• Work with the Ministry of Finance and Economy on amendments to the Equalization Law.
Service Delivery Improvement in Municipalities
• Implement "Commitment control budgeting" software and Citizens Information Centers in pilot cities. Task Order Progress and Cost Report Iii January to March 2001 7
• Provide training to pilot cities in "Commitment control budgeting" and management of Citizens Information Centers.
• Work towards the install digital links between the City Halls and the local Treasury Offices to improve information flow and transparency.
• Complete the development of asset management plans in four pilot cities.
Citizens Participation in Local Government
• Undertake Participatory Urban Assessments and preparation of projects of sufficient standards to attract finance in pilot cities.
• Analyze data from NGO survey/questionnaire carried out in the pilot cities.
• Undertake training in pilot cities on condominium association development.
• Continue to prepare amendments to the Law on Condominiums.
Manual for Local Government Management
• Continue to develop the Manual for Local Government Management.
Specific Action Requested
Support is required from donor organizations to strengthen the information flow between the State Agencies (Cadaster, Treasury and State Revenue) and municipalities.
Up-To-Date Schedule ofWork
Work is proceeding on schedule. Technical assistance to local governments and Yerevan districts is proceeding.
Program Issues
The following Scopes of Work were prepared
• Consultant Scope of Work to improve the Computer Skills training in pilot cities especially (Kapan and Sissian).
• ConSUltant Scope of Work to assist in the preparation and design of a manual for local government management. IlIi!IIID Armenia Local ~ 8 Govemment Program .••••• '
• Finance Officers Association to provide ongoing budgeting and financial management technical assistance to pilot cities.
• Supply of computers and financial management tools for 12 districts of Yerevan.
• Procurement Training of Trainers and Training (Union of Communities training in five Marzes, City Research Management Institute-training in district of Yerevan, Finance Officers Association-training in five Marzes).
• Expatriate specialist to provide training in LG financial management and budgeting for approximately 180 councilors of Yerevan.
• Yerevan Councilors association to support the training program for the councilors of Yerevan.
• Expatriate specialist to provide support in the local government legislative reform.
• Consultant Scope of Work to co-ordinate the Procurement Training Program and prepare a Paper on Business Ethics.
• Expatriate specialist to provide support on amendments to the Law on Condominiums.
The following proposals were received
• Finance Officers Association to provide ongoing budgeting and financial management technical assistance to pilot cities.
• Local Government Training and Assistance Center to develop "modules" containing non-financial information that will be included in citizens information centers in pilot cities.
• Consultants (Scientific Research Centre for City Management Systems) to conduct training on the implementation of the Procurement Law in 12 Districts of Yerevan.
• Consultants (Yerevan Councilors Association) to conduct training on the implementation of the Procurement Law in five Marzes.
• Consultants (Finance Officers Association) to conduct training on the implementation of the Procurement Law in five Marzes. Task Order Progress and Cost Report Ii! January to March 2001 9
The following contracts were closed
• Consultant to assist in the preparation and design of a manual for local government management.
• Scientific Research Center for City Management Systems to conduct training on the implementation of the Procurement Law in 12 Districts of Yerevan.
• Union of Communities to· conduct training on the implementation of the Procurement Law in five Marzes.
• Finance Officers Association to conduct training on the implementation of the Procurement Law in five Marzes.
• Yerevan Councilors Association to assist in the training of district councilors in financial management.
• Local Government Training and Assistance Center to collect non-financial information.
Meetings
• Monthly meetings-USAID (October 10, 2000, November 6,2000, December 6, 2000, February 6, 2001, and March 7, 2001).
Staff Travel and Leave
• Advisers visited pilot cities to implement land and property databases.
• Advisers visited pilot cities to undertake "on-site" training in financial management using "Commitment control budgeting" software.
• Advisers visited pilot cities to develop asset management plans.
• Advisers visited the Yerevan districts to discuss asset management plans.
• Advisers visited pilot cities to better understand the organization structure of the city to enable LGP to design the manual on local government management.
• Advisers visited pilot cities to initiate Participatory Urban Assessments for the developments of capital projects.
• Advisers visited Yerevan City Hall. III'mIJ Annenia Local ~ 10 Government Program ~
• Personnel from American University of Armenia visited pilot cities to complete the collection of data for the NGO survey.
Expatriate Visits
• C. Rabenhorst-specialist in Condominium Law (February 27 to March 14).
• F. Conway-specialist Budget Law and Administrative Decentralization (February 26 to March 3).
Appointments
• S. Coxson-Expatriate Adviser, joined LGP.
Key Personnel
Carol Rabenhorst; (202-261-5767; [email protected]); Malcolm Simpson, ([email protected]).