SOFIA Public Disclosure Authorized CITY STRATEGY Public Disclosure Authorized Public Disclosure Authorized May 2003 SOFIA: THE CAPITAL CITY OF THE REPUBLIC OF BULGARIA Public Disclosure Authorized ‘IT GROWS BUT IT DOES NOT AGE’ PREPARED WITH ASSISTANCE FROM THE CITIES ALLIANCE (THE WORLD BANK AND THE UNITED NATIONS CENTRE FOR HUMAN SETTLEMENTS) SOFIA CITY STRATEGY May 2003 SOFIA: THE CAPITAL CITY OF THE REPUBLIC OF BULGARIA ‘IT GROWS BUT IT DOES NOT AGE’ PREPARED WITH ASSISTANCE FROM THE CITIES ALLIANCE (THE WORLD BANK AND THE UNITED NATIONS CENTRE FOR HUMAN SETTLEMENTS) The Sofia City Strategy is intended to provide a basis for sustainable development of the local economy and for the welfare of city residents. Developed by Sofia’s city management with support from the Cities Alliance, the strategy is informed by recommendations from residents and business community members provided through workshops, surveys and con- sultations. The strategy has helped the municipal administration identify needed improve- ments in five broad areas – economy, services, urban structure, finance and municipal mangement and governance. To help the city administration effectively implement this long-term strategy, a Program Action Matrix outlines priority actions and objectives to be undertaken and addressed in the three to five year period ahead. The consultative and col- laborative approach that has been undertaken in formulating the strategy has influenced and will continue to provide insight on the future role and operation of the city administra- tion. During the formulation of the strategy, the vision for Sofia City was adopted: Sofia is a capital of the Balkans, a city with a competitive economy and sustainable economic growth, a city with high quality of life, attractive for businesses, residents and tourists. Sofia has high quality of transport and essential urban services, a city with efficient urban management promoting transparent and fiscally sound business practices. Sofia’s urban environment enhances opportunities for diverse economic and social development. This document was prepared with assistance from the Cities Alliance* and summarizes the analyses, findings and recommendations of several years of a broad-based strategy develop- ment process. Key contributions to the strategy include analyses undertaken by Sofia municipality and Cities Alliance/World Bank staff, several seminars and meetings with resi- dents, NGOs and civil servants in Sofia and the support of the USAID-funded Local Government Initiative in Sofia. The German Technical Cooperation Agency (Deutsche Gesellschaft fur Zuzammenarbeit) carried out an assessment of the municipal enterprise sector. Its findings and recommendations are outlined in a supplemental report to be pre- sented to the municipality. The Cities Alliance support for facilitation of the development of the strategy and preparation of this document was supervised by Margret Thalwitz, Lee Travers (Sector Managers) and Sudipto Sarkar (Team Leader). Principal author Anders Zeijlon prepared this document with support from Sasha Tsenkova, Kremena Ionkova and Jane Ebinger. Editorial support was provided by Nisha Chatani Rizvi. The views expressed here are the views of the authors and do not reflect the views of the World Bank. * The Cities Alliance is a global alliance of cities and their development partners. It was launched in 1999 with initial support from the World Bank and the United Nations Centre for Human Settlements (UN-Habitat), the political heads of the four leading global associations of local authorities and 10 governments - Canada, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United States. The Asia Development Bank joined the Cities Alliance in March 2002. More information is available at www.citiesalliance.org. 2 Sofia City Strategy Message from the Mayor My fellow city residents, visitors and friends of Sofia, I am pleased to present to you the first ever Sofia City Strategy (SCS) and hope it offers a constructive and useful outline of the goals our city management has set out to achieve in the three to five year period ahead. Intended for a broad audience, this docu- ment is a summary of more than three years of strategy-related work based on the views and recommendations of a number of groups, individuals and experts. Translating all the technical and consultative work undertaken into a comprehensive strategy document was no easy task. Inevitably, conflicting and overlapping ideas were at odds and proposals were either not fully developed or difficult to implement given the legal and financial constraints of the city. The quality of the work and the process that followed nevertheless provided valuable insight in identifying for our admin- istration the right balance between competing priorities and selection of key actions and poli- cies. I would like to thank all participants who contributed to the development of SCS. The analyses, consultations and surveys carried out by international organizations and experts and the engagement with the city administration generated thoughtful discussion and helped to improve overall the way we who work for the municipality see our role developing in the future. We plan to monitor the implementation of the actions outlined in the strategy and continue to consult with Sofia’s residents and stakeholders to ensure that they maximize the benefits of our efforts. I hope you will enjoy reading about our city and, whether you are a resident, a visitor or one of us working for the administration, we hope you will join us in our collaborative effort to improve the way we live and work. Stefan Sofiansky, Mayor of Sofia May 2003 Sofia City Strategy 3 CONTENTS PAGE LIST OF BOXES, TABLES, FIGURES AND MAPS 6 ACRONYMS, GLOSSARY OF TERMS, CURRENCIES AND MEASUREMENTS 7 MAP OF SOFIA CITY 8 THE DEVELOPMENT OF THE SOFIA CITY STRATEGY 9 SUMMARY OF THE SOFIA CITY STRATEGY 12 Purpose of the Strategy 12 City Economy 12 City Services 14 Urban Structure 16 City Finance 16 City Management and Governance 17 Program Action Matrix 18 I. CITY ECONOMY 19 Feedback from the Business Community 19 Sofia in the National Economy 19 Privatization and Economic Restructuring 20 Service Clusters Emerged as Stable Sources of Local Employment 22 Educated Labor Force but Low Employment Rates 23 Key Demographic Indicators and Poverty Data 24 Priorities for Action 26 II. CITY SERVICES 28 Feedback from City Residents and the Business Community 28 Infrastructure Services 30 Water and Wastewater 30 District Heating 31 Urban Transport 32 Solid Waste Management 33 Green Areas Preservation 33 Social Services 34 Health care 35 Education 35 Social Assistance 37 Administrative Services 37 Priorities for Action 39 4 Sofia City Strategy III. THE URBAN STRUCTURE 41 Sofia’s Spatial Structure 41 Housing and Real Estate Markets 43 Office and Retail Space 45 Environmental Concerns 46 Sofia’s New Master Plan 46 Priorities for Action 48 IV. CITY FINANCE 50 The Budget Process 50 Revenues 51 Foreign Loans 52 Expenditures 53 Future Finances 53 Priorities for Action 54 V. CITY MANAGEMENT AND GOVERNANCE 55 Feedback from Residents and the Business Community 55 Sofia’s Constituencies 55 Areas for Improvement in the Municipal Government 56 Priorities for Action 57 SUMMARY OF SURVEYS WITH CITY RESIDENTS AND THE BUSINESS COMMUNITY 59 PROGRAM ACTION MATRIX FOR SOFIA CITY STRATEGY 65 STATISTICAL ANNEXES 78 LIST OF WEB SITES 83 CONTACT INFORMATION OF THE MUNICIPALITY 84 Sofia City Strategy 5 LIST OF BOXES, TABLES, FIGURES AND MAPS PAGE BOXES Box 1: Milestones in the Development Process of Sofia’s City Strategy 11 Box 2: Fast Facts on Sofia 12 Box 3: A Brief History of Sofia 13 Box 4: The Privatization Strategy 29 TABLES Table 1.1: The Leading City Center 20 Table 1.2: Macroeconomic Indicators 20 Table 1.3: Employment and GDP by Sector 21 Table 1.4: Employment in Service and Manufacturing Sectors, 2000 22 Table 1.5: Unemployment Profile 24 Table 1.6: Demographic Indicators 24 Table 1.7: SWOT Analysis of the Economy 25 Table 2.1: Provision of Sewerage Services and Wastewater Treatments in European Capital Cities 31 Table 2.2: Public Transport, 2000 32 Table 2.3: Local Expenditure Assignments 35 Table 2.4: Municipal and State Responsibilities in the Social Sectors 36 Table 2.5: SWOT Analysis of Infrastructure Services 38 Table 2.6: SWOT Analysis of Social Services 38 Table 2.7: SWOT Analysis of Administrative Services 38 Table 3.1: Land Use in Constructed Area 41 Table 3.2: Average Population Density and Industrial Land in European Cities 42 Table 3.3: SWOT Analysis of Urban Structure 48 Table 4.1: Sofia Municipal Budget 50 Table 4.2: Sofia Municipal Budget Revenues 51 Table 4.3: Sofia Municipal Budget Expenditures 53 Table 4.4: SWOT Analysis of Finances 54 Table 5.1: SWOT Analysis of the Municipality’s Management and Governance 57 FIGURES Figure 1.1: Private and Public Employment 21 Figure 1.2: Foreign Direct Investment 23 Figure 2.1: Share of Daily Commutes by Private Vehicles, 1999 33 Figure 3.1: Private Housing in Selected Cities, 1999 44 Figure 3.2: Real Estate Transactions in Sofia, 2000 44 MAPS Map 1: Map of Sofia 8 Map 2. The Green System of Sofia 34 Map 3: Sofia Municipality: Macrostructural Spatial Units 43 Map 4: The System of Multifinctional Centers in Sofia 47 6 Sofia City Strategy ACRONYMS BGN Bulgarian Leva CA Cities Alliance EU European Union GDP Gross Domestic Product EBRD European Bank for Reconstruction and Development FDI Foreign Direct Investment LGI Local