Improved Financial Sustainability in Functional Areas

Presentation for the Study Tour in Switzerland

Lucerne, 16 December 2013

Vabona Karakaci/Blendi Bushati Functional areas study in 5 regions of the Country

The purpose of the research 2Identification of new partner LGU-s for the third phase of dldp. Research question: Which Local Government Units are sustainable and have good governance indicators that could serve as performance models?

To serve as an input for the on going discussion on the territorial reform in Albania.

Research question: Which are the functional areas currently in the five regions (Diber, Durres, Kukes, Lezhe and Shkoder) where the third phase of dldp is going to work?Functional areas (i) The concept of the functional area refers to a space that is not to be defined along political lines, but more around different interactions happening in that shared space. The space where the interactions between the inhabitants, the cooperation between the economic and government entities are dense and frequent. Graphical presentation 3GeographyPhysicalAdministrativeEconomySocialFunctional areas (ii) The analysis of interactions:

Employment ( Where do people go to work? Is there a substantial number of people working in other LGUs? Are there enterprises with a big number of employees attracting people form other LGUs? ) Consumption/markets (Where do people buy ? Where do people buy consumables and durable goods?) Access to services (i.e. Social- health and education; transport; main public lines and frequency etc.)Inter- LGU cooperation (Analysis of current and expected cooperations between LGU-s in areas such as waste management; water supply, economic development projects etc.) Functional areas-employment Resources Used:

Interviews with LGU representatives Discussion in local focus groups Data from the employment offices/tax offices on the biggest employers.Interviews/discussion with the business representativesDiscussion in regional workshops

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Functional areas-consumptionResources used :

Interviews with LGU representatives Economic profiles of area and local/regional development strategies.Discussions in local focus groups Verification via local communities or other sources.

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Functional areas Access to services Resources used:

Interviews with the education and health directorates. Interviews with the LGUs. Verification with statistics, written sources.Direct contacts with the directorates of schools, hospitals etc. Regional Workshops.

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Functional areas Inter-communal cooperationResources used:

Interviews with the LGU representatives.

Interviews with the Qark Departments.

Qualitative interviews with the water enterprises and irrigation boards.

Reports on InterLGU cooperations.

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Functional areas other dimensions 9Mobility Main public transport lines. Environmental- Shared natural resources.Development perspectives Big public or private project that could change the current scenario.Cultural/traditional- Relations between communities. Methodology and process main steps (i) 10Desk Work. Reviewing of existing documents; strategies and profiles of the LGU-s and Qarks. Data collection from the regional and de-concentrated agencies such as health adn education directorates on the location of the main services, transport routes and public transportation, water utilities , markets, employment and businesses etc.

Main product : First delineation of the functional areas with a short description and related rationale.

Support instruments : Guidelines on the desk work and main existing documents at regional, local and interLGU level.

Methodology and process main steps (ii) 11Collection of information on selected indicators of local governance. The information will be collected in around 30 Local Government Units (LGUs) in the regions Diber , Kuks, Durrs. Information based on individual interviews with the LGUs regarding the territorial interaction for the functional areas marking purposes will also be collected.

Main product : Fulfilled questionnaires in all the pre-selected LGUs.

Supporting Instruments : The questionnaires prepared. Methodology and process main steps(iii) 12Preparing and holding workshops in each functional area proposed with key representatives of the area to understand interactions.

Main product: Second delineation of the functional areas, and identification of sub-regional centers proposal and related rationale.

Preparing and holding regional workshops per each region with key representatives of the area to validate the functional area delineation prepared so far (one per region) and identification of sub-regional centers.

Main product: Third and final delineation of the functional areas with a short description proposal and related rationale.

Supporting instruments Guidelines for the preparation of the workshops. Methodology and process main steps(iv) 13Preparation of the summaries per each functional area with the respective maps and descriptions.

Main product : Final report and respective data and maps.

Supporting instruments: Final report template Main findings: The concentric model Clear district driven functional areas in the poorest isolated district and regions.One gravitational centerthat is the town/municipality center of the district Functional area with stronger linkages in the nearby area ; loosing the linkages intensity the farest from the center.No other important centers.

Implication for the reform: Local units with big population and territory. To be solved the issue of the peripheral Lgus with small population density.

The concentric model

Polycentric Model Big regional center Also smaller satellites that serve as center to smaller surrounding areas Several solutionsAreas overlap with-each other ; dense interaction between areas. Implication for the reform: There are several solutions The study could serve to influence policy decisions as well, i.e selection of the development model and usage of the resources.

Cross Border models 17

Cross-border areas - National , regional or district borders Overlapping with the district driven areas Driven by tradition or new economic realities Dependent on development scenarios. Implication for the reform: There are several solutions The study could serve to influence policy decisions as well, i.e selection of the development model and usage of the resources.

Functional areas vs. proposal for new LGU-s 18

Examples concentric cross border 19

Examples Policentric Durres Shkoder 20

Examples Kukes Lezhe21

Main results- if applied for the reform QarkFirst Level LGUs Average population Median Density Dibr353-43,92645,81149141Durrs164-516,42436,692203250Kuks 2833,15928,96633141Lezh213-46,38242,27779250Shkodr 335-85,59136,7894655Total 13318-24Financial Indicators example Lezh 23Financial Indicators example Lezh 24Financial Indicators example Dibr 25Functional areas Diber26Advantages 27Based on real interactions of the social and economical dynamics, mobility and governance. It is a bottom up approach and considers the local realities.It consolidates existing cooperation practices. It leads naturally to recommendations for the intensification of Inter-communal cooperation or the natural merger between the LGUs. Limitations of this research 28Based mainly on qualitative data, interviews , workshops, meetings.

Starting point from the current Qark borders.

Given the limited resources and time , it was impossible to visit all the Local Government Units.

Supporting the results with objective quantified data is not foreseen at this stage , but only at a later stage when the functional areas are validated in case of a possible replication beyond the initial objectives of the study.

A part of the LGUs will not be part of the functional areas, hence, strictly speaking the methodology does not providea solution for these areas. Functional areas as an input to the territorial reform (i) The analysis of the movement patterns of the population (employment, consumption, services, leisure)Analysis of interLGU cooperations. Defining the gravitational centres. Delineation of the functional area maps. The maps with the new potential borders of the LGUs discussion basis for the territorial reformsConsolidation of the scenarios with more detailed statistical data and playing with different scenarios.

Functional areas as an input to the territorial reform (ii) A methodology with the respective steps of data collection as well as guidelines and questionnaires is prepared.

A final report as a good basis to continue the reform discussion for the five regions (North and Durres) will be prepared soon.

Lessons learnt form the process in regard to the existing data resources.

Functional areas as an input to the territorial reform (iii) To replicate the process at the national level:

Standardising the data basesQuantification of the methodology Adding other indicators for a more complete panorama of the functional areas as New LGUs. Guidance and monitoring of the process at national levelImplementation at regional and local level.

Next steps (i) Presentation of the findings and validation in two levels: - The experts group at national level - Local partners in the study tour

Preparation of the final report.

Next steps (ii) beyond the mandate of the current study Further data to be collected (at a second stage) : Efficiency of services in the functional areas: Indicators to be collected include: financial indicators ( i.e. own revenue/capita) ; administrative (human resources) and benchmarking to regional indicators ; access to services (I.e road access to the FA center). Social cohesion: Traditional and cultural linkages between the community in one FA; political cohesion?Economy: Unemployment levels and poverty rates.

Preparation of a handbook on the implementation of the methodology at country level.