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City Management & Governance |
Programming Considerations of City Management & Governance
Enabling Environment
Decentralization should enable cities to better manage service delivery by giving local governments the autonomy to set tariffs and user fees and access other finance mechanisms; to determine the mix and level of services based on community priorities and preferences; and to design efficient service delivery methods including partnering with the private sector and NGOs. National laws and regulations should continue to play the role of setting health and environmental standards, ensuring a level playing field for private sector competition, providing oversight to local governments, and for strengthening capital markets so cities can access private sector finance. Getting the enabling framework right can facilitate greater investment in service delivery and can create the necessary incentives and disincentives to improve service delivery at the local level.
While national governments are responsible for setting the legal and regulatory framework, local government associations can play a key role in advocating on behalf of municipalities to ensure that city and town governments have a voice at the national level. Capacity building support for local government associations generally focuses on strengthening their advocacy role, improving their networking function through communications and outreach, and enhancing their technical leadership role in terms of providing training and other services to members.
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Strategic Planning
A common vision about where the city wants to be in 10-20 years, which helps align stakeholder efforts and guide the use of local resources for development is an incredibly powerful tool for city authorities. One way to achieve this shared vision is to develop a City Development Strategy (CDS) which is an action plan for equitable growth in the city and for improving quality of life for all. It is developed and sustained through participation by local authorities, the community and local businesses and through pooling of resources, financial and human. While the components of a CDS may differ by city, all CDSs aim to improve urban governance and management, increasing investment to expand employment and basic services with a clear commitment to poverty reduction.
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Budgeting & Financial Management
The annual budgeting and planning process supports the larger strategic plan for the city by providing the operational support to identified development priorities. Just as the planning process can be enhanced through community participation, the budget process can be strengthened through citizen engagement. Incorporating relevant stakeholders in budgetary planning allows citizens to understand the rationale for decisions made and the tradeoffs they represent, thereby building support for city actions and reducing the likelihood of conflicts arising from future changes to plans. It also allows cities to confront sensitive and potentially divisive issues such as poverty reduction, the re-distributive effects of tax and fee arrangements and subsidies.
Increasing transparency and participation in the budget process is one way that local governments can put good governance principles in to practice. Implementing sound financial management practices can also increase efficiencies that free up limited budget resources for priority services. Further, transparent budgeting, accounting and reporting practices are essential to improving local government creditworthiness; this is important to municipalities interested in accessing market-based financing to expand or improve the quality of their urban services.
Programs aimed at strengthening local government planning, budgeting and broader financial management practices helps to create the necessary foundation for improved service delivery and can create the right environment to advance democratic principles at the local level.
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Citizen Ownership and Management
Cities have found that allowing citizens, through user groups, to take on the roles of ownership and management for service provision can lower costs, improve quality and increase customer satisfaction. Some user groups manage only one type of resource or service, such as water supplies, whereas others act as mini multi-purpose governments, covering a range of services. For example, some housing condominiums and community land trusts may coordinate provision of services such as water supply and sewerage, own and manage infrastructure related to those services, develop communal property for commercial activities and administer de facto social assistance programs through unequal collection of fees. The best functioning user groups have shown that the sense of ownership of their members translates into cost savings in infrastructure maintenance and investment and improved collection of service fees. User groups also develop urban governance skills that later can be applied in other civic participation opportunities if principles of transparency, accountability and participation are incorporated in the functioning of the user groups. In working with user groups, it is important to ensure that they do not duplicate or undermine democratically elected government structures at the local level.
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Metropolitan and Community-Based Services
Service delivery can be managed at levels either above or below the city government. Cities may find it economical to cooperate on delivering services that naturally extend beyond their borders or when economies of scale or complementarities exist. An example of metropolitan cooperation is the management of supply and distribution of water in the Hyderabad, India metro area. In the other direction, service delivery can be effective at the community level by empowering user groups and citizen associations to develop effective solutions to their community's needs. The involvement of citizens as owners and operators may offer savings as the residents may be more careful to ensure proper maintenance of capital they have bought themselves. Researchers have found that community-built sewerage systems cost approximately one-half to one-third the costs of systems built by governments. Condominiums also have shown improved collection rates, as citizens police themselves in the payment of fees.
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Corporate Governance
Whether urban services are provided directly by the local government or through a private sector under contract with the municipality, practicing corporate governance at the utility level can improve management practices and lead to improved service delivery. At its most basic level, "corporatizing" water and sanitation services, means running the utility as a commercial entity. Applying corporate governance principles to a utility requires balancing economic and social benefits. To achieve the right balance, autonomy over financial and technical decisions is coupled with accountability. While utility management should have greater control over decisions about human, financial and capital resources; this must be countered by an accountability structure that creates incentives for improved performance and sets clear consequences for not achieving established performance targets. Accountability structures should be clearly established through regulation which remains the sole responsibility of the public sector. By creating incentives at the individual and utility level to improve performance and by fostering a commercial and customer orientation, it is possible to improve operational efficiency and create the foundation for expanding service coverage and/or improve the quality of services.
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Accountability
Accountability often refers to the relationship between city officials and their constituents, but also includes the relationship between contractors and city governments, citizens and service providers and city governments and other levels of government. One set of tools for improving accountability are efficiency measures that compare output produced or outcomes accomplished to inputs provided. The use of contractors for service delivery actually makes it easier to develop efficiency measures as costs are clearly defined. Performance benchmarks are additional tools that help detect problems, but also build confidence as improvements are tracked over time.
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