LOCAL SELF-GOVERNMENT IN ARMENIA (2019) Book 12 Edited by Vahram Shahbazyan, Ph.D. technical Sciences Yerevan 2020 UDC 352 This book is published by the generous support of American people through the United States Agency for International Development (USAID). The contents of this publication are the sole responsibility of the authors and do not necessarily reflect the views of USAID and U.S. Government. Local Self-government in Armenia (2019), Book 12, edited by Vahram Shahbazyan, Yerevan, 2020, 120 p-es This book contains 2019 annual monitoring report on the state of affairs in local self-government of the Republic of Armenia. This book is intended for policy and decision makers in the area of decentralization and local self-governance, representatives of local government bodies, international and non-government organizations, experts, lecturers, students and larger audi- ence interested in the field. ISBN 978-9939-50-469-8 © Communities Finance Officers Association 142 CONTENTS LIST OF ACRONYMS ...................................................................................................................... 144 LIST OF tABLES .............................................................................................................................. 145 LIST OF FIGURES .......................................................................................................................... 147 PREFACE ....................................................................................................................................... 148 1. LEGAL AND PROGRAMMATIC ASSESSMENT OF LOCAL SELF-GOVERNMENT REFORM .................................................................................................................................... 152 1.1 Legal Assessment of Local Self-government Reforms ................................................................. 152 1.2. Programmatic Assessment of Local Self-government Reforms ................................................ 159 1.3. Performance of Armenia’s International Commitments in Local Self-government ................ 161 2. ADMINISTRATIVETERRITORIAL DIVISION AND INTER-MUNICIPAL COOPERATION ...... 162 2.1. Administrative-territorial division.................................................................................................... 163 2.2. Inter-municipal cooperation .......................................................................................................... 167 3. FORMATION, LIABILITIES AND ACTIVITIES OF LSGBS, PARTICIPATION OF CIVIL SOCIETY IN LOCAL GOVERNANCE ......................................................................................... 169 3.1. Formation, Liabilities and Activities of LSGBs............................................................................... 169 3.2. Civil society participation in the local governance ..................................................................... 173 4. MUNICIPAL ASSETS, DEVELOPMENT PROGRAMS AND FINANCIAL AUtONOMY ............... 176 4.1. Municipal Assets .............................................................................................................................. 176 4.2. Municipal development plans and budgeting processes ........................................................... 178 4.3. Municipal budget revenues ........................................................................................................... 181 4.4. Debt Management .......................................................................................................................... 186 4.5. Financial Accountability .................................................................................................................. 187 5. COMPLIENCE OF LSG RESPONSIBILITIES AND MUNICIPAL FINANCES ............................... 189 6. COMPLIENCE OF ADMINISTRATIVE STRUCTURES, HUMAN AND INFORMATION RESOURCES WITH MUNICIPAL ISSUES, INTERNATIONAL ASSISTANCE........................... 203 6.1. General capacities of LSGBs and municipal staff ....................................................................... 203 6.2. Municipal Service .......................................................................................................................... 207 6.3. Training for municipal servants .................................................................................................... 211 6.4 International Assistance .................................................................................................................. 213 7. DELIVERY OF PUBLIC SERVICES ..................................................................................................... 219 7.1. Public services delivered by municipalities .................................................................................. 219 7.2. Municipal service management ..................................................................................................... 235 8. RESULtS OF THE LOCAL GOVERNANCE ANNUAL ASSESSMENT LG INDEX FOR 2017, 2018 AND 2019 .......................................................................................... 237 CONCLUSIONS AND RECOMMENDATIONS ........................................................................................ 241 Conclusions .............................................................................................................................................. 241 Recommendations ..................................................................................................................................... 245 BIBLIOGRAPHY ......................................................................................................................................... 248 APPENDICES .............................................................................................................................................. 253 143 LIST OF ACRONYMS RA Republic of Armenia NA National Assembly MTAI Ministry of Territorial Administration and Infrastructure CoE Council of Europe EU European Union ENP European Neighbourhood Policy OGP Open Government Partnership ECLSG European Charter of Local Self-Government USAID United States Agency for International Development SDC Swiss Agency for Development and Cooperation IBRD International Bank for Reconstruction and Development EBRD European Bank for Reconstruction and Development ADB Asian Development Bank GIZ German Agency for International Cooperation ATDF Armenian Territorial Development Fund CFOA NGO Communities Finance Officers Association non-government organization EPF Eurasia Partnership Foundation Information Systems Development and Training Center non-government ISDTC NGO organization LG Local Governance LSGBs Local self-government bodies FYMDP Five-year municipal development plan AWP Annual work plan IMU Inter-municipal union MNCO Municipal non-commercial organization CJSC Closed joint stock company SME Small and medium enterprises MMIS Municipal management information systems GDP Gross domestic product CSPS Civil Society and the Private sector CSO Citizen Service Office PHS Primary healthcare service NOC Nursing-obstetrics center 144 LIST OF TABLES table 1. Distribution of RA land stock by land ownership types as of July 1, 2019........... 162 table 2. Administrative-territorial division and population of Armenia (as of January 1, 2020) ....................................................................................... 165 table 3. Administrative-territorial reforms by stages as of January 1, 2020 .................. 166 table 4. Brief information on the database of property tax and land tax as of February 10, 2020 ............................................................................................. 168 table 5. Number of elections of LSGBs in 2019, by marzes ........................................ 169 table 6. Political affiliation of directly elected mayors in 2019 .................................... 170 table 7. Quantitative data of municipality mayor liabilities by individual types and sectors (as of December 31, 2019) ........................................................ 172 table 8. Municipal expenditures on non-financial assets (including Yerevan), 2017-2019 ........................................................................................................ 177 table 9. Inflows on sales of non-financial assets of municipalities (including Yerevan), 2017 – 2019 (mln. AMD)........................................................ 178 table 10. The number of subvention projects co-financed from the RA state budget during 2019 and the allocated amounts to those projects as per marzes (mln. AMD) ....................................................................................................... 179 table 11. The number of ATDF-implemented projects during 2019, and the co-financing sources and amounts as per the RA marzes (mln AMD) ....................... 180 table 12. Types of the RA municipal budget revenues and their shares in total revenues, 2017-2019.......................................................................................... 181 table 13. Share of Yerevan budget revenues in total revenues of the RA municipal budgets in 2019 ................................................................................................. 183 table 14. Official grants as revenues of municipal budgets in 2017-2019 ..................... 185 table 15. Fund budget revenues of the RA municipalities and the share of Yerevan fund budget revenues in 2019 ............................................................................