16 Replies Latest reply: Dec 9, 2015 6:55 AM by khalifeh RSS

    Crowdsourcing Challenge #2: Poor Financial Planning

    545477 C4D Extraordinaire

      Dear Friends, our two community members Khalifeh Al-Dayyat and ahmad abandeh /Jordan successfully participated to our first crowdsourcing challenge (LINK) and, as a result, have been acknowledged as contributors on the final paper we produced (LINK). We're now launching the second crowdsourcing challenge to capture your collective knowledge on an another common challenge for Municipal Finance: poor financial planning.

       

      A creditworthy local authority demonstrates sound management of its revenues and expenditures, but also shows an ability to plan for the future. If a local authority has problems with financial planning, this will jeopardize the authority's creditworthiness and the problem needs to be addressed as soon as possible. The attached document (we call it Solution Finder) covers a series of actions that may be considered to address financial planning problems.

       

      How to participate:


      Take a look at the Solution Finder attached to this post.  Do you have any ideas of ways to make it stronger? Can you share your experience with the problems and the suggested solutions outlined in the document? Can you recommend other solutions? Can you point to relevant references? If so, please go ahead and edit the document, using the track changes functionality, and post your edited document as a reply to this message.

       

      Note: If you want to attach a document to your reply, click on the “use advanced editor” link. Write your message in the box that appears, and click on the “Attach” link next to the paperclip in the bottom right corner. A box will then appear which allows you to choose a document to upload.

       

      All input is very welcome!

        • Re: Crowdsourcing Challenge #2: Poor Financial Planning
          khalifeh C4D Expert

          Nice to continue with you

          • Re: Crowdsourcing Challenge #2: Poor Financial Planning
            khalifeh C4D Expert

            In terms of Q.1, my municipality doesn't have a PPP project. But it is important to incorporate multi-year project/PPP delivery schedules and cost estimates into local development plans. This helps to plan accurately for the future. It also makes us aware of the revenues and the expenditures of our authority.

              • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                545477 C4D Extraordinaire

                Dear Khalifeh Al-Dayyat, good to hear from you! To clarify, please note that the Solution Finder applies to any multi-year project, not just public-private partnerships. If your municipality doesn't have a public-private partnership in the pipeline, I'm sure it has capital investment projects that span across multiple years.

                 

                How does your Municipality prioritize among different projects? Is there a formal process/cycle with standard procedures? Who evaluates projects before approving them? What information is provided at the approval stage to ensure an effective decision-making? Are there other key steps you would recommend we add to the list of action-items outlined in the Solution Finders?

                 

                Ciao,

                Joshua

                 

                Post-scriptum: based on your comment I've corrected the first question in the Solution Finder so that it's clear it applies to all projects, not just public-private partnerships. That's crowdsourcing in action!

                  • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                    khalifeh C4D Expert

                    Hi dear Jashua,

                    Thank you for keeping in touch all useful techniques and information related to municipal finance and creditworthiness. Regarding your question, in our case, lets say that we have two kinds of projects. First, investment projects which are scarce and few. Here, our staff present the technical and financial data with the feasibility study. Then, it is studied by a special committee. The mayor asks his staff to launch  public hearings to let the local community prioritize the suggested projects. The municipal council study the results and decide upon them. To be frank, no formal process is found with standard procedures but it is the policy of the mayor. Second type of projects is service projects, these projects are prioritized according to the needs of the local communities. Then, they are studied by a technical committee. Also, the local  community is involved to have the chance  to prioritize the projects and the needs. Then, the municipal council decide upon them.

                    Information needed before the approval of any project includes: financial status, expected outcome, time of implementation, local community's point of view, technical  status and the circle of priorities.

                    Really, it is a must that municipalities should apply formal process with standard procedures when choosing a project.

                                                                               

                • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                  545477 C4D Extraordinaire

                  If you're interested in the topic of this crowdsourcing exercise, Financial Planning, you may find it useful to review the presentation LINKED HERE (from the City Creditworthiness Academy delivered in Amman, Jordan, May 2015). The slide below suggests what the purpose/scope of the presentation is. You'll find there real-life examples and case-studies. But please do share how financial planning takes place in your cities, and whether the Solution Finder we launched at the beginning of this blog can be improved with contributions from your experience. This way you'll help the practitioners in this community and you'll become the co-author of our paper (now that's what I call a good plan!)

                  Financial Planning.GIF

                  • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                    khalifeh C4D Expert

                    Regarding Q.2: It is possible to have the following sources for funding (grants, loans, debts and PPPs). My municipality is now more able to ask for loans as we scheduled past debts and linked expenditures to revenues.

                    • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                      khalifeh C4D Expert

                      Regarding Q.3: Unfortunately, we don't apply having a multi-year budget. But to have more creditworthy municipality it is a must that must prepare for multi-year budgets. But there must be clear and legal procedures for such decision and should monitored by the central government.

                      • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                        khalifeh C4D Expert

                        In terms of Q.4: it is important to know that here in Jordan, most municipalities face the fact that the expenditures mostly exceed the revenues. Also, the cost of services is much more than the fees that citizens pay in accordance. So no incorporation is mostly found between life cycle costing and PPPs.

                        • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                          khalifeh C4D Expert

                          In terms of Q.5: Yes, we do that

                          • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                            khalifeh C4D Expert

                            In terms of Q.6: It is not found

                            • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                              khalifeh C4D Expert

                              Regarding Q.7: it is not found

                              • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                                khalifeh C4D Expert

                                Regarding Q.8: It is somehow used

                                • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                                  545477 C4D Extraordinaire

                                  DearKhalifeh Al-Dayyat, thank you for providing the answers to the Solution Finder as applied to your Municipality. This is a useful and very practical example!


                                  If you have a chance in the coming days, can you share with us how your Municipality prioritizes among different projects? Is there a formal process/cycle with standard procedures? Who evaluates projects before approving them? What information is provided at the approval stage to ensure an effective decision-making? Are there other key steps you would recommend we add to the list of action-items outlined in the Solution Finder?

                                   

                                  Ciao,

                                  Joshua

                                    • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                                      khalifeh C4D Expert

                                      Ok Jashua

                                      Sooner I will provide you

                                        • Re: Crowdsourcing Challenge #2: Poor Financial Planning
                                          khalifeh C4D Expert

                                          Hi dear Jashua,

                                          Thank you for keeping in touch all useful techniques and information related to municipal finance and creditworthiness. Regarding your question, in our case, lets say that we have two kinds of projects. First, investment projects which are scarce and few. Here, our staff present the technical and financial data with the feasibility study. Then, it is studied by a special committee. The mayor asks his staff to launch  public hearings to let the local community prioritize the suggested projects. The municipal council study the results and decide upon them. To be frank, no formal process is found with standard procedures but it is the policy of the mayor. Second type of projects is service projects, these projects are prioritized according to the needs of the local communities. Then, they are studied by a technical committee. Also, the local  community is involved to have the chance  to prioritize the projects and the needs. Then, the municipal council decide upon them.

                                          Information needed before the approval of any project includes: financial status, expected outcome, time of implementation, local community's point of view, technical  status and the circle of priorities.

                                          Really, it is a must that municipalities should apply formal process with standard procedures when choosing a project.