functions and fiscal resources
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Functions and Fiscal Resources. The purpose of the report is to explore options for transferring responsibilities and fiscal resources from central govern-ment to elected local councils. Objectives:. Functions and Fiscal Resources. The report has three main parts: - PowerPoint PPT PresentationTRANSCRIPT
Functions and Fiscal Resources
Objectives: The purpose of the report is to explore options for transferring responsibilities and fiscal resources from central govern-ment to elected local councils.
Functions and Fiscal Resources
The report has three main parts:
• Responsibilities and functions of local government
• Fiscal resources for local government
• Phases in implementing decentralization
Information in the report is based in part on a recently conducted survey of atolls and islands
Survey objectives
The survey of atolls and islands had four main objectives:
To generate accurate current information to support discussion of options for decentralisation policy
To build a management information system to guide decisions on transferring responsibilities and allocating central government funds to local councils in the future
To provide data to determine criteria and formulae for calculating block grants
To gather baseline data to be used to monitor and evaluate the impact of legislation on decentralization
Returns
Details Number
Total Number of inhabited islands in the country 196
Number of returns received from islands 109
Total usable returns 66
Infrastructure, facilities and services 66
Utilities and Enterprises 64
Local revenue 52
Proposed new local revenue 30
Shared revenue 13
New shared revenue 12
Sectoral Budgets and spending 24
Functions and responsibilities
Part One: Functions and responsibilities of local administrations for the delivery of public services
Functions and responsibilities
Current and proposed activities of local administrations:
Infrastructure Facilities Services Utilities Public enterprises
Section A: Existing Public Infrastructure
TABLE A1: INFRASTRUCTURE
North South Total
Number %
Number %
Number %
Roads paved 0 0% 1 1% 1 1%
Roads unpaved 28 41% 16 24% 44 65%
Bridges 16 24% 11 16% 27 40%
Street lighting 42 62% 21 31% 63 93%
Storm water drains 3 4% 0 0% 3 4%
Landing stage 1 1% 0 0% 1 1%
Harbor 26 38% 14 21% 40 59%
Number of islands providing information 68
Section A: Existing Public Infrastructure
TABLE A1: INFRASTRUCTURE
North South Total
Number % Number % Number %
Roads paved 0 0% 1 1% 1 1%
Roads unpaved 28 41% 16 24% 44 65%
Bridges 16 24% 11 16% 27 40%
Street lighting 42 62% 21 31% 63 93%
Storm water drains 3 4% 0 0% 3 4%
Landing stage 1 1% 0 0% 1 1%
Harbor 26 38% 14 21% 40 59%
Number of islands providing information 68
Section A: Existing facilities
TABLE A2: EXISTING FACILITIES
North South Total
Number % Number % Number %
Market place 5 7% 1 1% 6 9%
Community center 8 12% 6 9% 14 21%
Meeting hall 3 4% 0 0% 3 4%
Library 1 1% 0 0% 1 1%
Mosque 44 65% 21 31% 65 96%
Recreation facility 10 15% 0 0% 10 15%
Other (specify) 0 0% 0 0% 0 0%
Number of islands providing information 68
Section A: Existing Services
68Number of islands providing information
0%00%00%0Other if mentioned often enough
21%1410%710%7Loan schemes
16%119%67%5Emergency support
1%10%01%1Skill training
12%86%46%4Literacy programs
22%1513%99%6Pre-schools
76%5222%1554%37Street cleaning
%Number %Number%Number
TotalSouthNorth
TABLE A3: EXISTING SERVICES
Section A: New Public Infrastructure
TABLE A4: NEW INFRASTRUCTURE
North South Total
Number % Number % Number %
New Roads paved 0 0% 1 2% 1 2%
New Roads unpaved 0 0% 0 0% 0 0%
New Bridges 0 0% 0 0% 0 0%
New Street lighting 1 2% 0 0% 1 2%
New Storm water drains 0 0% 0 0% 0 0%
New Landing stage 2 3% 0 0% 2 3%
New Harbor 4 6% 3 5% 7 11%
New slipway 2 3% 0 0% 2 3%
Number of islands providing information 66
Section A: New Facilities
A5: New Facilities
North South Total
Number % Number % Number %
New Market place 2 3% 3 4% 5 7%
New Community center 3 4% 1 1% 4 6%
New Meeting hall 1 1% 0 0% 1 1%
New Library 2 3% 0 0% 2 3%
New Mosque 0 0% 0 0% 0 0%
New Recreation facility 3 4% 3 4% 6 9%
Other (specify) 1 1% 0 0% 1 1%
Number of islands providing information 68
Section B: Existing Public Utilities
68Number of islands providing information
21%143%218%12Solid waste disposal
10%70%010%7Solid waste collection
6%40%06%4Sewerage
43%299%634%23Water distribution
90%6131%2159%40Electricity
%Number %Number %Number
TotalSouth North
Source: MOAD Survey 2007
Functions – Public Utilities
TABLE B1: PUBLIC UTILITIES
Section B: Existing Public Business Enterprises
68 Number of islands providing information
7%53%24%3Sea transport
32%2218%1215%10Pharmacy
12%81%110%7Café / restaurant
15%106%49%6Guest house
TotalSouth North
Source: MOAD Survey 2007
Functions – Business enterprises
TABLE B2: BUSINESS ENTERPRISES
Section B: New Public Utilities
68 Number of islands providing information
4%30%04%3New Other (specify)
15%106%49%6New Solid waste disposal
10%74%36%4New Solid waste collection
37%2513%924%16New Sewerage
26%1810%716%11New Water distribution
13%91%112%8New Electricity
TotalSouth North
Source: MOAD Survey 2007
Functions - New utilities
TABLE B3: NEW PUBLIC UTILITIES
Section B: New Business Enterprises
68 Number of islands providing information
7%50%07%5New fuel supply
16%116%410%7New retail shops
28%196%422%15New Sea transport
16%114%312%8New Pharmacy
7%51%16%4New Café / restaurant
38%2610%728%19New Guest house
TotalSouth North
Source: MOAD Survey 2007
Proposals - New Business Enterprises
TABLE B4: NEW BUSINESS ENTERPRISES
Section B: Profitability of Utilities and Enterprises
TABLE B5: PROFITABILITY OF UTILITIES AND ENTERPRISES
North South Total
Public Utilities
Number 45 13 58
Profitable 25 7 32
% profitable 56% 54% 55%
Business Enterprises
Number 12 4 16
Profitable 9 1 10
% profitable 75% 25% 63%
Part Two: Fiscal resources for local government to finance the delivery of public services
Fiscal resources
Fiscal resources
Three main types of revenue:
Revenue generated from local sources
Revenue shared between central and local government
Revenue (grants) transferred from the centre to local government
Section C: Current revenue from local sources
TABLE C1: CURRENT SOURCES OF LOCALLY GENERATED REVENUE
Number of islands providing informatio
n Taxes Fees LicensesUser
charges
Rents for land and property
Business profits
Other significant
local revenues
North total 35Number of items charged 4 1 17 31 22 8 5Number of islands charging 3 1 17 27 15 6 4Proportion of islands charging 9% 3% 49% 77% 43% 17% 11%
16Number of items charged 0 5 8 17 9 4 7Number of islands charging 0 3 8 14 6 4 4Proportion of islands charging 0% 19% 50% 88% 38% 25% 25%
51Number of items charged 4 6 25 48 31 12 12Number of islands charging 3 4 25 41 21 10 8Proportion of islands charging 6% 8% 49% 80% 41% 20% 16%
South
Total
Section D: Potential new revenue from local sources
Revenue source
Basis Assumptions Tax or Charge
(Rf)
Revenue per cap
(Rf)
Vari-ance
Max (Rf)
Min (Rf)
User charges
Water Litres consumed
Average 100 litres per day per property
0.01 65 17% 76 54
Solid waste
All properties
Flat fee per month Rf
10 31 37% 42 20
Market place
Stall holders
Weekly markets
10 13 43% 19 7
Harbor fee
Vessels Flat fee per month Rf
100 25 64% 41 9
Section D: Potential new revenue from local sources
Table D2: Estimates of potential revenue to be derived from new sources
Revenue source
Basis Assumptions Tax or Charge
(Rf)
Revenue per cap
(Rf)
Variance Max (Rf)
Min (Rf)
Sales tax Shops sales
Turnover per day: Rf 1000
1% 80 32% 106 55
Property fee
All prop-erties
Flat fee per month Rf
100 303 26% 382 223
Section E: Current revenue sharing with central government
Table E1: Composition of central revenues shared with atolls
Source of revenue Rf % total
Rent from unihabited islands 386,797 3%
Industrial leases from inhabited islands 4,806,549 39%
Male properties 5,984,784 49%
Boat fees 993,325 8%
Total 12,171,455 100%
Table E2: Distribution of shared revenues among atolls
Atoll
Amount shared revenues 2006 (Rf) % Total Population 2006 Per capita ratio
11 Vaavu atoll 440,790 4% 1,504 4.43
8 Kaafu atoll 1,722,380 14% 9,475 2.75
14 Dhaalu atoll 425,030 3% 4,671 1.37
20 Seenu atoll 1,580,983 13% 17,762 1.34
9 Alif alif atoll 429,118 4% 4,841 1.34
12 Meemu atoll 383,810 3% 4,654 1.25
13 Faafu atoll 284,819 2% 3,624 1.19
15 Thaa atoll 605,397 5% 8,536 1.07
10 Alif Dhaalu atoll 459,817 4% 6,906 1.01
6 Baa atoll 590,045 5% 8,876 1.00
4 Noonu atoll 621,122 5% 10,080 0.93
7 Lhaviyani atoll 474,050 4% 8,226 0.87
3 Shaviyani atoll 659,984 5% 11,814 0.84
18 Gaafu dhaalu atoll 609,916 5% 11,023 0.84
17 Gaafu alif atoll 433,066 4% 7,977 0.82
19 Gnaviyani atoll 341,652 3% 7,528 0.69
5 Raa atoll 586,299 5% 14,639 0.61
1 Haa alif Atoll 518,603 4% 13,272 0.59
2 Haa dhaalu atoll 624,672 5% 16,439 0.57
16 Laamu atoll 379,901 3% 12,018 0.48
Total 12,171,455 100% 183,865 1.00
Section F: Potential changes and additions to revenue shared with
central government
TABLE F1: PROPOSALS FOR REVENUE SHARING
Number of islands
providing information
Hotel Tax
Hotel fee
Vehicle license
Boat licenses
Commercial premises
Land for industry
Land for commerce
6
4 5 6 5 2 3 4
67% 83% 100% 83% 33% 50% 67%
7
4 4 6 7 5 3 3
57% 57% 86% 100% 71% 43% 43%
13
8 9 12 12 7 6 7
62% 69% 92% 92% 54% 46% 54%
Number of islands proposing
Proportion of islands proposing
Number of islands proposing
Proportion of islands proposing
Number of islands proposing
Proportion of islands proposing
North total
South
Total
Capital Investment
Main sources of funds for investment:
From locally generated resources (contributions)
Through MOAD for local administrations From the PSIP through MOAD (zero for all
islands since at least 2001) From donor projects Potentially through block grants for
investment puposes
Section G: Capital Investment
Table G1: Investment from MOAD budget 2004 - 2007
Department/section 2004 2005 2006 2007
Ministry of Atolls Development
9.13 Roads and Ports, Water and Sanitation systems 27,796,287 99,999,559 13,723,970 1,012,498
Island Development Expenditures
9.13 Roads and Ports, Water and Sanitation systems 1,065,824 130,300,000
Total
9.13 Roads, Ports, Water, salination 28,862,111 99,999,559 144,023,970 1,012,498
11.02 Equity capital to public enterprises
11.04 Capital contribution to profit oriented public agencies
11.09 Other economic development
Section G: Capital Investment
Table G2: Recurrent and Capital Expenditure 2006
Item Recurrent Capital Total
Amount Rf 171,595,076 6,332,007 177,927,083
Percent total 96% 4% 100%
Section G: Capital Investment
Table G3: Breakdown of Capital Expenditures 2006
Item
9.01 9.03 9.12 9.13
Total Furniture Equipment Communications Infrastructure
Amount (Rf) 1,260,327 3,794,342 1,080,569 0 6,135,238
Percent 21% 62% 18% 0% 100%
Block Grants for investment purposes
Main issues in determining block grants: What is the scope of investment activities
to be funded? What resources are available? Are they sufficient to provide funds for
every island every year? Should central government allocate block
grants to atolls or islands? What criteria should be considered in
allocating block grants? What formula should be applied?
Block grants
Table X1: Block grants
Criteria Variable Source
1 Population Population Statistics Office
2 Land area Land area (hectares) Statistics Office
3 Accessibility Distance to Male Compute from maps
4 Level of development Composite Human Vulner ability Index
VPA2, Table 15, col 6: Equal weights 2004
5 Fiscal capacity Shared revenues Inland Revenue
Table X2: Summary of indicators for atolls
Indicator
Popu-lation 2007
Land Area
Distance to
Male
(hrs)
Human Vulner-ability
Fiscal capacity
Unit % total % total Index % total Index % total Index % total
Atoll
1 Haa alif Atoll 7% 12% 1.38 0.07 3.1 5.0% 1.69 7.8%
2 Haa dhaalu atoll 9% 15% 1.24 0.06 2.9 4.7% 1.74 8.0%
3 Shaviyani atoll 6% 7% 0.99 0.05 3.8 6.1% 1.18 5.4%
4 Noonu atoll 5% 7% 0.80 0.04 3.4 5.5% 1.07 4.9%
5 Raa atoll 8% 5% 0.78 0.04 3.8 6.1% 1.65 7.6%
6 Baa atoll 5% 3% 0.51 0.03 3.2 5.1% 1.00 4.6%
7 Lhaviyani atoll 4% 1% 0.64 0.03 3.1 5.0% 1.15 5.3%
8 Kaafu atoll 5% 4% 0.12 0.01 3.0 4.8% 0.36 1.7%
9 Alif alif atoll 3% 2% 0.26 0.01 3.3 5.3% 0.75 3.4%
10 Alif Dhaalu atoll 4% 2% 0.35 0.02 3.2 5.1% 0.99 4.6%
11 Vaavu atoll 1% 0% 0.36 0.02 3.0 4.8% 0.23 1.0%
12 Meemu atoll 3% 2% 0.64 0.03 3.1 5.0% 0.80 3.7%
13 Faafu atoll 2% 1% 0.65 0.03 3.4 5.5% 0.84 3.9%
14 Dhaalu atoll 3% 1% 0.82 0.04 3.4 5.5% 0.73 3.3%
15 Thaa atoll 5% 3% 1.03 0.05 3.2 5.1% 0.93 4.3%
16 Laamu atoll 7% 12% 1.18 0.06 3.5 5.6% 2.09 9.6%
17 Gaafu alif atoll 4% 4% 1.73 0.09 3.3 5.3% 1.22 5.6%
18 Gaafu dhaalu atoll 6% 5% 1.85 0.09 2.7 4.3% 1.20 5.5%
19 Gnaviyani atoll 4% 4% 2.24 0.11 1.6 2.6% 1.46 6.7%
20 Seenu atoll 10% 9% 2.42 0.12 2.3 3.7% 0.74 3.4%
Total 100% 100% 20.00 1.00 62.3 100% 21.84 100%
T able X3: T he bloc k g rant model S cenario: B as e plus population
P ool of resources : Rf 1,000,000
C riteria: BasePopulation
share Land Area HVIFiscal
capacity Total
Per capita
amountWeights : 0.50 0.50 0.00 0.00 0.00 0.00
Atoll R f R f R f R f1 Haa alif atoll 25,000 13,165 0 0 0 0 38,165 7.882 Haa dhaalu atoll 25,000 18,780 0 0 0 0 43,780 6.34
etcetc
19 Gnaviyani atoll 25,000 25,766 0 0 0 0 50,766 5.3620 Seenu atoll 25,000 21,693 0 0 0 0 46,693 5.85
Total 500,000 500,000 0 0 0 0 1,000,000Average per cap national 5.44Average per cap among atolls 6.54Standard deviation 3.36SD as % average 51%Maximum 9.89Minimum 3.18
Table X4: Block grant scenariosPool of resources: Rf 1,000,000 Nat'l Atoll SD as Avge 4
average average % avge Max Min low HVI
ScenarioBase
amount Popul-ation Area Access HVI
Fiscal Cap'y Rf Rf % Rf Rf Rf
Base amount only 1.00 0.00 0.00 0.00 0.00 0.00 5.44 7.64 88% 14.35 0.93 4.26Base + population
50 / 50 0.50 0.50 0.00 0.00 0.00 0.00 5.44 6.54 51% 9.89 3.18 4.8525 / 75 0.25 0.75 0.00 0.00 0.00 0.00 5.44 5.99 28% 7.67 4.31 5.14
Base, pop, area10 / 80 / 10 0.10 0.80 0.10 0.00 0.00 0.00 5.44 5.60 11% 6.22 4.99 5.36
Base, pop, access10 / 80 / 10 0.10 0.80 0.00 0.10 0.00 0.00 5.44 5.72 16% 6.62 4.82 5.6210 / 70 / 20 0.10 0.70 0.00 0.20 0.00 0.00 5.44 5.78 21% 6.98 4.58 5.93
Base, pop, HVI10 / 80 / 10 0.10 0.80 0.00 0.00 0.10 0.00 5.44 5.88 23% 7.21 4.55 5.0810 / 60 / 30 0.10 0.60 0.00 0.00 0.30 0.00 5.44 6.32 42% 8.97 3.66 4.61
Base, pop, FC10 / 80 / 10 0.10 0.80 0.00 0.00 0.00 0.10 5.44 5.72 14% 6.50 4.94 5.2910 / 70 / 20 0.10 0.70 0.00 0.00 0.00 0.20 5.44 5.78 16% 6.70 4.85 5.26
Base + 4Pop 60, others 10 0.10 0.60 0.00 0.10 0.10 0.10 5.44 6.00 27% 7.63 4.37 5.36
Lowest HVIP 50, Acc 20, FC 20 0.10 0.50 0.00 0.20 0.00 0.20 5.44 5.90 25% 7.36 4.43 5.87
Weights for each criteria
Per capita revenue
Thank You