The Local Government Reform of 1970

1
The Local Government Reform of 1970

• Background
• changing family structure
• migration to urban areas
• growth in public expenditure
• Objectives
• creation of large, more efficient, and
  financially more self-sufficient units
• decentralising public administration
• increasing the number of local government tasks
• greater citizen participation

2
Reasons for the Danish Local Government Reform in
1970

• Municipalities wanted more independence
• Economic and demographic changes
• Increased demand for public services
• Need for a more rational financial system
• The Parliament wanted to decentralise

3
Specific problems before 1970

• Cities had no room for geographical expansion
• Complex territorial structure
• Many small municipalities (95 had less than
  5,000 inhabitants)
• Small and weak administration in rural
  municipalities (50 had no staff at all)
• Weak financial basis in municipalities and
  counties
• Little influence for local politicians (limited
  decentralisation)
• Unsatisfactory school system

4
The change in local government structure

• 1958
• Number of local governments 1,388 275
  (2000)
• Average area in square km 31 157
  (2000)
• Average number of voters 1,996 14,305
  (1995)
• Number of local politicians 11,529 4,773
  (1995)
• Number of counties 24
  14 (2000)

5
Process of Local government Territorial Reform
in Denmark

• Establishment of local government Reform
  Secretariat in MOI 1962/63
• First investigations in selected municipalities
  (pilot areas)
• Legislation with basic principles for formation
  of new municipalities
• Establishment of an Implementation Committee with
  representation from Parliament, Local government
  Associations and MOI
• Comprehensive investigations by the Reform
  Secretariat of municipalities and counties, with
  recommendations of formation of new
  municipalities
• Dialogue with municipalities, recommended for
  amalgamation
• Decision on amalgamation by Minister of the
  Interior
• Reform completed with local government elections
  in 1970

6
Denmark - Counties
7
Denmark - Local Authorities
8
Amalgamation of 1 county 5 municipalities on
Bornholm

• Why amalgamation on Bornholm?
• Negative economic development forces new
  solutions
• Efficiency of the LG administration not optimal
  and laws and regulations from EU and Danish Gov.
  demand more administrative expertise than is
  currently available to be effectively implemented
• Increasing demands from the population puts
  municipalities under pressure
• The 5 municipalities have a limited ability to
  take unpopular, but necessary decisions (eg.
  schools)

9
Bornholm, 59,000 ha (The Danish Hiiumaa)
10
Amalgamation of 1 county 5 municipalities on
Bornholm

• Current structure
• Bornholm county 44,300 inhabitants
• Rønne Municipality 15,000 inhabitants
• Nexø Municipality 8,500 inhabitants
• Allinge-Gudhjem Municipality 7,600 inhabitants
• Aakirkeby 6,600 inhabitants
• Hasle Municipality 6,400 inhabitants

11
Amalgamation of 1 county 5 municipalities on
Bornholm

• The process
• Year 2000 Investigation of development
  potentials in existing LG structure within the
  following areas public schools, care taking of
  the elderly, protection of the environment, use
  of IT in administration, tax administration, and
  collection of taxes and loans
• Development of various scenario (through use of
  intermunicipal cooperation, extended use of
  contracting out of LG services, extended use of
  IT)
• Conclusion 5 municipalities decide that a new
  administrative-territorial structure needed (Jan
  01)

12
Amalgamation of 1 county 5 municipalities on
Bornholm

• The process
• Establishment of a Bornholm negotiation
  committee, with a secretariat, to clarify and
  negotiate with MIA/MOF about economic and other
  conditions in connection with the amalgamation
• The County of Bornholm agree with the 5
  municipalities to form one future
  county/municipality (during Fall 2001) - future
  name Bornholm Municipality
• Advisory referendum in 5 municipalities 29 May 01
  (agreed by county 5 municipalities)
• The population in all 5 municipalities vote in
  favour!! (totally 73.9 in favour)

13
Amalgamation of 1 county 5 municipalities on
Bornholm

• The process
• County 5 municipalities request Min. of the
  Interior to draft a law on amalgamation as of 1
  January 03, Ministry agrees but cannot do this in
  time to suspend the ordinary election in November
  2001
• 8 administrative working groups are established
  to make an overview of areas to decide upon in
  short and longer terms, covering finances,
  salary/personnel matters, IT, secretarial
  functions, children/youth/culture, social
  area/hospitals, technical matters/environment/util
  ities, tax/debt collection
• Establishment of 1 information group to issue
  amalgamation newsletter, website, and manage
  contact with the press

14
Amalgamation of 1 county 5 municipalities on
Bornholm

• Process
• Ordinary election to the existing 5
  municipalities and 1 county is held in November
  2001. The councils will sit until 31 December
  2002.
• Preparation of political-administrative models by
  2 consultancy companies (Spring 2002)
• Election of the new Bornholm Municipal Council
  will take place 29 May 2002 (27 members)
• Bornholm Municipal Council will function as
  Amalgamation Commission 1 July 31 Dec 2002
  and as Ordinary Council 1 Jan 2003 31 Dec
  2005
• Amalgamation Commission will decide on
  amalgamation conditions during Fall 2002

15
Amalgamation of 1 county 5 municipalities on
Bornholm

• Major Problems
• Decide on political-administrative structure,
  employment conditions and make administrative
  systems operational before 1 January 2003
• Decision making vacuum 29 May 01 29 May 02
• Drafting of budget for 2002 and also budget 2003
• Change all intermunicipal cooperations before 1
  January 2003
• Curb spending until new Council takes over 1
  January 2003
• Splitting of political power among individual LG
  politicians of which most will have to find new
  roles

16
Amalgamation on Bornholm Financial Conditions

• Equalisation and state grants
• Future Bornholm Municipality will be part of
  equalisation systems for both counties and
  municipalities, hence no changes expected
• Future Bornholm Municipality will receive the
  basic state grant for the former 5 municipalities
  (administration grant 7.5 mill DKK per year
  per municipality) in a period of 8 years
• Bornholm will maintain access to Grants to
  Municipalities in Especially Different Conditions

17
Amalgamation on Bornholm Administrative
Structures

• Model 1 Geographic model
• One sector administration (education, social
  area, infrastructure and planning, etc.) in each
  of the 5 former municipalities
• Overall administrative department either placed
  centrally or split in the 5 former municipalities
• One-stop-shops in each of the 5 former
  municipalities
• Political institutions either placed centrally or
  split in the 5 former municipalities

18
Amalgamation on Bornholm Administrative
Structures

• Model 2 Centralized model
• The administrative departments are placed
  centrally in one place
• The political institutions are centralized in one
  place
• Decentralized local government service delivery
  will take place through service centres in each
  of the 5 former municipalities, incl.
  one-stop-shops

19
Amalgamation on Bornholm Administrative
Structures

• Model 3 Model with emphasis on contracting out
• As many services as possible are contracted out
  externally (usual model) or internally (contract
  management)
• Use of extended internal decentralisation to the
  local government institutions (schools,
  kindergartens, homes for elderly, etc.)
• Political and administrative structure and
  management can follow both model 1 or model 2

20
Amalgamation on Bornholm Political-Administrative
Models

• Model 4 Concern model
• Centralized political management
• Extended use of internal decentralisation where
  LG institutions and administrations may become a
  form of daughter companies this can be made
  operational by use of management by goals

21
Admin.-Territorial Reform in Latvia

• 1992-2003 Voluntary process
• 1992-93 First investigations of LG infrastructure
• 1993-95 Preparation of new local government
  legal, organisational and financial foundations
• 1995-96 Pilot investigations in selected clusters
  of municipalities
• 1996-7 First voluntary amalgamation around
  Kandava town (3 municipalities)
• 1998 Law on Administrative-Territorial Reform

22
Admin.-Territorial Reform in Latvia

• Law on Administrative-Territorial Reform 1998
• Defines overall time plan (Voluntary process
  until 31 Dec. 2003, Administrative (forced)
  process 1 Jan-30 Nov 2004, election to new
  councils in 2005
• Presents 7 very vaguely formulated criteria
  (long-term development potential, financial base,
  necessary infrastructure, number of inhabitants,
  history, access to services, other conditions)
• Financial support to amalgamating municipalities
  (1-5 of total sum of amalgamated budgets)

23
Number of local authority units
24
Local authorities according to number of
inhabitans
25
Admin.-Territorial Reform in Latvia

• Law on Administrative-Territorial Reform 1998
• Sets procedures for investigations and
  preparation of amalgamation projects
• Establishes a Council of Administrative-Territoria
  l Reform (8 Local Government 8 State
  representatives, Ministry as secretary)
• Coordinates the ATR process
• Confirms the ATR investigation methodology
• Evaluates investigation results and
  recommendations
• Drafts normative acts on ATR

26
Admin.-Territorial Reform in Latvia

• Local Government Territorial Reform Secretariat
• 1997-1998 4 persons, supported by EU
• 1998-2000 5 persons, supported by EU
• 2000- Secretariat integrated in the Ministrys
  Territorial Reform Department (Ministry of
  Special Assignment for State Administration
  Reform)
• ATR Investigations
• 1997-2001 17 regional investigations supported
  by EU, 9 regions financed by Latvia
• Many small scale investigations and amalgamation
  projects financed by Latvia

27
Admin.-Territorial Reform in Latvia

• Results today
• 34 municipalities (out of approx. 585)
  amalgamated into 14 new municipalities
• Council on Administrative-Territorial Reform has
  approved 4 basic criteria for new municipalities
• Min. population 5,000 inhabitants
• One town one municipality
• Road system must have functional standard
• Max. 30 km from the periphery to the center

28
Admin.-Territorial Reform in Latvia

• Results today
• Two national projects have been through a
  2 months public hearing in Summer 2001
• 33 new municipalities ( 26 regions 7 towns,
  Lithuanian variant)
• 102 new municipalities

29
Admin.-Territorial Reform in Latvia

• State support to ATR
• In 2002 160,000 Lats provided to finance small
  scale projects on cooperation and amalgamation
  and 240,000 Lats provided for ministerial
  activities to support ATR
• 40 of ministerial funds go to information
• TV spots twice a month about topical themes of
  ATR
• 2 films about ATR developed
• Inputs delivered to regional radio stations on
  ATR
• A booklet for citizens on ATR is in printing,
  350,000 copies (contains basic information, aims,
  goals, process of ATR and information about the
  possible role of the citizens themselves)
• Ministry has ATR department with 6 employees

30
Standard Amalgamation Agreement (Check-List)

• Partners and territory of the local government
  amalgamation
• The name and the status of the new municipality
• Name
• Status
• The date of the establishment of the new
  municipality

31
Standard Amalgamation Agreement (cont.)

• The Amalgamation Commission
• Tasks and competences of the Amalgamation
  Commission
• Composition of the Amalgamation Commission
• Selection/Election of the Amalgamation Commission
  Representatives and its Chairman
• Decision-making Mechanism in the Amalgamation
  Commission
• Secretariat of the Amalgamation Commission

32
Standard Amalgamation Agreement (cont.)

• Statutes and Regulations for New Municipality
• Transfer of Legal Rights and Duties
• Transformation of Inter-municipal Cooperation
• Licences and permits
• Decision on Political and Administrative
  Structure
• Procedures for employment of LG Employees

33
Standard Amalgamation Agreement (cont.)

• Finances
• Methods of transfer of Assets and Liabilities,
  Right to collect Taxes and Fees, Right to Issues
  Licences and Permits etc.
• How to determine the Budget for the First Year
  after Amalgamation?
• How to undertake Financial Obligations Affecting
  the New Local Government and Transgressing the
  Budget?
• Who should make Accounting Reports for the
  municipalities that seize to exist?

34
Standard Amalgamation Agreement (cont.)

• Concept Issues of
• Municipal Infrastructure
• Education policy
• Social Security
• Health Protection
• Maintance of public order
• Culture policy
• Development and physical planning
• Public Transportation

35
Standard Amalgamation Agreement (cont.)

• Industry and Tourism Development
• Environmental protection
• How to settle disagreements
• How to provide information to the inhabitants
  about the amalgamation process
• Date of Effect of the Amalgamation Agreement
• Information
• Signatures of Representatives of Amalgamated
  Local Local Governments, Stamps