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1
LOCAL
SELF-GOVERNMENT
IN ARMENIA
(2017)
Book 10
Edited by Vahram Shahbazyan,
Ph.D. Technical Sciences
Yerevan 2018
FOA
2
This book is published by the support of
American people through the United States
Agency for International Development (USAID).
The contents of this publication are the sole
responsibility of the authors and do not necessarily
reflect the views of USAID and U.S. Government.
Dedicated to the 100th Anniversary of the Proclamation of the Republic of Armenia and
the 20th Anniversary of the Communities Finance Officers Association.
Local Self-government in Armenia (2017),
Book 10, edited by Vahram Shahbazyan, Yerevan, 2018, p. 264
This book contains 2017 Armenia local self-government monitoring report.
This book is intended for policy and decision makers in the area of decentralization and local self-
governance, representatives of local government bodies, international and non-government
organizations and larger groups of readers interested in the field.
© Communities Finance Officers Association
3
CONTENTS
LIST OF ACRONYMS ..................................................................................................... 4
LIST OF TABLES ........................................................................................................... 5
LIST OF FIGURES ......................................................................................................... 6
PREFACE ..................................................................................................................... 7
1. LEGAL AND PROGRAMMATIC ASSESSMENT OF LOCAL SELF-GOVERNMENT REFORMS .... 9
1.1. LEGAL ASSESSMENT OF LOCAL SELF-GOVERNMENT REFORMS .................................................................. 9 1.2. PROGRAMMATIC ASSESSMENT OF LOCAL SELF-GOVERNMENT REFORMS ................................................ 15 1.3. PERFORMANCE OF ARMENIA’S INTERNATIONAL COMMITMENTS IN LOCAL SELF-GOVERNMENT ............ 17
2. ADMINISTRATIVE-TERRITORIAL DIVISION AND INTER-MUNICIPAL COOPERATION ...... 18
2.1. ADMINISTRATIVE-TERRITORIAL DIVISION ............................................................................................... 20 2.2. INTER-MUNICIPAL COOPERATION ............................................................................................................. 25
3. FORMATION, POWERS, AND ACTIVITIES OF LSGS, PARTICIPATION OF
CIVIL SOCIETY IN LOCAL GOVERNANCE ...................................................................... 28
3.1 FORMATION, POWERS, AND ACTIVITIES OF LSGS ..................................................................................... 28 3.2. PARTICIPATION OF CIVIL SOCIETY IN LOCAL GOVERNANCE .................................................................... 33
4. MUNICIPAL ASSETS, DEVELOPMENT PROGRAMS AND FINANCIAL AUTONOMY ........... 35
4.1. MUNICIPAL ASSETS ................................................................................................................................... 35 4.2. MUNICIPAL DEVELOPMENT PLANS AND BUDGETING PROCESSES .............................................................. 37 4.3. MUNICIPAL BUDGET REVENUES ............................................................................................................... 38 4.4. DEBT MANAGEMENT .................................................................................................................................. 43 4.5 FINANCIAL ACCOUNTABILITY ................................................................................................................... 43
5. RELEVANCE OF LSG RESPONSIBILITIES AND MUNICIPAL FINANCES ............................ 44
6. ADEQUACY OF ADMINISTRATIVE STRUCTURE, HUMAN AND INFORMATION
RESOURCES TO MUNICIPAL ISSUES, INTERNATIONAL ASSISTANCE ............................... 55
6.1 GENERAL CAPACITIES OF LSGS AND MUNICIPAL STAFF ............................................................................55 6.2 MUNICIPAL SERVICE ................................................................................................................................. 58 6.3 TRAINING OF MUNICIPAL SERVANTS ......................................................................................................... 61 6.4 INTERNATIONAL ASSISTANCE .................................................................................................................. 62
7. DELIVERY OF PUBLIC SERVICES .............................................................................. 67
7.1 PUBLIC SERVICES DELIVERED BY MUNICIPALITIES .....................................................................................67 7.2. MANAGEMENT OF MUNICIPAL SERVICES .................................................................................................. 78
8. RESULTS OF THE LOCAL GOVERNANCE ANNUAL ASSESSMENT
(LG INDEX FOR 2015, 2016 AND 2017) ........................................................................... 81
CONCLUSIONS AND RECOMMENDATIONS ..................................................................... 84
CONCLUSIONS ................................................................................................................................................. 84 RECOMMENDATIONS ....................................................................................................................................... 88
BIBLIOGRAPHY.......................................................................................................... 91
APPENDIX ................................................................................................................. 95
4
List of Acronyms
ARF Armenian Revolutionary Federation
CAA Communities Association of Armenia
CFOA Communities Finance Officers Association
CoE Council of Europe
CRRC Caucasus Research Resource Center
CSO Citizen service office
ECLSG European Charter of Local Self-Government
ENP European Neighborhood Policy
EU European Union
FYMDP Five-year municipal development plan
GDP Gross domestic product
IMU Inter-municipal union
ISDTC Information Systems Development and Training Center
LSG Local Self-government
LSGBs Local self-government bodies
LTD Limited liability company
MMIS Municipal management information systems
MNCO Municipal non-commercial organization
MTAD Ministry of Territorial Administration and Development
NA National Assembly
PAP Prosperous Armenia Party
PSEI Pre-school educational institutions
RA Republic of Armenia
RPA Republican Party of Armenia
SME Small and medium enterprises
USA United States of America
USAID United States Agency for International Development
5
List of Tables
Table 1. Distribution of land stock by land ownership types, as of July 1, 2017 ......................................... 18
Table 2. Administrative-territorial division and population of Republic of Armenia
(by January 1, 2017) .......................................................................................................................... 19
Table 3. Administrative-territorial reforms as of January 1, 2018 ................................................................ 21
Table 4. Number of elections of LSG bodies in 2017, by marzes ................................................................. 28
Table 5. Political affiliation of directly elected mayors in 2017 ................................................................... 29
Table 6. Quantitative data of mayor’s powers by individual types and sectors
(as of December 31, 2017) ................................................................................................................. 32
Table 7. Municipal expenditures on non-financial assets (including Yerevan), 2015-2017 ........................36
Table 8. Receipts on sales of non-financial assets of municipalities (including Yerevan),
2015–2017 (in mln. AMD) ................................................................................................................. 37
Table 9. Types of municipal budget revenues and their shares in total revenues, 2015-2017 .................. 38
Table 10. Share of Yerevan budget revenues in total revenues of
municipal budgets of Armenia in 2017 .......................................................................................... 40
Table 11. Official grants as revenues of municipal budgets in 2015-2017 ..................................................... 41
Table 12. Fund budget revenues of the RA municipalities and the share of Yerevan fund budget
revenues in 2017 ................................................................................................................................42
Table 13. Shares of local budget expenditures in total public spending and GDP (2017 data)
in Armenia and Member States of the European Union .............................................................. 44
Table 14. Annual approved, adjusted plans of total revenues, expenditures, surplus/deficit and actual
execution of municipal budgets of Armenia in 2017 (in thousand drams) ................................. 45
Table 15. Per capita revenues and expenditures of municipal budgets of Armenia in 2013-2017
(in AMD and USD)* ......................................................................................................................... 46
Table 16. Actual budget expenditures of the RA municipalities (including and excluding Yerevan)
and Yerevan municipality, according to functional classification, 2017 .................................... 48
Table 17. Actual budget expenditures of the RA municipalities (including and excluding Yerevan) and
Yerevan municipality in 2017, according to economic classification of budget expenditures .. 51
Table 18. Indicators on education level of mayors by marzes, as of December 31, 2017 ......................... 56
Table 19. Gender distribution in local self-government bodies and municipal staffs
as of December 1, 2017 .................................................................................................................... 57
Table 20. Gender distribution in local self-government bodies and staffs of Yerevan municipality and
administrative districts, as of December 31, 2016 and 2017 ......................................................... 58
Table 21. Number of municipal service positions as of May 4, 2017 ........................................................... 59
Table 22. Number of appraised municipal servants as well as announced and held competitions for open
positions in 2017 as of December 31, 2017 .................................................................................... 60
Table 23. The ratio of municipal service positions in administrative staffs to the number of population
in Yerevan and marzes, as of May 4, 2017 .................................................................................... 60
Table 24. Number of trained municipal servants ........................................................................................... 61
6
Table 25. Actual expenditure on waste disposal services and collected fees in RA municipalities, 2017 69
Table 26. Brief information on landfills registered on the territory of Armenia ....................................... 70
Table 27. Brief information on the service areas of "Veolia Jur" CJSC in the Republic of Armenia ........ 72
Table 28. Sewage network length by RA marzes and Yerevan, as of the end of 2016 .............................. 73
Table 29. Number of musical, arts and painting schools, youth creative centers, by RA marzes and
Yerevan, in 2016/2017 academic year ............................................................................................76
Table 30. Medical institutions providing primary healthcare service (with the exception of nursing-
obstetrics centers) by types 2015 .................................................................................................... 77
Table 31. Actual budget expenditures of RA municipalities and Yerevan, by economic classification
(both including and excluding Yerevan), 2017 ..............................................................................79
List of Figures
Figure 1. Level of urbanization in Armenia, EU countries and that of comparable countries
in Eastern European .........................................................................................................................24
Figure 2. Level of urbanization and GDP per capita (as of 2017) .................................................................24
Figure 3. Dynamics of municipal budget revenues, 2000, 2010-2017 (million AMD) ................................39
Figure 4. Types of RA municipal budget revenues and their shares in total revenues in 2017 ................ 41
Figure 5. Per capita actual revenues of the RA municipal budgets in 2013-2017
(in AMD and USD) ........................................................................................................................... 47
Figure 6. Per capita actual expenditures of the RA municipal budgets in 2013-2017
(in AMD and USD) .......................................................................................................................... 48
Figure 7. Shares of actual budget expenditures of the RA municipalities (including Yerevan)
in total municipal spending, 2017 (by functional classification) ................................................. 50
Figure 8. Shares of actual expenditures in the 2017 municipal budgets (excluding Yerevan)
in total spending (by functional classification) .............................................................................. 51
Figure 9. Shares of current and capital expenditures of municipal budgets of Armenia
(including Yerevan) in total spending for 2013-2017, % ................................................................ 52
Figure 10. Shares of current and capital expenditures of Yerevan municipal budget
in total spending for 2013-2017, % ................................................................................................... 53
Figure 11. Shares of current and capital expenditures of municipal budgets of Armenia
(excluding Yerevan) in total spending for 2013-2017, % ............................................................... 53
7
Preface
Communities Finance Officers Association (CFOA) has been monitoring the state of affairs in local self-governance sector in Armenia since the establishment of local self-government. During this time period, CFOA issued a series of respective reports. Since 2004, CFOA has published nine books, each including reports for one or more years with analyses and assessments of the local self-government sector, as well as conclusions, and a number of follow-up recommendations.
The monitoring and assessment of the local self-government system is conducted according to original methodology developed by the CFOA expert team. The analysis and assessment of the reforms is based on the implementation of the provisions set out in the national legislation, Government of Armenia programs and international commitments regarding the local self-government system, performance of local governments (LGs), calculation and assessment of financial and non-financial indicators characterizing the current state of local self-government system.
The content of the nine previous books on “Local Self-Government in Armenia” was compiled through the study and analysis in 7 sub-areas of local governance, conducted by CFOA and independent experts. Throughout all reports each sub-area is presented as a separate section of the report. According to the methodology, all the sections were compiled in a single format and included the assessment of the following sub-areas: legislation and programmatic activities, administrative-territorial division and inter-municipal cooperation, municipal assets, development programs and municipal finance, local government elections, powers and activities of local authorities, local democracy, administrative structures, municipal management, and (public) service delivery.
It has been possible to maintain the highest academic level and clarity of the annual reports in recent years, ensuring wide public access to these reports. The audience included public officials and their staffs, local and international organizations in local self-government sector, independent experts, university students and faculty. Over the past years, a cohort of dedicated readers has been formed, and every year the book is in high demand.
While drafting the current annual report on the state of local self-government, we persevered to preserve the longstanding best traditions of many years and improve the quality of the report, enriching its content and incorporating the most up-to-date information on local self-government reforms.
This book is the 10th jubilee volume on local self-government reforms drafted by CFOA. It covers the reforms carried out in 2017, identifies the key issues in local self-government sector, draws certain conclusions and offers recommendations for the solution of these problems and the continuation of the reforms.
Based on the expert analyses during the preparation of this annual report and the methodology1 developed for annual quantitative assessment of local self-government system of Armenia in 2017, local self-government index (LG index) for 2017 was calculated as well. The latter enables to track the dynamics of the local self-government reform processes in Armenia for the last three years and compare progress across the years.
According to the mentioned methodology, the calculation of the composite LG index is based on five selected areas (directions), 20 functions, and 52 indicators in local governance sector. This report provides summary on the results of assessment of the local self-government system in Armenia and calculation of LG index for 2015-2017.
On behalf of the authors of this report, I would like to express my gratitude to Arthur Drampyan, USAID Project Management/Decentralization Program Specialist and Vahan Movsisyan, CFOA Chairman and Chief of Party of the Civic Engagement in Local Governance Program (CELoG) funded by USAID, for their extensive support and valuable comments on this report.
Vahram Shahbazyan
1 Local Government Annual Index (LG Index for 2015 and 2016), book 1, Yerevan 2017
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REPORT
LOCAL SELF-GOVERNMENT IN
ARMENIA
(2017)
This report has been produced by members of CFOA expert
group:
Vahram Shahbazyan (expert group leader), Narine Aleksanyan,
Davit Margaryan, Knarik Ayvazova (Arabyan), Levon Tumanyan,
Rouben Hayrapetyan and Hasmik Grigoryan
9
1. Legal and programmatic assessment of Local Self-government Reforms
1.1. Legal Assessment of Local Self-government Reforms
Reflection of Constitutional Provisions in the Legislation
After the Constitutional amendments of December 6, 2015, with a view to comply the laws
regulating local self-government relations with the norms of the Constitution of the Republic of
Armenia, the law on making amendments in the RA Law on Local Self-government was adopted
on December 6, 2016, which, however, did not fully reflect the Constitutional norms. During
2017, there were still some discrepancies between the legislative and Constitutional norms
conditioned by the lack of respective laws or improper implementation of legislative amendments.
The study of legislative acts adopted in local self-government field and legislative
amendments made in them during 2017 shows that the legislative regulations on some issues were
not made in accordance with the Constitution, in particular:
1. While adopting the respective law on the merger or division of municipalities by the
National Assembly, the right of municipalities to be heard (Article 190 of the RA
Constitution) has not received its subsequent fixation at the legislative level. This legal gap
is, in particular, conditioned by the fact that after the 2015 Constitutional amendments
entered into force, the RA National Assembly has annulled the norm on setting local
referendum (paragraph 2 part 1 of Article 7) through the RA law 238-N on making changes
in the RA Law on Local Referendum adopted on 16.12.2016 and hasn’t adopted any other
norm instead of that. In case of change of the borders of the municipalities, the legal relations
in connection with listening to the opinion of municipalities are not legally regulated at the
moment, therefore, the ways, mechanisms, procedures of implementation of municipalities’
being heard, as well as the duties of the respective bodies on this matter are not defined by
law.
The European Charter of Local Self-Government2 considers referendum (Article 5) as the
best way of consultation with municipalities since local referendums are best suited to the
objectives3 of such consultations.
According to the explanatory report of the European Charter of Local Self-Government
(textbox 1), the other forms of consultation should be used by the member states in case there
is no legislative base for holding mandatory local referendum on the changes of the borders
of municipalities.
Under the circumstances of the aforementioned legal gap, “limited interpretation” was given
to the Constitutional norm, which led to the formation of non-democratic legal practice to
consider the right to listen to the opinion of the municipalities just as a “right to participate
in parliamentary hearings” or a “right to participate in the plenary session of the National
Assembly”, which is inconsistent with the rule of law practices and violates the international
commitments of the Republic of Armenia.
2 https://www.coe.int/en/web/conventions/full-list/-/conventions/rms/090000168007a088 3 https://rm.coe.int/16800ca437
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Textbox 1. The right of municipalities to be heard when changing their administrative borders
The right of municipalities to be heard when changing their administrative borders means that while making any change of borders of the local self-government unit (merger or division of municipalities, inclusion of a municipality’s administrative territory in the administrative territory
of another), the state should in advance, directly or indirectly consult with that municipality/municipalities and/or the local self-government bodies and take into account their opinion regarding the change of the administrative borders. Moreover, the concerned municipalities should participate in both the preparation and the main decision-making stages of
the process of changing the municipalities’ administrative borders and have a real opportunity to express their opinion and make it heard (See the explanatory report to the European Charter of Local Self-Government, Article 4, paragraph 6, https://rm.coe.int/16800ca437).
The consultation with the respective municipalities in the process of change of the borders of the local self-government unit should be held in advance. It should ensure the real participation
of the concerned municipalities to the process, starting from the preparation stage up to the main
decision-making phase (See Recommendation Rec(2004)12 on the processes of reform of boundaries and/or structure of local and regional authorities, https://search.coe.int/cm/Pages/result_details.aspx?ObjectID=09000016805dbeda).
“Opinion of municipality” means the consent or disagreement of the municipality population to the expected change of the municipality borders. Moreover, the obligation to
“listen” to the opinion of the respective municipality cannot be formal. The obligation to listen to the opinion of the municipality can be considered “formal” only
when the municipality is not provided with a real opportunity to make its opinion heard. The legal practice formed at the second and third stages of the amalgamation of the RA municipalities
can be called as “formal realization” of the obligation to listen to the municipality’s opinion, when the RA government hasn’t discovered the opinion of the respective municipality through any legal mechanism (directly or indirectly), and based on this, the municipality opinion didn’t receive its expression at any formal level. As a result, the obligation to “listen to the opinion of the respective municipality” by the legislator has not been fulfilled. The exercise of the municipality’s right to be heard can be formal also in case when the government, having legal mechanisms to reveal the opinion of the municipalities, nevertheless, doesn’t take into account the negative attitude discovered as a result of it, like it happened during the first stage of the amalgamation of the RA municipalities.
It’s worth to mention that local referendums (RA government 19.03.2015, N 269, 270 and 271 decisions on setting local referendum in 22 municipalities of Lori, Tavush and Syunik marzes (administrative-territorial units) respectively, https://www.e-gov.am/gov-
decrees/calendar/2015/03/page/6/) were held on 17 May 2015 at the first stage of the amalgamation of the RA municipalities, and according to their results (http://www.elections.am/electionsview/type-8/), 6 (Atan, Ahnidzor, Shamut (Lori), Haghartsin, Teghut, Gosh (Tavush)) out of 22 municipalities opposed the change of the municipal borders. However, the negative opinion of these municipalities was not taken into account by the National Assembly while making a decision on the amalgamation of municipalities through making a respective amendment in the Law on Administrative and Territorial Division of the Republic of Armenia. At the second stage in 2016, 118 municipalities were amalgamated, and 15 multi-settlement municipalities were formed. At the third stage in 2017, 325 municipalities were amalgamated, and 34 multi-settlement municipalities were formed. A total of 465 municipalities were amalgamated by the three stages forming 52 new multi-settlement municipalities.
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2. In order to implement Article 189 (Inter-municipal unions) of the RA Constitution, the
RA government has developed and submitted to the RA National Assembly the draft law on
Inter-Municipal Unions in 20174. The analysis of the respective draft law shows that it does
not fully reflect inter-municipal cooperation institute in conceptual terms, as the right
to inter-municipal cooperation (textbox 2) is broader than the right to create inter-municipal
unions. The latter is only one manifestation of the inter-municipal cooperation, therefore, it’s
necessary to expand the subject of law by showing more conceptual approach to it and also
defining other forms of inter-municipal cooperation5. Such conceptual approach will enable
to regulate comprehensively the field of legal relations of the inter-municipal cooperation in
line with international standards.
As for the possible contradiction of such approach to Article 189 of the RA Constitution, it’s
worth mentioning that it regulates the relations in connection with creating an inter-
municipal union and defines the organizational-legal form of the inter-municipal unions
(public-law legal entity), meanwhile, no Constitutional ban for the implementation of other
forms of inter-municipal cooperation is defined. The Constitution has left these issues to the
regulation of the legislator and has defined norms only over one form of inter-municipal
cooperation – the inter-municipal unions. In fact, the RA Law on Inter-Municipal Unions is
in accordance with the RA Constitution, but due to the limited interpretation of the
constitutional-legal norm, the subject of law doesn’t fully reflect the demands of the European
Charter of Local Self-Government restricting the municipalities’ right to be merged.
3. According to part 2 of Article 180 of the RA Constitution, the municipality is a legal entity
under public law. According to part 3 of Article 189 of the RA Constitution, the inter-
municipal union is a legal entity under public law.
Following Constitutional amendments of 2015, the “legal entity under public law” concept
has not found its further concretization in either civic-legal laws, or the laws regulating local
self-government sector. Moreover, the draft RA law on Inter-Municipal Unions also included
this concept, but its content and peculiarities have not been defined either.
4. The provision that “the municipal mayor is responsible to the avagani (municipal council)”
defined by part 4 of Article 182 of the RA Constitution has not been fully exercised at the
legislative level. The aforementioned constitutional-legal norm is partially reflected in the
legal norms on expressing the vote of no confidence by the avagani to the mayors elected
indirectly (in particular, Yerevan, Vanadzor and Gyumri cities)6. In fact, according to the
sectorial legislative acts, there is no political liability for the municipal mayors elected by
indirect election procedure. It’s worth stating that part 4 of Article 182 of the RA Constitution
doesn’t rule out the legislative regulation on dismissal of the mayor by the residents, since it
should not be interpreted as exclusively a political liability, but as an acknowledgment of the
priority role of the avagani in the mutual relations between the avagani and the mayor. This
approach is also based on the best European practices and standards, according to which the
political liability of local elected representative can be defined first of all before the municipal
4http://parliament.am/draft_history.php?id=9322 5 Logically, it is proposed to develop and adopt the RA draft law on Inter-municipal cooperation 6 Article 68 of the RA Law on Local Self-government, Article 40 of the RA Law on Local Self-government in
Yerevan
12
voters7. Voters can express their opinion over the dismissal of the local elected representative
through local referendum. The importance of political control by the municipal voters has
been acknowledged in the recommendation N R (98) 12 on Supervision of Local Authorities’
Action of the CoE Committee of Ministers where it was proposed to conduct that supervision
by the use of indirect democracy instruments.
5. According to part 1 of Article 186 of the RA Constitution, with a view to perform the
mandatory tasks of a municipality, the law prescribes tax and non-tax sources which are
7Liability of local elected representatives for acts or omissions in the course of their duties, Report by the Steering
Committee on Local and Regional Democracy (CDLR), pages 43-45, https://rm.coe.int/16806f93c8
Textbox 2. Right to inter-municipal cooperation
Inter-municipal cooperation is characteristic of decentralized territorial administration
systems. In line with the decentralization level of the local self-government, the cooperation need
and desire of the local bodies are growing. The inter-municipal cooperation is the “vertical”
cooperation between the municipal bodies, which aims at increasing the efficiency of the exercise
of their powers by uniting efforts. The inter-municipal cooperation is the logical solution to the
restriction of the consequences of non-optimal distribution of competence and resources (Inter-
Municipal Cooperation Toolkit-Manual, 2010, http://www.municipal-
cooperation.org/images/4/4c/IMC_Toolkit_Manual.pdf).
The right of inter-municipal cooperation of LSGs is defined in part 1 of Article 10 of the
European Charter of Local Self-Government, according to which “1. The local self-government
bodies, while exercising their powers, have a right to cooperate and form unions with other local
self-government bodies within the frames of the law for solving issues of common interest”
(https://www.coe.int/en/web/conventions/full-list/-/conventions/rms/090000168007a088).
Actually, this formulation leads to the following: 1. The LSGs have a right to inter-municipal
cooperation, 2. The right to inter-municipal cooperation can be exercised through forming unions
(original - consortia), 3. The inter-municipal cooperation is being carried out for solving issues of
common interest.
As it stems from the content and name of this Article (“The right of local bodies to be
merged”), the inter-municipal cooperation is demonstrated through the exercise of the right to
be “merged”. Therefore, the organizational and legal forms of the exercise of the right to be
merged can be different and defined by the domestic legislation of the states.
The institutionalization of the municipalities’ right to be merged has different manifestations
in different states. The European countries, when developing their inter-municipal cooperation
policies, are guided by the principles of the combination of different forms (Good practices in
inter-municipal co-operation in Europe, Report of the European Committee on Local and Regional
Democracy (CDLR), page 15, https://rm.coe.int/1680746dea). The inter-municipal cooperation can
be informal that is just based on the consent of the municipalities, and formal in case of which
the cooperation is being institutionalized.
According to the Recommendation 221 (2007) Institutional framework of inter-municipal
cooperation of the Congress of Local and Regional Authorities (http://www.municipal-
cooperation.org/images/f/f7/Legal_Act_Recommendation_221_CoE_Institutional_framework_of_
IMC_2007.pdf), inter-municipal cooperation may take a wide variety of forms in Europe. The
organizational-legal form of the inter-municipal cooperation can be freely chosen by the local
authorities or imposed. It may be provided for by law or by other means (by contract). It may
entail setting up a public-law or private-law legal entity or a new local authority.
13
necessary for their implementation. Whereas, the RA Law on Local Self-government, by
defining the mandatory tasks of a municipality8 and the own powers of the mayor for
exercising them, has not defined the financing procedure required for their implementation.
Therefore, the necessary funding sources for exercising the mandatory tasks of a
municipality are still insufficient. The legislative solutions regulating these legal relations
should be included in the RA Tax Code as well, the RA Law on Budgetary System of the
Republic of Armenia and the RA Law on Local Duties and Fees.
6. According to part 1 of Article 181 of the RA Constitution, the RA Electoral Code can set
out direct and indirect election of the municipal mayor. The aforementioned Article
enshrines that the abovementioned issues should be regulated by the RA Electoral Code, but
doesn’t clarify the criteria the indirect election procedure of the municipal mayor should be
based on.
The study of the regulations of indirect election of the municipal mayor shows that they are
not coordinated and have been included in different legal acts. In particular, the RA Electoral
Code has defined the election procedure of LSGs elected by only direct election procedure,
whereas the election procedure of the municipal mayor elected by an indirect election
procedure is defined by Chapter 5 of the RA Law on Local Self-government and as for
Yerevan city – by the RA Law on Local Self-government in Yerevan. In fact, setting an
indirect election procedure for the avagani formed by a proportional electoral system and
mayor of the municipality is based on the large number of municipal voters /big
municipalities/ (for instance, in case of Vanadzor and Gyumri cities, 33 members in case of
having more than 70.000 voters9). The logic of such legal regulation can create strictly volatile
legal procedure in case municipalities are amalgamated at the current dynamic stage of
administrative-territorial reforms and will also have more than 70.000 voters. In turns out
that the legislator defines different approach with no reasonable justification for two
municipalities with the same legal status. In this regard, the procedure of indirect election of
the municipal mayor in Armenia can be considered discriminated and unjustified, therefore,
the respective legal norms need to be changed and clarified.
7. According to part 1 of Article 188 of the RA Constitution, the authorized body of the
government, in the cases and under the procedure prescribed by law, exercises legal
oversight over the implementation of own tasks of a municipality. Meanwhile, part 1 of
Article 96 of the RA Law on Local Self-government defines: “The authorized body of the
government of the Republic of Armenia can conduct legal oversight over the exercise of own
powers of local self-government bodies directly or through marzpets”. This legal provision
of the aforementioned law obviously contradicts to the content of the Constitutional
norm, which recognizes only the government’s authorized body as a subject
exercising legal oversight and doesn’t grant such power to marzpets.
8 Article 12 of the RA Law on Local Self-government 9 Article 105 of the RA Electoral Code
14
Legislative Gaps and Contradictory Legislative Regulations
According to point 18 of Article 18 of the RA Law on Local Self-government10, the avagani
in cases prescribed by law sets the types and rates of local taxes, duties, and fees. According to
Article 86 of the same Law, hotel tax is a type of tax revenues for the formation of municipal
budget. Although the power to set a hotel tax is defined by the RA Law on Local Self-government,
it is not enshrined in the tax legislation as a type of local tax. Part 1 of Article 6 of the RA Tax
Code, which entered into force on January 1, 2018, in addition to others, defines the types of local
taxes, the list of which doesn’t include the hotel tax. According to part 2 of the same Article,
“taxes not prescribed by points 1 and 2 of part 1 of this Article, cannot be defined in the Republic
of Armenia”. Based on the combination of the aforementioned legislative acts we can conclude
that there are contradictory regulations in the legislative acts.
In 2017, the procedure of releasing municipal bonds stipulated by Article 30 of the RA Law
on Budgetary System of the Republic of Armenia has not been defined by law as well, as a result
of which the opportunity to release municipal bonds (stipulated by the same Article) by the
mayor has not yet found a practical application.
Judicial Constitutional Oversight over Acts Regulating Local Self-government Sector
In 2017, the RA Constitutional Court has recognized part 3 of Article 64 of the RA Law on
Local Self-government as contradictory to the requirements of Articles 1, 6, 9 and 179 of the RA
Constitution11. This provision regulates the jurisdiction matters of the avagani sessions of Gyumri
and Vanadzor, in essence defining that the avagani session is competent if it is attended by the
required number of avagani members for adopting a decision (at least ¼ of the total number of
avagani members according to part 4 of the same Article).
The Constitutional Court has found that the legislative definition of the minimum threshold
of the session jurisdiction is necessary since the jurisdiction of the session of the public authority’s
collegial body and the jurisdiction to make decisions are key components of its existence and
activity, over which the legislative regulations should be clear and certain. However, according
to the existing legal regulation, accepting at least ¼ of the total number of avagani members as a
base for the jurisdiction of avagani session and decision-making, the engagement of most of the
avagani members in the representative democracy process in that municipality is not ensured in
the avagani sessions and decision-making process. Such legal regulation is not in accordance with
the requirements of Articles 1 and 2 of the RA Constitution, since the representative bodies of a
democratic and legal state, while carrying out their activities, making decisions, should not bypass
the expression of will of that body members and also that of the respective part of the municipal
residents (that right is guaranteed by both the RA Constitution (Article 9) and the European
Charter of Local Self-governance), and also the interest of majority of their voters (Article 179 of
the RA Constitution).
In addition, based on the arguments of the sides and taking into account the fact that the
elections of avaganis in Gyumri and Vanadzor municipalities are being held by a proportional
electoral system, the main feature of local self-government in these municipalities is granting
importance to the political component. In this case, based on the general democratic principles
10 http://www.arlis.am/DocumentView.aspx?DocID=114406 11 CCD-1384, 10 November 2017, http://concourt.am/armenian/decisions/common/2017/pdf/sdv-1384.pdf
15
for the exercise of public authority, the rights of political minority should also be guaranteed and
protected as a priority. One of the main goals of the 2015 RA Constitutional reforms was to
ensure the effective role of the parliamentary minority thanks to the increase of the quorum
threshold, but it has not found its legislative reflection in the local self-government sector.
The decision of the Constitutional Court is strictly important in the constitutionalization
process of the local self-government relations, and the RA National Assembly should make
respective changes in the RA Law on Local Self-government within the timeframes set by the
Constitutional Court (before 31 May 2018).
1.2. Programmatic Assessment of Local Self-government Reforms
On January 19, 2017, according to decision N646-A of the RA government, “The RA
Government’s 2017-2022 program” was adopted, which was approved by the RA National
Assembly by decision NA002-N of 22.06.2017. According to this program, the RA government
has planned to implement a number of actions in local self-government sector. The timeframe for
implementing most of these actions is set until 2019 or 2022, therefore, the assessment of their
implementation can be premature. Nevertheless, some actions should have been taken by the
end of 2017. In particular, according to paragraph 1 of point 3 of the 1.2 chapter (Territorial
administration and local self-government) of the RA Government’s 2017-2022 program, the RA
government plans to develop concrete criteria for investment programs by the end of 2017 aimed
at developing entrepreneurship, promoting investment and operational programs and their
effective implementation directed to socio-economic development of municipalities, increase of
the population’s livelihood and creation of jobs. For the implementation of the latter, the RA
government has approved the assessment procedure12 of investment and business programs,
which significantly affect the municipal economy growth by protocol decision N53 of the 21
December 2017 session.
According to point 4 of the same chapter, the RA government has planned to submit the
solid waste management systems development concepts of Shirak, Lori, and Syunik marzes for
the RA government’s discussion aimed at improving and developing the solid waste management
system. For the implementation of this provision, the RA government has approved the RA
Shirak marz solid waste management concept by protocol decision N38 of 07.09.2017, the RA
Lori marz solid waste management concept by protocol decision N49 of 23.11.2017 and the RA
Syunik marz solid waste management concept by protocol decision N54 of 28.12.2017.
According to point 2.1.b of the same section, in order to increase the quality of services
provided by municipalities, it is stipulated to define and introduce concrete criteria for the
services provided by the end of 2017, which, in fact, has not been implemented.
Assessment of Activities of Government Bodies Responsible for Development of Local
Self-government
The NA Standing Committee on Territorial Administration, Local Self-Government,
Agriculture and Environment convened 12 sessions during 2017 and approved a number of
legislative bills on local self-government, to be included in the agenda of the National Assembly13.
12 http://www.arlis.am/DocumentView.aspx?DocID=118605 13http://parliament.am/committees.php?lang=arm&do=show&ID=111192&cat_id=&show_session=&month=00&yea
r=2017
16
At the same time it’s worth mentioning that the Committee has not organized
parliamentary hearings on the bills regulating local self-government sector, which means that it
hasn’t effectively exercised its power to convene parliamentary hearings.
The RA Ministry of Territorial Administration and Development, the executive body
responsible for the reforms and development of local self-government, has developed several
sectorial draft laws, in particular the draft laws on making amendment in the RA Law on Inter-
Municipal Unions, Municipal Waste, Local Referendum, and etc. It’s important to state that the
RA Ministry of Territorial Administration and Development has not organized sufficient public
discussions and hearings, for instance, in terms of discussing the bill on Inter-Municipal Unions,
revealing and taking into account the opinion of municipalities and other concerned sides. For
this purpose, in the first quarter of 2017 in the framework of the USAID funded CELoG program,
3 cluster meetings-seminars were organized in Sisian, Vanadzor and Yerevan14. This small number
of discussions cannot be considered as complete. Nevertheless, the participants of the
aforementioned discussions presented nearly 80 proposals over the draft, some of which were
taken into account by the Ministry of Territorial Administration and Development while
amending the draft.
The ministry has developed and provided to municipalities a number of methodologies,
methodological guidelines and manuals on specific local self-government-related issues, in
particular:
“Guideline for calculating local fee rates prescribed by the RA Law on Local Duties and
Fees”,
“Manual for implementation of procedural activities for local self-government bodies,
administrative heads and staffs of merged municipalities”,
“Methodological guideline for the organization of activities of local self-government bodies
and staffs in multi-settlement amalgamated municipalities”,
“Methodological guideline for delegation of the services provided by the municipalities to
private companies”,
“Methodological guidelines on the development and management of five-year municipal
development plan”,
“Development of economy in municipalities” guideline,
“Methodological guideline for the development of annual working plan of the
municipality”,
“Procedures of services provided by administrative heads through municipal management
information system” manual,
“Programmatic budgeting methodology in RA Local Self-government”15.
14 http://cfoa.am/archives/13171 15 http://www.mtad.am/files/docs/1745.pdf
17
1.3. Performance of Armenia’s International Commitments in
Local self-Government
Armenia’s international commitments in local self-government sector are linked with the
implementation of the provisions of the European Charter of Local Self-governance and the
assignments of the Congress of Local and Regional Authorities of the Council of Europe and their
respective legal application in the RA legislation. In this context, it’s worth highlighting the Local
Democracy in Armenia document N CPL(26)2FINAL adopted by the Chamber of Local
Authorities of the CoE Congress of Local and Regional Authorities on 26 March 2014, which
contains a number of proposals to the RA government on strengthening and developing local
democracy.
Outlining the steps ensuring progress conducted in several fields, the aforementioned
document presents some proposals, which still require systematic solutions and concrete actions.
In particular, in addition to others, it is proposed to set a formal consultation mechanism by law
to ensure that proper consultations are held with local authorities and their national unions within
the timeframes and procedures set by law on issues which directly concern them, to ensure that
the administrative oversight of local authorities is restricted by the oversight of legality of the
actions of municipality, and the interference of controlling authorities is proportional to the
importance of interests subject to protection, etc.16
Conference entitled "Innovation and Regional development: Agents for Growth in Eastern
Partnership Countries", which was organized by the RA Ministry of Territorial Administration
and Development and the Conference of Regional and Local Authorities for the Eastern
Partnership (CORLEAP), was held in Yerevan on 24 October 2017, within the frames of which
the process of transition to e-governance in local and regional authorities launched.
The talks between Armenia and the European Union on the Comprehensive and Enhanced
Partnership Agreement, which lasted for nearly 4 years, have been completed in Brussels on
November 24, 2017 by the signing of the Agreement. It envisages cooperation between the EU
and Armenia, in the fields of rural municipality development, tourism development in places,
multi-level, including strengthening local governance, inter-institutional cooperation of local and
central bodies, capacity development of local bodies, as well as other fields17.
16 http://www.mtad.am/files/docs/1500.pdf 17 http://data.consilium.europa.eu/doc/document/ST-12525-2017-ADD-1/en/pdf
18
2. Administrative-territorial division and inter-municipal cooperation
The territory of Armenia is 29 743 km2, of which 68.78% occupy agricultural lands, 11.23%
forests and 11.28% specially protected areas. Only 7.57% of agricultural lands are irrigated.
Distribution of land stock of RA by land ownership types is shown in the table 118. Surface
of Sevan Lake is 1 276.5 km2.
Table 1. Distribution of land stock by land ownership types, as of July 1, 2017
Land ownership
Surface of land stock
/km2/ (as of 2017)
Share in total (%)
Surface of land stock /km2/ (as of 2016)
Changes, as compared to 2016
/km2/
Citizens 5381 18.09% 5375 6
Legal entities 307 1.03% 302 5
Municipalities 10315 34.68% 10327 -12
State 13733 46.17% 13732 1
Foreign countries, International
organizations 7 0.02% 7 -
Total 29743 100.0% 29743
As of January 1, 2018 the permanent population of Armenia is 2 972.9 thousand people,
which is 13.2 thousand (0.44%) less as compared to the last year19. Meanwhile, the population of
the capital Yerevan increased by 0.6 thousand in 2017. Summary data on the permanent
population of RA from 2000 to 2018 by urban and rural population and their movement are
shown in Appendix 1.
67.3% of the population is the country's labor force.
According to the law on Administrative and Territorial Division of Armenia, marzes and
municipalities are administrative-territorial units. The territory of the country is distributed
among 10 marzes and Yerevan municipality20. The borders of the latter are defined by the Law
on Local Self-government in Yerevan.
Except for Kotayk marz, the other marzes have borders with neighboring countries.
Municipalities are self-governing administrative units. A municipality can consist of one or
more settlements. A municipality consisting of more than one settlement is a multi-settlement
municipality. Its center and name are defined by law21.
18 Decision of RA Government № 1338, 12.10.2017, “Report 2017 on the status and distribution of land stock of RA
(land balance (as of July 1, 2017), available at
http://www.cadastre.am/storage/files/pages/pg_0998130204_voroshum.pdf 19 National Statistical Service of RA, Socio-Economic Situation of the Republic of Armenia in January-December
2017, available at http://armstat.am/am/?nid=82&id=2007 20 RA Law on Administrative and Territorial Division of Armenia, 07.11.1995 21 Ibid.
19
Table 2. Administrative-territorial division and population of Republic of Armenia (by January 1, 2017)
Marz
Cen
ter
of M
arz
Dis
tance
fro
m t
he
capit
al2
/km
/
Area (share in the territory of RA) /
km2/
Number of municipalities (share in the
total number of municipalities
of RA)
Settlements (urban and rural)
Population (share in the
total population of
RA) /thousands/
Pop
ula
tion
den
sity
(p
eople
/sq.k
m)
Urban population (share in the population of marz
and RA) /thousands/
Yerevan - - 223.3 0.8% 1 0.2% 1 1 - 1076.4 36.2% 4820.9 1076.4 - 36.2%
1 Aragatsotn Ashtarak 23 2756.3 9.3% 72 14.3% 120 3 117 127.9 4.3% 46.4 28.0 21.9% 0.9%
2 Ararat Artashat 30 2090.0 7.0% 95 18.9% 99 4 95 257.4 8.7% 123.2 72.7 28.2% 2.4%
3 Armavir Armavir 45 1242.1 4.2% 97 19.3% 98 3 95 265.4 8.9% 213.7 83.7 31.5% 2.8%
4 Gegharquniq1 Gavar 92 5349.2 18.0% 57 11.4% 98 5 93 229.2 7.7% 42.8 67.7 29.5% 2.3%
5 Lori Vanadzor 117 3798.6 12.8% 56 11.2% 130 8 122 217.8 7.3% 57.3 128.9 59.2% 4.3%
6 Kotayq Hrazdan 50 2085.5 7.0% 42 8.4% 69 7 62 250.7 8.4% 120.2 136.7 54.5% 4.6%
7 Shirak Gyumri 121 2680.3 9.0% 42 8.4% 131 3 128 236.3 7.9% 88.2 138.5 58.6% 4.7%
8 Syuniq Kapan 301 4505.4 15.1% 8 1.6% 138 7 131 138.6 4.7% 30.8 93.6 67.5% 3.1%
9 Vayots Dzor Yeghegnadzor 124 2307.8 7.8% 8 1.6% 55 3 52 49.8 1.7% 21.6 17.4 34.9% 0.6%
10 Tavush Ijevan 131 2704.0 9.1% 24 4.8% 66 5 61 123.4 4.2% 45.6 52.2 42.3% 1.8%
TOTAL 103.43 29742.6 100% 502 100% 1005 49 956 2972.9 100% 67.14 1895.8 42.8%5 63.8%6 1 Including Sevan Lake
2 By Google Maps
3 Average distance between the capital and centers of marzes
4 Average density of population by marzes (excluding the territory of Sevan Lake)
5 Level of urbanization in marzes
6 Total level of urbanization of RA
20
As of January 1, 2018, taking into consideration the administrative-territorial changes, there
are 502 municipalities (including Yerevan) which include 1005 settlements (instead of previous
1001). It is noteworthy that according to the amendments in the Law on Administrative and
Territorial Division of Armenia of 09.06.2017 "settlement" status was granted to four residential
areas located in the former Lernadzor municipality of Syuniq marz. Those settlements are
Andokavan, Babikavan, Katnarat and Pukhrut.
68 out of 502 are multi-settlement municipalities, 54 out of which consist of more than 3
settlements22.
Summary data on administrative-territorial division and population of the RA (as of 1
January 2018) is shown in Table 2.
2.1. Administrative-territorial division
Municipal amalgamation process launched in 2015, continued throughout 2017. In
comparison with the previous years the number of consolidated clusters in 2017 is much bigger
reaching 34, which are located in Aragatsotn, Gegharquniq, Lori, Kotayq, Shirak, Syuniq, Vayots
Dzor and Tavush marzes. During the reporting period, no clusters were amalgamated in Armavir
and Ararat marzes only.
According to the law adopted by the RA National Assembly on June 9, 201623 325 former
municipalities including 374 settlements were amalgamated and 34 new municipalities with their
centers were formed, which are:
● 4 municipalities in Aragatsotn marz
Aparan (21 settlements), Alagyaz (11 settlements),
Aragatsavan (4 settlements), Tsaghkahovit (10 settlements),
● 4 municipalities in Gegharquniq marz
Chambarak (13 settlements), Vardenis (4 settlements),
Geghamasar (19 settlements), Shoghakat (6 settlements),
● 10 municipalities in Lori marz
Alaverdi (7 settlements), Akhtala (9 settlements),
Stepanavan (4 settlements), Tashir (12 settlements),
Gyulagarak (7 settlements), Lori Berd (9 settlements),
Metsavan (4 settlements), Shnogh (3 settlements), Sarchapet (8 settlements), Odzun (9
settlements),
● 6 municipalities in Kotayq marz
Byureghavan (3 settlements), Yeghvard (6 settlements),
Charentsavan (6 settlements), Akunq (8 settlements),
Meghradzor (7 settlements), Jrvezh (3 settlements),
22 Ibid. 23 RA law on making amendments and additions to the RA Law on Administrative-Territorial Divisions of RA,
09.06.2017
21
● 3 municipalities in Shirak marz
Ani (19 settlements), Akhuryan (8 settlements), Marmashen (16 settlements),
● 3 municipalities in Syuniq marz
Kapan (38 settlements), Sisian (32 settlements), Qajaran (21 settlements),
● 3 municipalities in Vayots Dzor
Areni (11 settlements), Gladzor (3 settlements), Yeghegis (16 settlements),
● 1 municipality in Tavush marz
Berd (17 settlements)
Information on former municipalities, settlements, administrative area and population
included in the newly-formed municipalities, is shown in Appendix 2.
Table 3 summarizes the information on administrative-territorial reforms as of January 1,
2018.
Table 3. Administrative-territorial reforms as of January 1, 2018
Amendments in the Law on Administrative and Territorial
Division of the Republic of Armenia
«Dissolved municipalities*
Newly-formed municipalities
Municipalities included in the amalgamation
process
09.06.17 AL-93-N 291 34 325
17.06.16 AL-100-N 103 15 118
24.11.15 AL-148-N 19 3 22
Total 413 52 465
Total number of municipalities 502
Number of municipalities not
included in the amalgamation
process**
450
* It refers to the number of municipalities that ceased to exist separately and were included in a multi-settlement
municipality as a settlement.
** It refers to the number of municipalities that haven’t been or won’t be included in the amalgamation process.
Following the Constitutional amendments of December 6, 2015 provision of holding local
referendums in respective municipalities in case of administrative-territorial reforms was
withdrawn24. Based on this local referendums were not held in the above-mentioned 34 clusters.
It should also be noted that awareness-raising on amalgamation has not been properly
implemented in municipalities either. Moreover, in some cases, citizens were informed of the
amalgamation of their municipality only when the respective draft law was published on the RA
NA website. This kind of behavior of the central government caused discontent, in some places
residents showed their disagreement and complaint by blocking the roads of republican
significance25.
According to another law adopted by National Assembly on June 9, 201726, elections of
mayors and avagani were scheduled on November 5 in the above-mentioned amalgamated
24 RA Constitutional amendments, 06.12.2015. 25 http://armtimes.com/hy/article/114309 26 RA law on making amendments and additions to the RA Law on Local Self-government, 09.06.2017.
22
municipalities. The procedure of holding regular LSG elections is prescribed by the Electoral Code
of the Republic of Armenia.
According to the above-mentioned law, the day after the official announcement of election
results, the powers of the former (amalgamated) mayors and avagani members were terminated.
In 22 out of 34 newly-formed municipalities (65%) former mayors of the center-settlements
were elected as mayors. In 5 out of 34 newly-formed municipalities mayors were elected from
non-center settlement, which makes up 15% of 34 municipalities. In the remaining 7 municipalities
(20%) new candidates, who were not in the position of a mayor at the moment of elections, took
up this position (Alagyaz, Aparan, Geghamasar, Chambarak, Vardenis, Alaverdi and Marmashen
municipalities).
The above-mentioned election processes, as well as political affiliation of the newly elected
mayors are described in Appendix 327.
Legislation has a provision28 on the presence of an administrative head in every settlement
included in multi-settlement municipalities, which in some cases becomes problematic. In
particular, there are settlements with non-permanent residents; the mandatory requirement for
having administrative heads in such settlements is ambiguous. It would be preferable if avagani
decides the necessity and expediency of having an administrative head in such settlements.
Due to the administrative-territorial reforms of 2017, the average size of administrative area
of a municipality has changed. As of January 1, 2018, the average administrative area of a
municipality was 56.7 km2, while in respect of agricultural land 40.7 km2. The average population
size of a municipality has also changed amounting to 5922 (including Yerevan) and 3785 (without
Yerevan).
In terms of the average administrative area and the average population size of a municipality
Armenia is ranked 25th and 27th respectively among the 42 European countries29 (compared to
30th and 33rd last year). More detailed information on these indicators is shown in Appendix 4.
By average size of an administrative area per municipality, Armenia is similar to Spain and
is slightly higher than Ukraine and Belgium and by average population size to Estonia, Spain, and
Luxemburg.
The average administrative area and average population size per municipality in the
European countries are 288 km2 and 17 669 respectively and 264.4 km2 and 15 885 in the EU 27
Member States.
Textbox 3. Comments on ongoing amalgamation reform of municipalities in Armenia
Administrative-territorial reform launched in 2015, continued throughout 2017, thus 18 new multi-
settlement municipalities were formed in 2016 and 34 in 2017, making up 52 municipalities.
The study of the amalgamated clusters and the list of included municipalities raises a number of
questions, answers to which have not been found over time. It particularly it refers to the “restoration”
of Soviet regions. Of course, it is pointless to claim that the formation of the cluster by inclusion of
municipalities of the former soviet region is a negative phenomenon, but there is no argument justifying
such an approach either. There is no expert evidence (or not presented to the public) which the state-
27 Official website of the Central Electoral Commission of RA, www.elections.am 28 RA Law on Local Self-government, 07.05.2002, Article 31 (16.01.2018, AL-66-N amendments)։ 29 Indicators of the UK are not included due to the significant values and impact on the total numbers.
23
authorized body took into an account while forming Kapan multi-settlement municipality with 38
settlements or Sisian multi-settlement municipality with 32 settlements.
There were also issues related to publicizing of amalgamated clusters. In fact, information about the
latter became available only when the ready package was posted on e-draft.am for public discussion. No
awareness-raising campaigns were held among population, alternative options were not discussed. It feels
as if the amalgamation map was formed behind "closed doors" based on limited perceptions.
It is noteworthy that up to now there are not even brief analyzes of the managerial changes, the
effectiveness of allocating funds, the achievements and the difficulties encountered in the newly formed
18 municipalities. The existence of such document would give a more detailed overview of the experience
of implementing the administrative-territorial reform and avoiding any further problems.
Another concern regarding the observed period of the administrative-territorial reforms is related
to the scarcity or lack of capital investment in the newly formed municipalities. Some capital investments
were implemented in the former 18 amalgamated municipalities (mostly with the support of international
organizations). But up to now no similar financial investment has been recorded for the 34 municipalities
formed in 2017. This may have a negative impact on the further implementation of the administrative-
territorial reform.
It should be noted that in 2017 the Government of Armenia promised to finance half of the capital
programs of the municipalities, provided that municipalities envisage savings in the capital budget of the
municipality and finance the other part of the capital program.
In the above-mentioned context, the Government of the Republic of Armenia made an addition to
its decision N 1708 of November 16, 200630, which states that in addition to the subventions already
envisaged by the state budget, municipalities may submit applications to the marzpet to receive other
subventions. These applications shall be submitted for consideration and approval by the Government of
the Republic of Armenia after passing the established procedure, and the latter shall decide on the issue
or refusal of the subvention.
To sum up, it should be noted that the municipalities formed as a result of the administrative-
territorial reforms are essentially different from small municipalities by their human and financial
resources and it creates a serious basis for increasing the effectiveness of managerial and financial
management in the municipality. The latter is also an important prerequisite for starting the long-awaited
decentralization process, which implies a gradual transfer of powers by state bodies to municipalities in
order to exercise them more efficiently.
In terms of administrative-territorial reform and distribution of population in the country,
the proportion of urban and rural population to total number population is also of high interest.
These numbers demonstrate the level of urbanization in Armenia, in other words, proportion of
urban population to the total number population of the country.
As of January 1, 2018, urban population of Armenia is 1895.8 thousand, accordingly, the
level of urbanization is 63.8%.
The change of proportion of urban population as well as the comparison with the same
index of other countries is also interesting. Figure 1 presents the change in the level of
urbanization starting from 1960 in Armenia, countries of the European Union as well as countries
of the Eastern Europe with the territory not exceeding 60 thousand km2 and population of 5-5.5
billion people (including Georgia and Azerbaijan)31.
30 Decision of RA Government N 1726, 28.12.2017, available at
http://www.arlis.am/DocumentView.aspx?docid=119059 31 Available at https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS
24
Figure 1. Level of urbanization in Armenia, EU countries and that of comparable countries in
Eastern European
As it can be seen, during the reporting period the level of urbanization in Armenia was
always higher than 50%. For comparison, according to Figure 1, the average urbanization index
of 13 countries in Eastern Europe is significantly lower than that of Armenia. But if we compare
the level of urbanization with GDP per capita of the same countries, we will get the whole
picture32 (Figure 2).
Figure 2. Level of urbanization and GDP per capita (as of 2017)
32 Available at https://data.worldbank.org/indicator/NY.GDP.PCAP.CD
30%
40%
50%
60%
70%
80%
1960 1970 1980 1990 2000 2010 2016
Eastern Europe Armenia EU
Albania
Azerbaijan
Bosnia and Herzegovina
Cyprus
Estonia
Georgia
Croatia
Moldova
Macedonia, FYR
Malta
Montenegro
Slovak Republic
Slovenia
Eastern Europe
Armenia
World
European Union
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
GD
P p
er c
apit
a, $
Urbanization level, %
25
Figure 2 presents the level of urbanization of the Eastern European countries (comparable
to the territory and population of Armenia) as of 2017 and its comparison with GDP per capita
(USD). As it can be seen from Figure 2, Armenia is a relatively high-urbanized country, its index
is higher than the average index of 13 countries, but GDP per capita is considerably less than the
average of these countries. The average GDP per capita of the EU member states is nine times
higher than that of Armenia (32.2 thousand USD versus 3614 USD)33.
2.2. Inter-municipal cooperation
In 2017 significant steps were taken to improve inter-municipal cooperation.
Based on the requirements to make amendments in the RA Constitution, adopted through
referendum on December 6, the draft law on “Inter-Municipal Unions” was put into circulation
by the RA MTAD.
From January to March of 2017 in the framework of CELoG program CFOA organized 3
public discussions on the mentioned draft law (Sisian, Vanadzor, Yerevan) with participation of
local authorities and CSOs. The recommendations made during the discussions were submitted
to RA MTAD.
On December 2, 2017 RA Government submitted the draft Law on Inter-Municipal Unions
to RA NA34. After the NA hearings, the draft law was adopted after the second reading and the
final draft was adopted on March 7, 2017.
Textbox 4. Comments on RA law on “Inter-Municipal Unions”
Inter-Municipal Union (IMU) is one of the forms of inter-municipal co-operation, in case of
which a management body(s) is required. The existence of such a body (s) requires a legislative
regulation as according to the RA Constitution IMU is a legal entity under public law. Otherwise,
municipalities aren’t restricted to cooperate with neighboring municipalities to provide public
services to residents. The problem is the lack of local authorities' desire to unite and cooperate
for various reasons, such as mutual distrust or the fear of possible corruption.
It should be noted that the RA legislation has not defined the term "legal entity under public
law" yet. There are still some legal deficiencies in this regard.
The above-mentioned package defines the concept of the IMU, its formation types (on a
voluntary bases and based on law), governing bodies and other interconnected legal relations.
However, there are several comments regarding the legislative initiative, which are
discussed below.
According to the draft, the bodies of the union are the council and the chief. The latter is
actually the executive body of the IMU, who should be elected from among the mayors of
municipalities, who are council member.
First of all, it is hard to imagine how a mayor will be able combine his position with the
chief of IMU. Both positions require daily work overload and combination of two positions will
inevitably lead to failures in one of the positions.
33 Available at https://data.worldbank.org/indicator/NY.GDP.PCAP.CD 34 http://parliament.am/drafts.php?sel=showdraft&DraftID=9322&Reading=0
26
Second, we would like to emphasize the approach towards selection of chief of IMU is non-
professional. We believe that the council of IMU should announce a competition and appoint the
chief based on the results; the chief should be an experienced person with relevant professional
knowledge and skills in that area. He/she should be accountable to the council and not be
constrained by affiliation to any of the municipalities. This will completely eliminate the intension
of biased approach to any of the municipalities.
Third, mayor does not have the right to engage in another paid job, except for scientific,
pedagogical and creative work. Therefore, he/she must exercise his powers on a voluntary basis,
i.e. without remuneration. In this case, the effectiveness of the joint work of the "unpaid" chief
and paid employee is doubtful.
There are obvious difficulties in the proposed legislative package related to the recruitment
of the IMU staff. According to the draft, member municipalities are mentioned in the IMU
Charter; in the case of inclusion of a new member municipality, the Charter and the State
Registration of the IMU should be reviewed according to the procedure prescribed by law.
Favorable conditions will be created for IMUs established by law and exercising state-
delegated powers, so that the central government will be able to delegate powers vested with
public administration bodies to IMUs, thereby increasing accessibility of public services.
Thus, we can state that, with the adoption of the above-mentioned law, the "insurmountable
obstacles" that prevent the central government from continuing the decentralization process in
Armenia, seem to be overcome.
On February 4, 2017 the RA Law on making amendments and additions to the RA Civil
Code35 entered into force, according to which the legal form of "Union of Legal Entities" (ULE)
was terminated and the provisions related to it were declared void. According to amendments,
legal entities which are commercial organizations, may be created by public associations,
foundations, or other organizational forms prescribed by law. According to the mentioned
amendments, within one year from the date of its entry into force, ULEs shall bring their charters
in line with the new requirements of the RA Law on Non-Government Organizations and be re-
registered.
These legislative changes are directly related to the so-called "municipal association" or
"inter-municipal union" ULEs, which maintain joint property and land tax databases as well as
tax collection for member municipalities. There is no information on the number of "municipal
associations" or "inter-municipal unions" which have been re-registered to change their
organizational form, as well as on the number of those that terminated their activities.
In 2017 RA MTAD put into circulation the draft “Development concept of regional growth
poles”36. The basis for the development of the latter was the approved “Armenia’s Territorial
Development Strategy for 2016-2025” 37 one of the aims of which is the formation and
development of “regional growth poles”.
The concept is a guide for local and regional governing bodies to create and develop regional
growth poles. The formation and development of "regional growth poles" in the regions of the
35 RA Law on making amendments and additions to the RA Civil Code, available at
http://www.arlis.am/DocumentView.aspx?docid=110836 36 Available at http://www.mtad.am/files/docs/1721.pdf 37 Available at https://www.e-gov.am/u_files/file/decrees/arc_voroshum/2016/07/ardzanagrayinNrq064.pdf
27
RA will allow to shift from one-polar, capital-based economy to the multi-polar, stable and
balanced economy.
The aim of the concept is to create centers of excellence for economic well-being in polar
cities and to increase competitiveness, as well as to increase budget and develop socio-economic
infrastructures. According to the concept, the regional growth pole is an area of the
country/municipality, where a certain sphere of economy can have faster qualitative and
quantitative development compared with the average of the country and region, gradually giving
a new impetus to the other underdeveloped industries and spheres of the country's economy.
Possible options of such growth poles are Gyumri, Vanadzor, Dilijan, Jermuk, Alaverdi,
Ararat, Yeghegnadzor, Artashat, Sevan, Metsamor, Qajaran, Ashtarak, Agarak, Akhtala and
Tsaghkadzor.
The formation of poles must be conditioned by the development of a key sector and its
positive effect on the municipal economy.
It should be noted that the draft concept underwent public discussion on the website for
Publication of Legal Acts of the Ministry of Justice (e-draft.am)38 from November 1 to 16, 2017.
However, it has not been officially adopted yet.
In terms of cross-border cooperation, Armenia-Georgia Joint Operation Program as a
component of the EU Eastern Partnership Territorial Cooperation Program continued in 2017, in
the framework of which 9 grants were awarded. The cross-border cooperation is implemented in
youth affairs, joint economic development, tourism, solid household waste management,
environmental protection, and other areas39.
In terms of Armenian-Iranian cross-border cooperation, "Meghri" free economic zone was
opened on December 15, 2017, where the businessmen will be exempt from profit tax, value
added tax, excise tax and customs duties, paying only the income tax40. Information about the
zone's activities and economic benefits is not available yet.
By the end of 2017 RA MTAD put into circulation the draft concept of “Trans-boundary
territorial cooperation”41. The concept will become a guide for local self-government and
territorial administration bodies while implementing trans-boundary territorial cooperation.
The concept defines goals, principles, and directions of activity, types of cooperation and
other provisions of the RA Government and LSGs in the areas of trans-boundary territorial
cooperation.
According to the draft concept, trans-boundary territorial cooperation is not only the
cooperation between the RA marzes and municipalities and administrative territorial units of the
neighboring states, but also administrative territorial units of the non-neighboring states, legal
entities and non-government organizations which have common interests and coordinated
actions.
It should be mentioned that the draft concept underwent public discussion on the website
for Publication of Legal Acts of the Ministry of Justice (e-draft.am)42 from October 31 till
November 15, 2017. However, it has not been officially adopted yet.
Armenia’s borders with Turkey and Azerbaijan are still closed.
38 https://www.e-draft.am/projects/508 39 Source: http://eaptc.eu/en/program/view-armenia-georgia.html 40 Source: https://www.azatutyun.am/a/28920655.html 41 Available at http://www.mtad.am/files/docs/1720.pdf 42 https://www.e-draft.am/projects/505
28
3. Formation, powers, and activities of LSGs, participation of civil society
in local governance
3.1 Formation, powers, and activities of LSGs
In 2017 amendments to the Electoral Code were not made and the procedures for elections
of LSG bodies and the nomination of candidates for municipality mayor and avagani remain
unchanged. The tenure in office for the LSGs remained the same, meaning that municipality
mayor and avagani are elected for a five-year term.
In 2017, 69 direct elections of mayors and 58 elections of avaganis through majoritarian
voting were held (Table 4).
Table 4. Number of elections of LSG bodies in 2017, by marzes43
N Marz
Direct elections of mayors Elections of avaganis through
majoritarian voting
Nu
mber
of
ele
ctio
ns
Av
era
ge r
ate
of
vote
r
turn
ou
t
Nu
mber
of
ele
ctio
ns
Av
era
ge r
ate
of
vote
r
turn
ou
t
1 Aragatsotn 8 52.51% 13 37.97%
2 Ararat 11 44.36% 1 67.10%
3 Armavir 3 54.64% 0 -
4 Gegharkunik 7 58.99% 16 46.50%
5 Lori 12 50.29% 10 50.95%
6 Kotayk 9 51.59% 6 49.45%
7 Shirak 8 54.69% 3 54.26%
8 Syunik 6 59.85% 3 59.34%
9 Vayots Dzor 3 72.30% 3 72.30%
10 Tavush 2 62.28% 3 51.65%
Total 6944 56.15% 58 48.95%
In 2017 the voter turnout was low during both the elections of municipality mayor (56,15%)
and members of avagani (48.95%).
2017 elections also include elections of LSG bodies of 34 new (amalgamated) municipalities
formed according to the law on making amendments to the RA law on Territorial Administrative
Division of the Republic of Armenia, adopted on June 9, 2017. In 22 out of 34 municipalities
former mayors of central settlements were re-elected, in 5 municipalities former mayors of non-
center settlements of municipalities were re-elected and in 7 municipalities new candidates or
other former officials were elected as mayors.
43 Source: www.elections.am: 44 February 12 elections of mayor of Vardavanq municipality of Syunik marz failed, as the required number of
voters did not vote for the only nominated candidate. The elections for mayor of Vardavanq municipality were
held again on March 26 2017. Thus, two rounds of elections were held in the mentioned municipality in 2017.
29
In 2017 voter turnout during direct elections of mayor was low, just like in previous years.
Only in 2 municipalities the maximum number of candidates was 6. In one municipality the
number of competing candidates was 5, in 5 municipalities there were 4 candidates, in 8
municipalities 3 candidates and in 21 municipalities only 2 candidates were nominated. It can be
claimed that in 32 out of 69 municipalities (i.e. 46.4% of the municipalities) where direct elections
of mayors were held the competitive environment was missing, given that only one candidate
was nominated45. In the reported period, the average number of candidates nominated for direct
elections of mayor was 1,96.
In 2017 according to the results of direct elections of mayors, the majority of mayors is
affiliated to the RPA or are non-partisan. Thus, 72,1% of the elected mayors of 68 municipalities46
are from RPA, 20,6% are non-partisan and the remaining 7,3% are from PAP or ARF (Table 5)
Table 5. Political affiliation of directly elected mayors in 201747
N Marz
Party
Repu
bli
can
Part
y o
f
Arm
en
ia (
RP
A)
Pro
spero
us
Arm
en
ia
Part
y (
PA
P)
Arm
en
ian
Revolu
tion
ary
Federa
tion
(A
RF)
Non
-par
tisa
n
1 Aragatsotn 5 - 1 2
2 Ararat 9 - - 2
3 Armavir 2 - - 1
4 Gegharkunik 5 - - 2
5 Lori 10 - - 2
6 Kotayk 4 2 - 3
7 Shirak 5 - 2 1
8 Syunik 548 - - -
9 Vayots Dzor 2 - - 1
10 Tavush 2 - - -
Total 49 2 3 14
On May 14, 2017 elections of Yerevan avagani were held. Based on the election results RPA
received 46 mandates (70,8% of total number of mandates), “Yelq” party alliance received 14
mandates (21,5%) and “Yerkir Tsirani” party received 5 mandates (7,7%). The voter turnout
during Yerevan avagani elections was low, amounting to only 40,99%.
As a result of amendments to the RA law on Local Self-Government which entered into
force on January 1, 2017, the procedure of premature termination of mayor’s mandate was
changed. Based on cases prescribed by the law, avagani files a report on premature termination
45 Source: www.elections.am 46 Two rounds of elections were held in Vardavanq municipality of Syunik marz in 2017, that's why the number of
elected mayors is one less than the number of direct elections. 47 Source: www.elections.am: 48 Two rounds of elections were held in Vardavanq municipality of Syunik marz in 2017, that's why the number of
elections presented here is one less.
30
of mayor’s mandate, and snap elections of mayor are appointed by the government within
defined timeframe and procedure. In the past, based on cases prescribed by law, the government
was responsible for premature termination of mayor’s mandate requested by a state official.
According to the law on making amendemnts and additions to the law on Local Self-
Government in the City of Yerevan adopted on October 4, 2017, except for the cases prescribed
by law, the mandate of an avagani member may be terminated prematurely by the decision of
the majority of avagani members, if he/she did not participate in more than half of the meetings
or voting, as well as in half of the committee meetings during one session.
Powers of LSGs
As a result of a number of amendments and additions in the law on RA Local Self-
Government in 2017, mayor’s own powers have changed quantitatively in the sectors of
veterinary and phytosanitary. According to the law on making additions in the law on the RA
Local Self-Government adopted on December 21, 2017, the mayor has been assigned only the
following own power in the mentioned sector: “ensures organization of veterinary service
through the veterinarian of the municipality.”
Some of the LSG powers have been amended. In particular, according to the law on making
additions in the law on the RA Local Self-Government adopted on March 1, 2017, one of the
general powers of the municipality mayor is to participate in the organization of seismic safety
activities and take appropriate measure in this regard. Another power of the municipality mayor
in the sector protection of population in emergency situations and civil defense is to implement
seismic risk reduction measures in the territory of the municipality. According to the law on
making amendments and additions in the law on the RA Local Self-Government adopted on June
9, 2017, the power of avagani is to make decisions on the approval of not only the statutes of
institutions, municipal commercial and non-commercial organizations, the number of employees,
staff lists and pay rates for the positions, but also of the structure of the organization.
According to the law on making amendments in the law on the RA Local Self-Government
adopted on December 21, 2017 the powers of municipality mayor have been changed in the sector
of rights of citizens and economic agents. More specifically, in the formulation “studies citizens'
proposals in the manner prescribed by law” the word “proposals” has been replaced by the word
“petitions”.
According to the law on making amendments and additions in the law on the RA Local Self-
Government adopted in June 9, 2017, the following new powers have been assigned to the
administrative head of the municipality.
submits a proposal to the mayor of the municipality on the appointment or dismissal of the
heads of municipal institutions or organizations within the territory of the settlement.
submits a proposal to the mayor of the municipality on the alienation or use of the municipal
property located in the territory of the settlement.
if authorized by the mayor of the municipality grants permission to organize and deliver
civilian funeral (farewell) ritual services in the territory of the settlement on behalf of the
mayor.
At the same time the following general powers have been assigned to the municipality
mayor:
31
shall consult with the administrative head while appointing or dismissing the heads of
municipal institutions and organizations located in the municipality settlements.
may authorize the administrative head to grant permission to organize and deliver civilian
funeral (farewell) ritual services in the territory of the municipal settlements.
Various amendments have been made in the powers of LSGs of Yerevan, part of which are
aimed at complying those with the RA Constitution and the amendments to the RA law on Local
Self-Government.
According to the RA law on making amendments to the RA law on Local Self-Government
in the City of Yerevan adopted on March 1 2017, the sector “civil defense sector and emergency
situations”, setting out the powers of the mayor, has been renamed into "civil defense and
emergency situations sector".
Major amendments have been made in the RA law on making additions and amendments
to the RA law on Local Self-Government in the City of Yerevan adopted on October 4, 2017.
Thus, as a result of amendment in the power of avagani to appoint a local referendum by
at least half of the total number of votes of its members, now the right of the initiative belongs
to the mayor and at least one third of the total number of avagani (in the past this right belonged
to the mayor and one of the fractions of avagani).
According to another amendment, at the suggestion of the mayor, avagani shall define the
procedure of formation and operation of the advisory boards adjunct not only to the head of
administrative district, but also to the mayor.
A new power has been assigned to avagani, which is, at the suggestions of the mayor, to
define the procedure of exercising their own powers and necessary financial resources to resolve
voluntary issues.
Avagani makes decision on “five-year” development plan of Yerevan, instead of former
“four-year” development plan.
General description of mayor’s authorities:
“mandatory” powers have been reformulated as “own” powers.
mayor’s power “organizes the activities of avagani and municipal administration” has been
edited as follows: “organizes avagani’s activities, implements avagani’s decisions, exercises
general supervision of municipal staff”.
from now on as prescribed by law the mayor appoints and dismisses not only the secretary of
the municipal staff and the heads of the structural divisions, but also the heads of the separate
divisions.
mayor defines the numbering of not only buildings and constructions in Yerevan, but also that
of land plots.
“the mayor shall make a decision regarding the structure, number of employees, staff list and
pay rates for the positions of organizations under Yerevan municipality”.
The mayor shall submit a proposal to avagani regarding the number, title, powers, the
procedure of formation and operation of the advisory boards adjunct not only to the mayor,
but also the head of administrative district.
The following power “other mandatory powers prescribed exclusively by this law” has been
edited as follows: “other powers prescribed exclusively by this law or other laws.” This
formulation, which may seem complicated at first sight allows to assume that other powers
prescribed by other laws may be assigned to the mayor.
Mayor’s “mandatory” powers in all sectors were reformulated as “own” powers.
32
The following powers of the mayor were declared void.
In the sector urban development and communal utilities: “submits the draft general plan of
Yerevan adopted by avagani for the approval of the government” (own power).
In the sector of land use: “ensures the preservation of the geodetic points in the territory of
Yerevan in accordance with the established procedure” (delegated power).
All the three voluntary powers assigned to the mayor in defense sector.
“Nature protection” sector defining mayor’s powers was renamed into “environment
protection.”
For the second time in 2017 the sector “civil defense and emergency situations” was
renamed into “protection of population in emergency situations and organization of civil
defense”.
The article describing mayor’s voluntary powers was altered completely. According to the
mentioned amendments, besides their own and delegated powers, the mayor is assigned with
power to resolve voluntary issues defined by avagani.
According to the law on making an addition to the law on Local Self-Government in the
City of Yerevan, adopted on December 21, 2017, the following own power has been assigned to
the mayor in the sector of veterinary and phytosanitary; “ensures organization of veterinary
services through the veterinarian of the municipality.”
To sum up, as of the end of 2017 the number of own powers assigned to mayors was 116,
and the number of delegated ones was 34. The number of own powers assigned to the mayor of
Yerevan by law was 81 and the number of delegated ones was 19 (Table 6).
Table 6. Quantitative data of mayor’s powers by individual types and sectors
(as of December 31, 2017)
N Sector
Own powers Delegated powers
RA
oth
er
mu
nic
ipali
ties
Yere
van
RA
oth
er
mu
nic
ipali
ties
Yere
van
1 General powers 26 17 3 1
2 Finances 8 7 0 0
3 Defense 3 3 2 0
4 Protection of population in emergency
situations and civil defense 2 2 7 0
5 Urban development and communal utilities 22 13 0 1
6 Land use 6 1 3 3
7 Transport (and road construction)* 4 4 1 2
8 Commerce and services 9 2 0 0
9 Education, culture and youth issues 5 2 1 1
10 Health, physical education and sports 4 3 2 4
11 Social protection 5 1 1 1
12 Veterinary and phytosanitary 2 1 6 4
13 Environment protection 1 4 2 2
14 Rights of citizens and economic agents* 5 0 6 0
15 Participation of civil society in local governance* 4 0 0 0
16 Agriculture* 4 0 0 0
17 Tourism* 6 0 0 0
18 Relations with avagani* 0 10 0 0
19 Public order protection* 0 4 0 0
33
20 Electronic communication, electricity supply,
water supply, gas supply* 0 2 0 0
21
Relations between republican authorities of
executive power and their territorial services in Yerevan*
0 5 0 0
Total 116 81 34 19
*) The sectors and the names of sectors of powers of municipal mayors in the RA law on Local Self-Government differ
from those reflected in the RA law on Local Self-Government in Yerevan. In case the names are different, but the sectors
are the same, the differences are marked in parentheses and in case the sectors are different, they are written in separate
lines (lines 14-21).
Decision-making in municipalities
In 2017 local referendums were not organized in any of the municipalities.
In 2017 within a USAID funded project CFOA expert team developed and published a guide
on the “Organization and implementation of the initiative to include a question on the agenda of
the avagani session”, and the practical application of the initiative by the residents to include a
question on the agenda of the avagani session continued. In 2017 Dilijan, Vedi and Yeghegnadzor
were pilot municipalities for this kind of initiative.49
3.2. Participation of civil society in local governance
As of January 1, 2018, the State Register Agency of Legal Entities of Staff under the Ministry of Justices maintains records of 3815 non-government organizations, 1119 foundations, 774 trade
unions and 81 political parties.50 There is no official data on the number or territorial distribution of non-government
organizations operating in the local self-government sector. There is no official information on territorial distribution of media outlets either. According to the report of Freedom House international watchdog organization, the progress assessment in democratization in Armenia has declined a little from 5.36 units in 2016 to 5.43 units in 2017 (in the scale of 7, whereby the best indicator is 1 and the worse is 7). The ratings in the section of Local Democratic Governance has decreased as well from 5.75 units in 2016 to 6.0 units in 2017. The rating for the Civil Society section has remained unchanged, i.e. 3.75units.51
Accessibility of information on LSG activities
There were no LSG representatives in “the black list” published by Freedom of Information
Center NGO both in 2016 and in 2017. Representatives of local self-government bodies did not
receive any award at the "Golden Key, Rusty Lock" award ceremony held by the same
organization every year. 52
As of 2017 there were 30 municipalities equipped with possibility for online broadcasting of
avagani sessions and other events of municipal importance53.
49 Source: www.cfoa.am ։ 50 Source: the State Register Agency of Legal Entities of Staff under the Ministry of Justices 51 Source: www.freedomhouse.org, Nations in Transit 2018: 52 Source: www.foi.am։ 53 Source: www.mtad.am, List of municipalities provided with online broadcasting opportunities for avagani
sessions and other events of municipal significance: Ashtarak, Ararat, Artashat, Masis, Armavir, Edjmiadzin,
Paraqar, Gavar, Sevan, Vanadzor, Alaverdi, Tashir, Tumanyan, Spitak, Stepanavan, Abovyan, Yeghvard,
34
In 2016 Armenia took over and in 2017 continued to implement third action plan of Open
Government Partnership (OGP).54 One of the components of the project refers to the local
governance “Municipal decision portal: creating a common legal information system for decisions
of avagani and mayor”55.
Based on preliminary discussions on the implementation of this commitment it was
considered more appropriate not to create a new separate platform, but to include already
existing decisions with a lot of operational capacities in the Armenian Legal Information System
(ARLIS), (www.arlis.am), a legal act database without investing additional resources. As a result
www.arlis.am web-page now features “LSG acts” section, including all the normative legal acts
adopted by LSG bodies from 2003 to 2017.56
Complaints regarding LSG performance
The quantitative analysis of the complaints submitted to Human Rights Defender in 2017
shows that 323 complaints were addressed to the Yerevan municipality and 139 to municipalities
of marzes.57
Hrazdan, Charentsavan, Gyumri, Artik, Goris, Meghri, Sisian, Tatev, Kapan, Jermuk, Vayq, Dilijan, and Ijevan
municipalities. 54 Open Government Partnership (OGP) was launched in 2011 on the initiative of 8 countries (Brazil, Indonesia,
Mexico, Norway, the Philippines, South Africa, the United Kingdom and the United States): Open Government
Declaration states that OGP aims to promote transparency, empower citizens participation in public
administration, increase transparency and accountability of authorities. 55 Before this commitment entered into force, decisions of avaganis were posted on various official web-pages, more
specifically they were published on official web-pages of marz administrations in PDF format. When referring to
the legal act, the number and date when the mentioned act was adopted were mentioned, which made it
practically impossible to use “search” tool using other key words. There was no common platform allowing to post
the mentioned decisions online. Thus, the government has undertaken the responsibility to ensure accessibility of
LSG decisions, create “search” tool, make it easier to use and increase the transparency of municipal activities. 56Open Government Partnership, Mid-term self-assessment report of the Armenia third action plan (2016-2018),
September 2017. 57 Source: Annual report of the Armenian Human Rights Defender on the ombudsmen office activity, state of
human rights and freedoms protection in 2017, Yerevan.
35
4. Municipal assets, development programs and financial autonomy
In the course of 2017 the legislation on municipal finances, assets, development projects and
budgeting did not undergo any amendments.
According to the RA decree 1288-N, adopted on October 5, 2017, the order of registration
of taxpayers as well as real estate tax and vehicle property tax by LSGs was defined.
4.1. Municipal Assets
As in previous years, the major source of replenishing municipal assets (including Yerevan)
in 2017 was the municipal expenditures incurred on capital or non-financial assets (see Table 7).
The expenditure volume of non-financial assets has demonstrated a downward trend during
recent years. The year of 2017 was no exception, when the mentioned index dropped by 768.2
million AMD or 5.9% as compared to the previous year. As in previous years, 98.7% of these
expenditures reflect on fixed assets within which the share of buildings and structures is the
highest reaching 76.3%. The expenditure on capital renovation of buildings and constructions
decreased, equaling 56.3% (64.1% in 2016). In parallel with a slight increase in the expenditures
on acquisition and construction of buildings and constructions and their share in expenditures on
non-financial assets as compared to the previous year, the investments in these spheres are still
low. As compared to the previous year, expenditures on vehicles and other equipment, fixed
assets and inventories and their share in non-financial assets expenditures increased. The
expenditures on non-produced assets remain small, and the expenditures on high-value assets
have not been incurred again.
Based on a number of the RA government decrees land plots, property and financial means
were donated to the municipalities and in a number of cases the means derived from the
privatization of state-owned property were fully or partially granted to the programs
implemented in the municipalities. Public schools and municipal infrastructures have been
repaired through state budget allocations to the regional administrations.
The RA government issued decrees on recognition of exclusive public interest over several
land plots within administrative borders of municipalities.
Irrespective of a slight increase (12.6%) in 2017 as compared to the previous year, the receipts
on sales of non-financial assets of municipalities declined by 7.7% during the previous 3 years
(Table 8), mainly because of lack of fixed assets and lands available for sale. In 2017 the receipts
on sales of non-financial assets were almost completely received from the sale of fixed assets
(13.3%) and lands (86.7%). There were no receipts from high value assets and inventories.
36
Table 7. Municipal expenditures on non-financial assets (including Yerevan), 2015-2017
Line Contents
2015 2016 2017
Amount, mln AMD
Share, % Amount, mln AMD
Share, % Amount,
mln AMD
Share, %
1 2 3 4 5 6 7 8
5000 EXPENDITURES ON
NON-FINANCIAL ASSETS, total
16649.1
100
13057.8
100
12289.6
100
5100 including
1.Fixed assets
16449.0
98.8
12931.7
99.0
12132.4
98.7
5110 including
Building and construction
13824.8
83.0
10712.9
82.0
9382.1
76.3
5111 of which: acquisition of buildings
and constructions
3364.1
20.2
49.0
0.0
66.7
0.5
5112 -construction of buildings
and structures
2440.4
14.7
2298.0
17.6
2391.5
19.5
5113 -capital renovation of
buildings and constructions
8020.3
48.2
8365.9
64.1
6923.9
56.3
5120 Vehicles and equipment
2075.8
12.5
1812.9
13.9
2223.3
18.1
5121 of which- transport equipment
484.6
2.9
445.8
3.4
505.2
4.1
5122 -administrative
equipment
612.0
3.7
586.9
4.5
559.8
4.6
5123 -other vehicles and
equipment
979.2
5.9
780.2
6.0
1158.3
9.4
5130 Other fixed assets 548.4 3.3 405.9 3.1 527.0 4.3
5200 2. Inventories 162.1 1.0 124.3 1.0 155.1 1.3
5300 3. High value assets 1.7 0,0 0.0 0.0 0.0 0.0
5400 4. Non-produced assets 36.3 0.2 1.8 0.0 2.1 0.0
5411 including land 36.3 0,2 1.8 0.0 2.1 0.0
As of 1 January 2017, according to the data of the State Register Agency of Legal Entities of
the RA Ministry of Justice, 1324 municipal non-commercial organizations were registered, which
is 3 organizations less than the previous year. The number of commercial legal entities fully (100%)
owned by municipalities decreased by 2, equaling 421, while the number of commercial legal
entities holding shares of both the state and municipality decreased by 1, equaling 212.
As mentioned in previous reports the main part of the municipal assets was built or acquired
decades ago and has undergone physical and moral wear-and-tear in recent years. The situation
did not change much in 2017 either and the main part of the property needs repairing, however
municipalities still lack necessary resources.
37
Table 8. Receipts on sales of non-financial assets of municipalities (including Yerevan), 2015–2017
(in mln. AMD)
Line Contents 2015 2016 2017
1 2 3 4 5
6000 RECEIPTS ON NON-FINANCIAL ASSETS, total 7547.3 6187.1 6966.3
6100 including: on sale of fixed assets 736.5 716.6 925.8
6110 including: receipts on sales of immovable property 584.2 517.9 627.1
6120 receipts on sales of movable property 0.9 0.3 3.2
6130 receipts on sales of other fixed assets 151.4 198.4 295.5
6200 Receipts on sales of inventories 0.0 0.0 0.0
6300 Receipts on sales of high value assets 0.4 0.0 0.0
6400 Receipts on sales of non-produced assets 6810.4 5470.5 6040.5
6410 including: receipts on sales of land 6810.4 5470.5 6040.5
4.2. Municipal development plans and budgeting processes
The local government system of Armenia was established 20 years ago, however it cannot
be considered as fully developed and is in a fragile state. Moreover, the ongoing changes require
new situational and prospective solutions and it is often neglected that municipal development
planning is an important tool for building and developing the local government.
As mentioned many times before long-term planning of municipal development in the local
government system of Armenia is not defined by the law and is not yet used widely either. There
were no changes in this regard in 2017.
In contrast to long-term planning, five-year municipal development plans (FYMDP), as a
form of interim planning, are drafted in all municipalities. This is required by law, which also
defines development and management methodology and methodological guidelines of FYMDPs.
However FYMDP, as an important municipal program document is still in the development stage
and additional measures are required to make it blueprints for future activities in the budgeting
process and management, especially for introduction of program budgeting and management.
The monitoring and evaluation systems featured in FYMDPs adopted by avaganis are still in their
early stage of development, without which realistic planning of municipal development, the
implementation of these plans and evaluation of results are impossible and meaningless.
In 2017 there were no essential changes in budgeting processes of municipalities.
The number of small municipalities with budget means sufficient only for maintenance of
staff is still very high. These municipalities usually do not have qualified specialists, and the
budgets are drafted as an outlay reflecting revenues and expenditures, without any serious
analyses and development programs.
The situation has changed slightly recently in consolidated and newly formed multi-
settlement municipalities, where FYMDPs and budgets reflect improvement of financial situation.
Based on the RA government program adopted in June 2017 the main focus of municipal
budgeting and financial management reforms are the implementation of program budgeting in
municipalities and the strengthening of links between budgets and FYMDPs, as well as consistent
increase of own income share in municipal revenues. It is envisaged to gradually introduce
program budgeting in the period between 2017-2022 by defining vision, sectorial (program) goals
and final outcomes, programs and activities of the municipality. Starting from 2018, it is
38
anticipated to implement a new subsidy policy, providing a subsidy to municipalities, which have
submitted best programs on competitive bases. Starting from 2019, it is expected to implement a
comprehensive multi-faceted system of financial equalization.
Certain activities were implemented in this regard in 2017. More specifically, within Local
Government Development Program in South Caucasus implemented by German Agency for
International Cooperation-GIZ, CFOA implemented two projects “Development of 2018 annual
work plans (AWP) in 18 multi-settlement municipalities” and “Assisting to draft 2018 program
budgets of newly formed 18 multi-settlement municipalities.” "Municipal AWP development and
management guidelines" and "Program budgeting methodology in the local government system
of Armenia" documents58, sample templates of AWP and program budgets, training materials
(modules) and other related documents were developed and trainings for representatives of 18
multi-settlement municipalities were organized and conducted. With the help and direct
participation of CFOA experts, 2018 AWP and program budgets for 18 multi-settlement
municipalities were drafted, public discussions were held and the final drafts were submitted for
the discussion and approval of avaganis. In regard to the activities aimed at introducing program
budgeting in municipalities, it is worth mentioning that AWPs drafted based on FYMDPs served
as basis to present the budget in program format and can increasingly contribute to organization
and implementation of mid and long-term municipal development planning.
4.3. Municipal budget revenues
In 2017 total budget revenues of Armenian municipalities amounted to 126554.0 million
AMD (128623.6 million AMD in 2016), recording a decline for the first time since the local
government system was established in Armenia in 1996 (decreasing by 2069.6 million AMD or
1.6 %). This is mainly conditioned by considerable decrease (8295.1 million AMD or 21.4%) of state
budget allocation for implementation of LSG delegated powers. (Table 9)
Table 9. Types of municipal budget revenues and their shares in total revenues, 2015-2017
Revenues
2015 2016 2017
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
1 2 3 4 5 6 7 8
1000 Total revenues 128225.2 100 128623.6 100 126554.0 100
1100 including
1.Taxes and duties
23790.3
18.6
24553.6
19.1
26754.3
21.1
1110 including
1.1 Property taxes on immovable
property (including land tax)
9537.1
7.4
9463.4
7.4
10103.0
8.0
1121 1.2. Property taxes on vehicles 9795.9 7.6 10657.5 8.3 11653.0 9.2
1131 1.3. Local duties 3760.1 2.9 3748.3 2.9 4240.0 3.3
1161 1.4. State duties 697.2 0.5 684.4 0.5 758.3 0.6
1200 2. Official grants 59435.1 46.4 55311.7 43.0 57220.7 45.2
58 http://www.mtad.am/hy/methodological-guides/
39
1300 3. Other revenues 44999.8 35.1 48758.3 37.9 42579.0 33.7
1342 including: state budget allocations to
municipalities for implementation of
delegated powers 34827.0 27.2 38684.9 30.1 30389.8 24.0
1392 Transfers from reserve fund of the
administrative budget to the fund
budget of municipalities
4149.6
3.2
1036.2
0.8
1519.7
1.2
In parallel with the decline in total revenues, revenues in certain budget lines increased, as
well as their share in total revenues as compared with the previous year.
In 2017 the own revenues of municipalities amounted to 38463.7 million AMD (versus
34402.3 million AMD in 2016), or 30.4% of total revenues (versus 26.7% of the previous year). In
general, the own revenues of municipalities increased by 4061.4 million AMD (11.2%), and their
share increased by 3.7%. The abovementioned data come to prove that municipalities in Armenia
remain highly dependent on official grants, irrespective of recorded increase in own revenues.
Municipal budget revenues increased 6 times during the period between 2000-2010 and in
the period between 2011-2017, the increase was only by 45 % (Figure 3). The abovementioned
data show that the existing resources are not sufficient for future development of municipalities
and new income sources are required.
Figure 3. Dynamics of municipal budget revenues, 2000, 2010-2017 (million AMD)
Conditioned by decline in state budget allocations to LSGs for implementation of delegated
powers, which are mainly allocated to Yerevan municipality (99.9% in 2017, 99.0% in 2016),
decreased by 4852.0 million AMD or 6.3% as compared to the previous year. In spite of significant
decrease in Yerevan municipal budget revenues, its share in total revenues of municipal budgets
is remarkable equaling 57.3% (60,1% in 2016) (Table 10).
2000 2010 2011 2012 2013 2014 2015 2016 2017
mln AMD 13854.6 84933.8 87342.4 95515.8 105802.4 114359.1 128225.2 128623.6 126554.0
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
110000
120000
130000
140000
mil
lio
n A
MD
40
Table 10. Share of Yerevan budget revenues in total revenues of municipal budgets of Armenia
in 2017
Revenues
Total
municipal budget
revenues,
mln AMD
Including
Yerevan
budget
revenues,
mln AMD
Share of
Yerevan
budget
revenues (%)
1 2 3 4 5
1000 Total revenues 126554.0 72479.1 57.3
1100 Including
1. Taxes and duties
26754.3
15010.9
56.1
1110 Including
1.1. property taxes on immovable property 10103.0 5018.5 49.7
1111 Including
property tax on buildings and constructions 5933.6 4396.9 74.1
1112 Including
land tax 4169.4 621.6 14.9
1120 1.2. Property taxes on other properties 11653.0 6116.2 52.5
1121 Including
vehicles 11653.0 6116.2 52.5
1131 1.3. Permit fees for the use of products and
business activity: including local duties
4240
3467.2
81.8
1150 1.4. Including other local duties 30.1 27.0 89.7
1160 1.5. Other mandatory payments 758.3 409.0 53.9
1200 2. Official grants 57220.7 21776.2 38.1
1300 3. Other revenues 42579.0 35692.0 83.8
1342 including: state budget allocations to
municipalities for implementation of
delegated powers
30389.7
30361.4
99.9
1392 Transfers from reserve fund of the
administrative budget to the fund budget of
municipalities 1519.7 382.0 25.1
1393 Other revenues defined by law and other legal
acts 835.7 283.4 33.9
In 2017 municipal budget revenue structure did not undergo any significant changes (Figure
4). As in previous years, in 2017 no deductions have been made to the municipalities from income
tax, profit tax and environmental payments paid to the state budget.
41
Figure 4. Types of RA municipal budget revenues and their shares in total revenues in 2017
Official grants (financial equalization subsidies from the state budget and earmarked
allocations form the state budget to finance current expenditures (subventions)) increased by
1909.0 million AMD or 3, 5% as compared to the previous year (see Table 11).
Other subsidies from the state budget have declined by 31.6 times, and earmarked
allocations from the state budget to finance current expenditures (capital subventions) has
dropped by 19.1% as well as their share in official grants.
According to a number of government decrees financial resources from reserve fund of the
state budget have been allocated to marzpetarans and municipalities.
Table 11. Official grants as revenues of municipal budgets in 2015-2017
Revenues
2015 2016 2017
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
Am
ou
nt,
mln
AM
D
Sh
are
in
tota
l (%
)
1 2 3 4 5 6 7 8
1200 2. Official grants 59435.1 100 55311.7 100 57220.7 100
1210 including 2.1 Current official foreign grants received from other states
0.8
0
9.1
0
0.8
0
1220 2.2 Capital official foreign grants received from other states
0
0
0
0
0
0
1230 2.3 Current official foreign grants received from international organizations 0 0 0 0 15.4 0
1240 2.4 Capital official foreign grants received from international organizations
0
0
22.0
0
43.6
0.1
Property taxes on immovable property (including land tax)
8.0%Property taxes on vehicles
9.2%
Local duties3.3%
State duties0.6%
Official grants45.2%
Other revenues33.7%
42
1250 2.5 Current official domestic grants received from other levels of government
58481.4
98.4
55015.6
99.5
56946.5
99.5
1251 of which
a) financial equalization subsidies from the state
budget
44018.7
74.1
47074.1
85.1
48016.3
83.9
1254 b) other subsidies from the state budget 4340.9 7.3 1679.1 3.0 53.2 0.1
1257 c) earmarked allocations from the state budget (subventions)
10121.8 17.0 6262.4 11.3 8877.0 15.5
1260 2.6. Capital official domestic grants, received from other levels of government
952.9
1.6
265.0
0.5
214.4
0.4
1261 including a)earmarked allocations form the state budget to
finance capital expenditures (subventions)
952.9
1.6
265.0
0,5
214.4
0.4
1262 b) official grants received from other municipalities of Armenia to finance capital expenditures
0
0
0
0
0
0
In 2017 current foreign grants were received from international organizations in an amount
of 15.4 million AMD and capital foreign official grants, in an amount of 43.6 million AMD. Foreign
official grants from other states decreased abruptly, amounting to 0.8 million AMD and capital
foreign official grants were not received.
Following a sharp decrease in 2016, fund budget revenues increased by 620.8 million AMD
or 44,3% as compared to the previous year. Irrespective of slight increase, the share of fund
budget revenues in total remains low (1,6%). Major share of fund budget revenues (75,1%) and
92,7% in Yerevan are transfers form reserve fund of the administrative budget to the fund budget
of municipalities (Table 12).
Table 12. Fund budget revenues of the RA municipalities and the share of Yerevan fund budget
revenues in 2017
Line Revenues
Total
Municipalities
(mln. AMD)
Including
Yerevan
(mln. AMD)
Share of
Yerevan (%)
1 2 3 4 5
1000 TOTAL REVENUES 2022.3 412.0 20.4
1200 2. OFFICIAL GRANTS 258.1 2.8 1.1
1300 3. OTHER REVENUES 1764.2 409.2 23.2
1380 3.8 Capital non-official grants 246.6 23.0 6.3
1392 Transfers form reserve fund of the
administrative budget to the fund budget of
municipalities 1519.7 382.0 25.1
At the beginning of 2017, the retained earnings of municipal budgets amounted to 7711.8
million AMD, including administrative budget -233,3 million AMD and fund budget -7478.5
million AMD. The retained earnings were mainly directed to the fulfillment of obligations, subject
to financing still in the previous year as well as acquisition of bonds and other capital.
In 2017 the total municipal budget surplus was 2160.2 million AMD, of which the
administrative budget surplus was 5461.9 million AMD, whereas the fund budget deficit was -
3301.7 million AMD. This deficit was financed mainly at the expense of retained earnings of
municipal budgets of the beginning of the financial year, as well as administrative budget surplus.
43
4.4. Debt management
In 2017 the municipalities did not receive any loans from external sources, or borrowings
from other municipalities.
Also, in the reported period no rules of procedure regarding issuing and allocating municipal
bonds were adopted and the municipalities did not issue any bonds during the period.
4.5 Financial Accountability
In 2017 the reports produced by municipalities were submitted to competent authorities
(avaganis, marzpets, etc.), as required by legislation and in most cases according to the established
deadlines.
In the reported period with a view to ensure publicity and transparency of municipal
budgets almost all the documents required by law (the quarterly and annual reports, approved
budgets and changes made therein) were published on the billboards or posted in visible locations,
official web-pages. The number of municipalities, which have an opportunity to broadcast the
information on TV or publish these documents in local newspapers, is still few.
In 2017 internal audit system (has been introduced since 2012) operated in 43 municipalities
and in 157 municipalities internal auditing was delegated to private companies.
Out of 71 internal auditor positions on the staff lists of municipalities 67 are occupied, 46
out of which are qualified specialists and 18 are still undergoing trainings. The RA Ministry of
Finance organized trainings for operating auditors and testing of training participants was carried
out.
The situation has not changed in small and medium-size municipalities, which did not
undergo internal audit and still lack a position of an internal auditor on their staff lists. The reason
is the same as it used to be: there is a lack of respective specialists and necessary resources.
Irrespective of certain activities, the situation has not changed much even in the
municipalities where internal audit system has been introduced, and internal auditing is just a
formality.
There are very few municipalities carrying out external audit.
44
5. Relevance of LSG responsibilities and municipal finances
Based on the international experience in estimating relevance of financial resources and
LSG responsibilities, below are results for 2017 of the evaluations according to previously selected
financial indicators.
Shares of local budgets in total public spending and gross domestic product (GDP)
characterize the level of decentralization in the country under review59.
In Member States of the European Union the average share of only local budget
expenditures (without regional level) in total public spending was 23.3% and 10.8% in GDP (see
Table 13).
Table 13. Shares of local budget expenditures in total public spending and GDP (2017 data) in
Armenia and Member States of the European Union60
Member States Local budget expenditures in
public spending (%)
Local budget expenditures in
GDP (%)
Denmark 65,0 34,8
Sweden 50,6 25,0
Finland 40,4 22,6
Netherlands 31,7 14,5
Poland 31,3 12,9
Italy 28,9 14,3
Romania 26,6 9,0
Czech Republic 25,8 10,2
Latvia 25,4 9,5
Croatia 24,5 11,5
The Great Britain 24,2 10,1
Average of EU MS 23,3 10,8
Estonia 23,1 9,4
Lithuania 22,9 7,8
France 19,8 11,1
Bulgaria 19,7 6,9
Slovenia 18,2 8,2
Germany 18,0 8,0
Austria 16,8 8,5
Slovakia 15,8 6,6
Spain 13,7 5,8
Belgium 13,3 7,1
Hungary 12,9 6,0
Portugal 12,6 5,7
Luxembourg 11,7 4,9
*Armenia 8,1 2,23
Ireland 7,6 2,0
Greece 7,1 3,5
Cyprus 3,8 1,4
Malta 1,0 0,6
59 Public spending in Armenia encompasses expenditures of consolidated budget, and GDP means nominal GDP. 60 Source: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_10a_main&lang=en
45
In 2017 share of aggregate municipal budgets in consolidated budget of Armenia was
9.9% in revenues and 8.1% in expenditures (see Appendix 5). As compared to the previous
year, the indicator for revenues decreased by 0.8%, while the indicator for expenditures by 0.7%.
Armenia lags significantly behind the EU Member States in respect of these indicators,
approximately 2.9 times less than European average, and is ahead of only Ireland, Greece,
Cyprus, and Malta.
The share of aggregate municipal budget expenditures in the country’s GDP in 2004-
2009 fluctuated within the range of 1.3-1.7%, 2.3-2.57% in 2010-2016, while in 2017, in comparison
with 2016, it decreased by 0.33%, making 2.23%61. This indicator is about 4.8 times less than
European average and is only higher than that for Ireland, Cyprus and Malta.
Thus, it can be stated that the level of decentralization in Armenia in 2017, in comparison
with 2016, decreased and continues to be significantly lower than that in the EU countries.
Actual execution of revenues of all 2017 municipal budgets of Armenia (including Yerevan)
versus annual approved plans is 92.7%, while versus annual adjusted plans is 99.5%. In case of
expenditures, actual execution of all 2017 municipal budgets of Armenia (including Yerevan)
versus annual approved plans is 87.8% while versus annual adjusted plans is 92.5% (see Table 14).
Comparing data on actual execution of budget revenues and expenditures of all
municipalities in Armenia (including Yerevan) in 2017 with the same indicators of 2016, it is easy
to note that both revenue and expenditure data of 2017 are substantially lower than that of 2016.
This means that as compared to the previous year, the overall budget execution of municipalities
deteriorated in 2017 both in terms of revenues and expenditures.
Table 14. Annual approved, adjusted plans of total revenues, expenditures, surplus/deficit and
actual execution of municipal budgets of Armenia in 2017 (in thousand drams)62
N
Article
2017
Annual approved
plan
Annual adjusted plan
Actual
Percent of execution
versus approved plan, %
Percent of execution
versus adjusted plan, %
All municipal budgets of Armenia
1 Total revenues 136,557,862.6 127,244,485.9 126,554,009.6 92.7 99.5
2 Total expenditures 141,741,433.0 134,438,797.7 124,393,783.4 87.8 92.5
3 Surplus (+) or deficit (-) -5,163,570.5 -7,194,311.9 +2,160,226.2 x x
Including budget of Yerevan
1 Total revenues 84,344,931.5 72,289,608.7 72,479,069.8 85.9 100.3
2 Total expenditures 84,412,931.5 73,199,819.0 70,990,187.0 84.1 97.0
3 Surplus (+) or deficit (-) -68,000.0 -910,210.3 +1,488,882.8 x x
Including budgets of all municipalities except Yerevan
1 Total revenues 52,212,931.1 54,954,877.2 54,074,939.8 103.6 98.4
2 Total expenditures 57,328,501.5 61,238,978.7 53,403,596.4 93.2 87.2
3 Surplus (+) or deficit (-) -5,095,570.5 -6,284,101.6 +671,343.4 x x
61 Annual nominal GDP of Armenia at current prices in 2017 was 5,580.1 billion AMD, source: www.armstat.am 62 Sources: www.minfin.am and www.yerevan.am
46
Actual execution of revenues of 2017 municipal budget of Yerevan versus the annual
approved plans was 85.9%, while versus annual adjusted plans was 100.3%. In the case of
expenditures, execution of 2017 Yerevan municipal budget versus the annual approved plan was
84.1% and 97.0% versus annual adjusted plan. Execution indicators of revenues and expenditures
of 2017 municipal budget of Yerevan versus the approved plan are relatively lower than the same
indicators of all municipalities (including Yerevan) while versus the adjusted plan they are higher
than the same indicators of all municipalities (including Yerevan).
Comparing the actual execution of revenues and expenditures of approved and adjusted
budgets of Yerevan in 2017 with the same indicators of 2016, it becomes obvious that indicators
in 2017 are respectively lower than in 2016.
Execution of budget revenues of all municipalities (excluding Yerevan) versus 2017
approved and adjusted annual plans was 103.6% and 98.4% respectively, and execution of budget
expenditures of all municipalities (excluding Yerevan) versus 2017 approved and adjusted annual
plans was 93.2% and 87.2% respectively. This means that municipalities continue to have certain
issues related to accurate forecast, planning, adjusting and execution of budget revenues and
expenditures.
In fact, execution level of 2017 adjusted budget revenues and expenditures of all
municipalities (excluding Yerevan) was lower than the same indicator of all municipalities
(including Yerevan).
Important relative indicators of financial adequacy of municipalities include per capita
revenues and expenditures of municipal budgets. Per capita actual revenues of municipal
budgets (including Yerevan) in 2013-2016 (see Table 3, and Figure 1) in absolute terms have
significantly increased over the years, however it decreased in 2017, making 42,569 AMD (88.1
USD). Per capita actual expenditures of municipal budgets (including Yerevan) in 2013-2016 (see
Table 15, and Figure 6) in absolute terms was increasing, but it decreased in 2017, making 41,843
AMD (86.6 USD).
Table 15. Per capita revenues and expenditures of municipal budgets of Armenia in 2013-2017 (in
AMD and USD)*
Indicators 2013 2014 2015 2016 2017
Total number of population in Armenia (including Yerevan)
as of the end of the year (thousand people) 3,017.1 3,010.6 3,001.4 2,986.1 2,972.9
Total number of population of Yerevan as of the end of the
year (thousand people) 1,068.3 1,071.5 1,072.4 1,075.8 1,076.4
Total number of population in Armenia (excluding Yerevan)
as of the end of the year (thousand people) 1,948.8 1,939.1 1,929.0 1,910.3 1,896.5
Average exchange rate of US dollar (AMD) 410 416 478 481 483
Consumer price index (annual, %) 105.8 103.0 103.7 98.6 101.0
Per capita actual revenues (AMD) of municipal budgets of
Armenia (including Yerevan) 35,068 37,985 42,722 43,074 42,569
Per capita actual revenues of Yerevan municipal budget
(AMD) 59,597 63,475 71,393 71,882 67,335
Per capita actual revenues (AMD) of municipal budgets of
Armenia (excluding Yerevan) 21,621 23,901 26,783 26,851 28,513
Per capita actual revenues (USD) of municipal budgets of
Armenia (including Yerevan) 85.5 91.3 89.4 89.6 88.1
Per capita actual revenues of Yerevan budget (USD) 145.4 152.6 149.4 149.4 139.4
47
Per capita actual revenues of municipal budgets of Armenia
(excluding Yerevan) (USD) 52.7 57.5 56.0 55.8 59.0
Per capita actual expenditures of municipal budgets of
Armenia (including Yerevan) (AMD) 34,182 38,078 43,060 43,589 41,843
Per capita actual expenditures of Yerevan municipal budget
(AMD) 58,187 64,484 71,875 72,951 65,951
Per capita actual expenditures of municipal budgets of
Armenia (excluding Yerevan) (AMD) 21,022 23,487 27,041 26,851 28,159
Per capita actual expenditures of municipal budgets of
Armenia (including Yerevan) (USD) 83.4 91.5 90.1 90.6 86.6
Per capita actual expenditures of Yerevan budget (USD) 141.9 155.0 150.4 151.7 136.5
Per capita actual expenditures of municipal budgets of
Armenia (excluding Yerevan) (USD) 51.3 56.5 56.6 55.8 58.3
*) Sources: www.armstat.am and www.minfin.am
Figure 5. Per capita actual revenues of the RA municipal budgets in 2013-2017 (in AMD and USD)
Per capita actual revenues of 2013-2016 Yerevan municipal budget increased significantly
in absolute terms over the years, but it decreased sharply in 2017, making 67,335 AMD (139.4
USD). Per capita actual expenditures of 2013-2016 Yerevan municipal budget increased in
absolute terms over the years, but it decreased in 2017, making 65,951 AMD (136.5 USD).
Per capita actual revenues of 2013-2017 municipal budgets of Armenia (excluding Yerevan)
have increased in absolute terms over the years, from 21,621 AMD (about 52.7 USD) in 2013 to
28,513 AMD (about 59.0 USD) in 2017. Per capita actual expenditures of 2013-2017 municipal
budgets of Armenia (excluding Yerevan) increased from 21,022 AMD (about 51.3 USD) in 2013 to
28,159 AMD (about 58.3 USD) in 2017.
2013 2014 2015 2016 2017
Thousand AMD 35.068 37.985 42.722 43.074 42.569
USD 85.5 91.3 89.4 89.6 88.1
0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
Thousand AMD USD
48
Figure 6. Per capita actual expenditures of the RA municipal budgets in 2013-2017
(in AMD and USD)
Taking into account the change of consumer price index year by year in Armenia (see Table
15), the total per capita expenditures for service delivery by municipalities did not significantly
change over the last 5 years nor had any positive impact on the general living standards of the
population. Moreover, in some cases, the impact was negative.
A separate group of indicators is represented by the relevance of financial resources with
the LSG powers by sectors of activities or, in other words, the municipal budget expenditures
according to functional classification (see Table 16).
Table 16. Actual budget expenditures of the RA municipalities (including and excluding
Yerevan) and Yerevan municipality, according to functional classification, 2017
N Expenditures
2017
Actual budget expenditures of the RA municipalities
(including Yerevan), thousand AMD
Share, %
Actual expenditure of
Yerevan, thousand AMD
Share, %
Actual budget expenditures of
the RA municipalities
(excluding Yerevan),
thousand AMD
Share, %
Total expenditures*, including 124,393,783.4 100 70,990,187.0 100 53,403,596.4 100
Administrative budget 120,589,545.3 96.9 70,490,782.7 99.3 50,098,762.6 93.8
Fund budget 5,323,932.0 4.3 881,404.3 1.2 4,442,527.7 8.3
1 General public services 29,339,531.2 23.6 7,486,468.9 10.5 21,853,062.3 40.9
2 Defense 45,670.9 0.0 42,245.9 0.1 3,425.0 0.0
3 Public order, security and judicial 678.0 0.0 0.0 0.0 678.0 0.0
4 Economic relations including 9,731,449.6 7.8 9,054,473.2 12.8 676,976.4 1.3
4.1 Agriculture, forestry, fishery and hunting
699,691.0 0.6 45,416.0 0.1 654,275.0 1.2
4.2 Fuel and energy 159,139.6 0.1 0.0 0.0 159,139.6 0.3
4.3 Transport 14,620,968.7 11.8 11,495,195.8 16.2 3,125,772.9 5.9
4.4 Tourism 26,194.6 0.0 16,775.9 0.0 9,418.7 0.0
4.5 Other sectors 78,151.2 0.1 0.0 0.0 78,151.2 0.1
4.6 Survey and drafting in economic relations
2,920.0 0.0 0.0 0.0 2,920.0 0.0
4.7 Economic relations (not classified elsewhere)
-5,855,615.5 -4.7 -2,502,914.5 -3.5 -3,352,701.0 -6.3
5 Environment protection, including 12,207,255.1 9.8 7,580,634.4 10.6 4,626,620.7 8.7
2013 2014 2015 2016 2017
Thousand AMD 34.182 38.078 43.060 43.589 41.843
USD 83.4 91.5 90.1 90.6 86.6
0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
Thousand AMD USD
49
5.1 Waste disposal 9,522,022.1 7.7 5,417,536.5 7.6 4,104,485.6 7.7
5.2 Wastewater removal 71,589.9 0.1 0.0 0.0 71,589.9 0.1
5.3 Fight against environment pollution 84,139.0 0.1 38,683.0 0.1 45,456.0 0.1
5.4 Biodiversity and nature protection 23,092.1 0.0 0.0 0.0 23,092.1 0.0
5.5 Survey and drafting in environment protection
2,122.5 0.0 0.0 0.0 2,122.5 0.0
5.6 Environment protection (not classified elsewhere)
2,504,289.5 2.0 2,124,414.9 3.0 379,874.6 0.7
6 Residential construction and communal utilities, including
8,839,032.2 7.1 4,344,726.6 6.1 4,494,305.6 8.5
6.1 Residential construction 319,609.3 0.3 16,162.3 0.0 303,447.0 0.6
6.2 Municipal development 351,177.8 0.3 0.0 0.0 351,177.8 0.7
6.3 Water supply 1,005,381.3 0.8 12,484.3 0.0 992,897.0 1.9
6.4 Street lighting 4,097,740.8 3.3 2,354,861.0 3.3 1,742,879.8 3.3
6.5 Survey and drafting in residential construction and communal utilities
22,862.6 0.0 13,037.6 0.0 9,825.0 0.0
6.6 Residential construction and communal utilities (not classified elsewhere)
3,042,260.4 2.4 1,948,181.3 2.7 1,094,079.1 2.0
7 Healthcare 283,427.2 0.2 248,993.4 0.4 34,433.8 0.1
8 Recreation, culture and religion 8,667,002.6 7.0 3,678,235.3 5.2 4,988,767.3 9.3
9 Education 42,491,120.4 34.2 27,855,262.6 39.2 14,635,857.8 27.4
9.1 Pre-school education 17,358,883.1 14.0 7,787,866.8 11.0 9,571,016.3 17.9
9.2 Elementary general education 6,881,013.1 5.5 6,766,718.6 9.5 114,294.5 0.2
9.3 Secondary general education 9,272,067.8 7.5 9,165,828.5 12.9 106,239.3 0.2
9.4 Extra-curricular training 8,010,580.4 6.4 3,446,457.4 4.9 4,564,123.0 8.5
9.5 Education (not classified elsewhere) 968,576.0 0.8 688,391.3 1.0 280,184.7 0.5
10 Social protection 3,692,355.2 3.0 1,793,771.6 2.5 1,898,583.6 3.6
11 Reserve funds not classified elsewhere*
9,096,261.2 7.3 8,905,375.2 12.5 190,886.0 0.4
*) Excluding transfers from reserve fund of the administrative budget to the fund budget; in the budgets of the RA
municipalities (including Yerevan) 1,519,693.9 thousand AMD; in Yerevan municipal budget – 382,000.0 thousand
AMD; in the budgets of the RA municipalities (excluding Yerevan)- 1,137,693.9 thousand AMD.
In 2017 the share of general services in total spending of the RA municipalities (including
Yerevan) was 23.6%, which is higher by 1.2% than in 2016 (see Figure 7).
In the reported period, the largest share in total municipal spending is attributed to
education sector, 34.2% (31.2% in 2016), including pre-school education 14.0%, elementary general
education 5.5%, secondary general education 7.5%, extra-curricular training 6.4%, and education
not classified elsewhere 0.8%.
As compared to 2016, in 2017 1.0% increase was recorded in the share of expenditures in
recreation, culture and religion in total expenditures of municipal budgets of Armenia (including
Yerevan), i.e. 7.0% (6.0% in 2016). Shares of 2017 municipal budget expenditures allocated to
other social sectors do not hold any significant share in total spending, namely, 3.0% in social
protection (3.0% in 2016) and 0.2% in healthcare (0.3% in 2016).
In the reported period the share of public economic services of RA municipalities (including
Yerevan) in total municipal spending changed considerably, as compared to 2016. Thus, the
above indicator increased in transport sector, amounting to 11.8 % (9.9% in 2016) driven by the
increase of the same indicator in Yerevan budget (16.2% in 2017 and 12.3% in 2016). This indicator
increased also in environment protection (particularly waste disposal) equaling 9.8% (8.8% in
2016).
50
Figure 7. Shares of actual budget expenditures of the RA municipalities (including Yerevan) in
total municipal spending, 2017 (by functional classification)
As compared to 2016, this indicator decreased significantly in residential construction and
communal utilities sector (water supply, street lighting, etc.), amounting 7.1% (12.9% in 2016)
driven by the decrease of the same indicator of Yerevan budget (6.1% in 2017 and 15.4% in 2016).
Shares of expenditures in the 2017 municipal budgets (excluding Yerevan) by
functional classification significantly differ from shares of expenditures in both municipal
budgets (including Yerevan) and Yerevan budget in total spending. More specifically, share of
general public service expenditures in Yerevan municipal budget (10.5%) is 2.2 times lower than
the same indicator (23.6%) for 2017 municipal budgets of Armenia (including Yerevan) and 3.9
times lower than the same indicator (40.9%) for all municipal budgets of Armenia (excluding
Yerevan).
The share of expenditures in economic relations and education sectors in total spending is
higher in 2017 Yerevan municipal budget (12.8% (10.0% in 2016) and 39.2% (34.8 in 2016)
respectively) than in all municipal budgets of Armenia (including Yerevan). These figures are
mainly conditioned by increase of expenditures in transport sector in Yerevan by 16.2% in 2017
(12.8% in 2016) and execution of respective delegated powers by the state in general and
secondary education sectors and financing of these sectors from the state budget.
Shares of expenditures in the 2017 municipal budgets (excluding Yerevan) by
functional classification (Figure 8) significantly differ from shares of expenditures in both
municipal budgets (including Yerevan) and Yerevan budget in total spending.
Thus, share of general public service expenditures in 2017 municipal budgets of Armenia
(excluding Yerevan) is the highest, i.e. about 40.9% of total spending (41.6% in 2016). The second
largest share of expenditures goes to education sector, namely 27.4% (25.8% in 2016), including
pre-school education (17.9% in 2017 and 16.3% in 2016), extra-curricular training (8.5% in 2017 and
8.4% in 2016). Shares of expenditures in other social sectors incurred by municipal budgets of
Armenia (excluding Yerevan) in 2017 remained almost unchanged as compared to the previous
year. Shares of public economic services incurred by municipal budgets have changed in 2017
General Public Services
24%
Defense0%
Public ordinance, security and judicial
0%
Economic relations8%
Environment protection
10%
Residential construction and
communal utilities7%
Healthcare0%
Recreation, culture and religion
7%
Education34%
Social protection3%
Reserve funds not classified elsewhere
7%
51
and accounted for 1.3% (1.8% in 2016) in economic relations, 8.7% (7.5% in 2016) in environment
protection, 8.5% (9.0% in 2016) in residential construction and communal utilities.
Figure 8. Shares of actual expenditures in the 2017 municipal budgets (excluding Yerevan) in
total spending (by functional classification)
Another indicator of relevance of LSG powers and financial resources is the existence of
non-funded or under-funded powers. There are a number of LSG powers stipulated by the
Law (including in delivery of public services), which in many municipalities are not executed at
all or are executed only partially. The powers in this category include delivery of public services
of vital importance, such as planting, water supply and wastewater removal, environment
protection, communal utilities, etc.
Correlation among types of municipal budget expenditures may be drawn by observing the
economic classification of budget expenditures (see Table 17).
Table 17. Actual budget expenditures of the RA municipalities (including and excluding Yerevan)
and Yerevan municipality in 2017, according to economic classification of budget
expenditures
N Expenditures
2017
Actual budget expenditures of the RA municipalities
(including Yerevan), thousand AMD
Share, %
Actual budget expenditures of
Yerevan, thousand AMD
Share, %
Actual budget expenditure of
the RA municipalities
(excluding Yerevan),
thousand AMD
Share, %
TOTAL EXPENDITURES* (A+B+C) 124,393,783.4 100 70,990,187.0 100 53,403,596.4 100
A CURRENT EXPENDITURES* 119,070,451.4 95.7 70,108,782.7 98.8 48,961,668.7 91.7
1 Remuneration, including 23,381,993.2 18.8 5,788,338.9 8.2 17,593,654.3 32.9
Salaries and bonus payments 23,381,913.2 18.8 5,788,338.9 8.2 17,593,574.3 32.9
Actual social security payments 80.0 0.0 0.0 0.0 80.0 0.0
2 Acquisition of services and goods 24,423,490.9 19.6 13,593,402.1 19.1 10,830,088.8 20.3
3 Interest payments 0.0 0.0 0.0 0.0 0.0 0.0
General Public Services
41%
Defense0%
Public ordinance, security and judicial
0%
Economic relations1%
Environment protection
9% Residential construction and
communal utilities9%
Healthcare0%
Recreation, culture and religion
9%
Education27%
Social protection4%
Reserve funds not classified elsewhere
0%
52
4 Subsidies 47,892,638.6 38.5 34,112,716.5 48.1 13,779,922.1 25.8
5 Grants 5,517,605.5 4.4 811,587.1 1.1 4,706,018.4 8.8
6 Social benefits and pensions 4,425,454.6 3.6 2,531,254.4 3.6 1,894,200.2 3.5
7 Other expenditures*, including 13,429,268.7 10.8 13,271,483.9 18.9 157,784.8 0.3
Reserve funds* 9,096,261.2 7.3 8,905,375.2 12.5 190,886.0 0.4
Transfers from reserve fund of administrative budgets to the fund budget of municipalities
1,519,693.9 1.2 382,000.0 0.5 1,137,693.9 2.1
B NON-FINANCIAL ASSET EXPENDITURES
12,289,604.1 9.9 4,483,914.2 6.3 7,805,689.9 14.6
1 Fixed assets 12,132,409.1 9.8 4,345,647.2 6.1 7,786,761.9 14.6
2 Inventories 155,092.8 0.1 138,267.0 0.2 16,825.8 0.0
3 High-value assets 0.0 0.0 0.0 0.0 0.0 0.0
4 Non-produced assets 2,102.2 0.0 0.0 0.0 2,102.2 0.0
C RECEIPTS ON SALES OF NON-FINANCIAL ASSETS
-6,966,272.1 -5.6 -3,602,509.9 -5.1 -3,363,762.2 -6.3
1 Receipts on sales of fixed assets -925,757.2 -0.7 -549,676.4 -0.8 -376,080.8 -0.7
2 Receipts on sales of inventories 0.0 0.0 0.0 0.0 0.0 0.0
3 Receipts on sales of high-value assets -80.0 0.0 0.0 0.0 -80.0 0.0
4 Receipts on sales of non-produced assets
-6,040,434.9 -4.9 -3,052,833.4 -4.3 -2,987,601.5 -5.6
*) Excluding transfers from the reserve fund of the administrative budget to the fund budget of municipalities
In total spending share of capital/non-financial assets in all municipalities of Armenia
(including Yerevan) in 201763 was 9.4%, while it was 90.6% in case of current expenditures.
Looking at the shares of current and capital expenditures of municipalities of Armenia
(including Yerevan) in total spending for the last 5 years (see Figure 9) it becomes obvious that
in the period between 2013 and 2014 the share of capital expenditures increased from 20.1% to
21.2%, while in 2015 it showed a decreasing tendency reaching 9.4% in 2017.
Figure 9. Shares of current and capital expenditures of municipal budgets of Armenia
(including Yerevan) in total spending for 2013-2017, %
In total spending share of capital/non-financial assets in Yerevan in 2017 was 6.0%, while it
was 94.0% in case of current expenditures.
The share of capital expenditures of Yerevan municipal budget in total spending for the
period between 2013 and 2017(see Figure 10). The same indicators of 2013-2014 Yerevan municipal
63 In order to get the real sum of the total expenditures in Table 5, C) receipts on sales of non-financial assets must
be included in A) the total expenditures with a positive sign.
2013 2014 2015 2016 2017
Capital expenditures 20.1 21.2 12.2 9.6 9.4
Current expenditures 79.9 78.8 87.8 90.4 90.6
0%
20%
40%
60%
80%
100%
53
budget are considerably higher than in all municipal budgets of Armenia (including Yerevan),
however, in the period between 2015 and 2017 these indicators are lower than those of all
municipal budgets of Armenia (including Yerevan).
Figure 10. Shares of current and capital expenditures of Yerevan municipal budget in total
spending for 2013-2017, %
In total spending share of capital/non-financial assets in all municipalities of Armenia
(excluding Yerevan) in 2017 was 13.8%, while it was 86.2% in case of current expenditures.
Looking at the shares of current and capital expenditures of municipalities of Armenia
(excluding Yerevan) in total spending for the last 5 years (see Figure 11) it becomes obvious that
in the period between 2013 and 2014 the share of capital expenditures increased, reaching 15.3%,
while since 2015 it showed a decreasing tendency reaching 13.8 % in 2017.
Figure 11. Shares of current and capital expenditures of municipal budgets of Armenia (excluding
Yerevan) in total spending for 2013-2017, %
From the point of view of effective organization of LSG operations one of the important
financial indicators is the share of municipal servants’ remuneration, i.e. salaries and social
benefits in total expenditures of municipalities. In 2017, the share of actual expenditures on
2013 2014 2015 2016 2017
Capital expenditures 23.4 24.7 10.3 6.9 6.0
Current expenditures 76.6 75.3 89.7 93.1 94.0
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 2017
Capital expenditures 14.7 15.3 14.9 13.6 13.8
Current expenditures 85.3 84.7 85.1 86.4 86.2
0%
20%
40%
60%
80%
100%
54
remuneration and bonuses of municipal servants in all municipal budget of Armenia (including
Yerevan), and that of municipal budget institutions and municipal non-commercial organizations
amounted to 18.8% of total spending (see Table 16). Comparing this indicator with that of 2016
(18.1%), its slight increase in 2017 should be recorded.
In 2017 this indicator was 8.2% (see Table 16) in Yerevan municipal budget, showing its
negative tendency of growth in comparison with the same indicator in 2016 (7.4%).
In 2017, the share of actual expenditures on remuneration and bonuses of municipal
servants in all LSGs of Armenia (excluding Yerevan), and that of municipal budget institutions
and municipal non-commercial organizations amounted to 32.9% of total spending (see Table 16).
Comparing this indicator with that of 2016 (34.3%), its positive tendency of decrease is to be
recorded.
It should be noted that this indicator calculated for all municipalities in Armenia (excluding
Yerevan) is about 4.0 higher than the same indicator for Yerevan. This is driven mainly by two
factors: inflated staffs of the municipalities (excluding Yerevan) and municipal organizations, as
well as scarcity of municipal budget revenues.
According to the provisions set out in the law on Local Self-government, legal supervision
over the implementation of LSG own powers is reserved to the Ministry of Territorial
Administration and Development, exercised either directly or through marzpets. Legal and
professional supervision over the implementation of LSG delegated powers is reserved to the
designated bodies of the RA, within the scope of their jurisdiction, exercised either directly or
through marzpets, in coordination with the MTAD.
In particular, legal and professional supervision over remuneration of municipal servants
may be exercised by the State Labor Inspectorate of the Ministry of Labor and Social Affairs
within the scope of their jurisdiction, as well as by the RA Chamber of Audit during regular on-
site visit to municipalities.
The State Labor Inspectorate exercises state supervision established by law and controls the
compliance of LSGs with the requirements of labor legislation and other normative acts regulating
labor relations in the country. Municipal staffs and organizations in their role of employers are
required to submit quarterly and annual reports to the State Labor Inspectorate on the number
of employees, rates of salaries (by professions), casualties at workplaces and professional diseases
of the staff members.
55
6. Adequacy of administrative structure, human and information resources
to municipal issues, international assistance
6.1 General capacities of LSGs and municipal staff
Analysis of local self-government sector of the RA reveals that professional capacities of the
majority of municipalities are not sufficient to deliver public services fully and in a due quality
and scarce budget resources are only sufficient for maintenance of municipal staff. The scarcity
of budget resources leads to a number serious issues. Driven by the abovementioned the LSGs
are not able to fulfill completely their important role in public administration sector. The need
for reforms in administrative structures of municipal management and lack of qualified human
resources in municipalities require respective solutions based on systematic and comprehensive
approaches.
Functional structure of municipal staff
In the RA local self-government system municipality mayor exercises his/her powers
through the municipal staff (specialists, structural and separate departments), municipal budget
institutions as well as commercial and non-commercial organizations. Meanwhile, the mayor
submits for the approval of avagani the charters of municipal staff, and municipal budget
institutions, as well as structures (in case respective units are designed), the number of employees,
staff lists and rates. After the approval of the above mentioned, within a month’s time the mayor
makes appointments in discretionary positions under his/her own responsibility.
The staff ensures complete and effective execution of powers by the municipality mayor
and avagani. It is a municipal management institution, without a status of a legal entity, the
management of which is reserved to the mayor. The current functions of the staff are managed
by the secretary within the powers reserved to him/ her. The functional structure of the staff
(with the exception of Yerevan, Gyumri, and Vanadzor municipality staffs) may include
structural and separate departments in the form of “units”. 64
In the reported period, the most essential structural changes in municipal staffs were related
to amalgamation of municipalities and introduction of institution of an administrative head in the
newly formed multi-settlement municipalities. On June 9, 2017 the RA National Assembly
adopted the Law on making amendments and additions to the RA Law on Administrative and
Territorial Division of the Republic of Armenia, and laid the foundation for the third phase of
amalgamation of municipalities. 325 municipalities were amalgamated in 8 marzes of Armenia,
resulting in the formation of 34 new multi-settlement municipalities. It should be noted, however,
that in 2017, only the staffs of municipalities formed during the first two amalgamation stages
were operating fully.
Studies show that the majority of administrative heads of settlements in amalgamated
municipalities are former mayors, but obviously, they cannot substitute the former municipality
mayors, in a sense that the latter previously had distinct powers defined by the law, which have
now almost entirely been reserved to the mayor of amalgamated municipalities leaving the
administrative heads of settlements with limited powers. 65 In this regard, it is necessary to address
64 Article 33, RA law on Local Self-government 65 Articles 21,32 , RA law on Local Self-government
56
one problematic aspect of the current model of amalgamation. It was logical and anticipated that
the most disadvantaged part of the amalgamation policy would be the mayors of the amalgamated
municipalities who were deprived of their former status. In order to mitigate this dissatisfaction,
former mayors, as mentioned above, are often appointed as administrative heads of the respective
settlement of the amalgamated municipality. As the experience shows, even in this case most of
the former mayors are extremely dissatisfied with new and, in their opinion, "uncertain" status.
It appears that the person who opposes the reform assumes a position emerged as a result of the
same reform, and as a consequence he/ she is not interested in the progress of the reform while
exercising his/her new official duties, and will try to prove how negative this change was (it should
be noted, that such cases are already in place, working unwillingly, deliberately delaying
provision of documents to the residents, not taking an active part in exercising the powers of the
mayor to solve residents’ issues etc.).
Due to the amalgamation of municipalities, in addition to the structural changes of the
municipal staff, select structural changes have occurred in municipally-owned organizations (in
particular, in the sector of utilities, education, culture, etc.).
The indicators on education level of mayors underwent certain changes. As it is known, the
RA legislation does not define any education level for mayors, but the majority of mayors have
higher education. As of December 31, 2017, 345 out 502 municipality mayors (including the
mayor of Yerevan) have higher education, 4 of them did not complete their higher education, 111
mayors have secondary vocational education, 40 of them have secondary education, and only 2
have 8-year education (Table 18). Thus, the share of mayors with higher education has increased
as a result of amalgamation, equaling 69%, instead of 61% of the previous year.
Table 18. Indicators on education level of mayors by marzes, as of December 31, 201766
N Marz Number of
municipalities
Education
Higher
education
Incomplete
higher
education
Secondary
vocational Secondary
8 –year
education
1. Aragatsotn 72 47 0 15 10 0
2. Ararat 95 73 0 18 4 0
3. Armavir 97 54 2 26 15 0
4. Gegharkunik 57 43 0 13 1 0
5. Lori 56 33 1 19 3 0
6. Kotayk 42 30 1 10 1 0
7. Shirak 42 29 0 7 5 1
8. Syunik 8 8 0 0 0 0
9. Vayots Dzor 8 5 0 2 1 0
10. Tavush 24 22 0 1 0 1
Total 501 344 4 111 40 2
Gender distribution in local self-government bodies and municipal staff
66 Brief information on education level of municipality mayors (as of December 31 2017), issued by the RA
Ministry of Territorial Administration and Development
57
Previous years’ tendency in terms of gender inequality and low representation of women
in elected local self-government bodies persisted in 2017. In particular, only 8 out of 501
municipalities had female mayors. Only 23 female deputy mayors were appointed. Number of
male avagani members prevailed and the share of female avagani members was only 10.1 %.
Instead, gender equality is observed among secretaries of administrative staffs, 237 of which are
women and 233 are men. The same applies to members of administrations, where the share of
women is 50.3 % (see Table 19). Thus, the tendencies of previous years mainly prevailed.
Table 19. Gender distribution in local self-government bodies and municipal staffs
as of December 1, 2017 67
Marz Mayors
Deputy
mayors
Members of
avaganis
Secretaries of
staffs
Members of
administrations
Female Male Female Male Female Male Female Male Female Male
Aragatsotn 0 72 3 30 30 415 28 40 335 366
Ararat 1 94 2 93 94 598 65 28 641 247
Armavir 3 94 2 90 88 613 40 48 383 464
Gegharkunik 1 56 0 47 15 441 6 46 288 574
Lori 1 55 9 27 70 355 32 16 436 395
Kotayk 1 41 5 35 31 317 22 20 394 322
Shirak 1 41 2 31 17 308 22 17 405 443
Syunik 0 8 0 9 7 87 4 4 267 253
Vayots Dzor 0 8 0 6 5 77 4 4 147 198
Tavush 0 24 0 16 24 173 14 10 232 224
Total 8 493 23 384 381 3384 237 233 3528 3486
As it can be seen in Table 20 in terms of gender equality no significant changes have
occurred in Yerevan municipality and administrative districts with the exception of a slight
gender shift among staff members. In this regard, it is noticeable the change of the gender
distribution of members of avagani. Thus, as of 2017 the female members of Yerevan avagani
were 20 instead of the previous year’s 10.
67 Brief information on gender distribution in municipal staffs (as of 31 December 2016), issued by the RA Ministry
of Territorial Administration and Development
58
Table 20. Gender distribution in local self-government bodies and staffs of Yerevan municipality
and administrative districts, as of December 31, 2016 and 201768
Position 2016 2017
Female Male Female Male
Yerevan mayor - 1 - 1
Deputy mayors - 4 - 4
Secretary of Yerevan municipal staff (including
secretaries of administrative districts) 1 12 1 12
Staff members of Yerevan municipality 1019 865 996 887
Heads of administrative districts - 12 - 12
Deputy heads of administrative districts - 19 - 21
Total 1020 913 997 937
Members of avagani 10 55 20 45
Development of municipal management information systems (MMIS)
In 2017 the operation of municipal management information systems (MMIS) continued in
municipalities. MMIS was introduced and put into operation in 10 amalgamated multi-settlement
municipalities of Armenia (Noyemberyan, Ayrum, Koghb, Tegh, Amasia, Ashotsk, Arpi, Sarapat,
Goris, Gorayk). As of 2017 MMIS operated in around 400 out of 502 municipalities in Armenia,
including in 18 amalgamated municipalities.
In 2017 citizen service offices were opened up in 6 amalgamated municipalities (Meghri,
Gorayq, Sarapat, Arpi, Amasia, Noyemberyan). In total, there are 29 of these service offices in
the RA municipalities, 20 out of which are located in the newly formed multi-settlement
municipalities. As a result of the works implemented in 2017, 8 municipalities were provided with
an opportunity to broadcast online events of municipal significance (avagani sessions, press
conferences of local authorities, public discussions) The number of these municipalities reached
33.69
6.2 Municipal service
Legislative bases of municipal service
Municipal service is an individual type of public service. The RA law on Municipal Service
defines it as a professional activity aimed at fulfillment of tasks and functions reserved to the
LSGs by the RA legislation. 70
Development of municipal service sector is one of the most important factors of
improvement of LSG system in Armenia. It should be noted that following the adoption of the
law on Municipal Service a lot of work has been done to develop municipal service sector and
make it more sustainable. This relates particularly to creation of general legislative-normative
68 Brief information on gender distribution in municipal staffs (as of 31 December 2016), issued by the RA Ministry
of Territorial Administration and Development. 69 2017 activity report, RA Ministry of Territorial Administration and Development, page 2 70 RA law on Municipal Service, RA official bulletin N 37 (840), Yerevan, 2011, Article 3
59
framework, procedures of municipal service organization and human resource management,
main principles of municipal service, legal status of municipal servants, introduction, and
development of MMIS, etc. Irrespective of the above-mentioned efforts, there are still a number
of issues requiring urgent solutions. The issues on the list are the low level of effectiveness
municipal service, imperfection of selection, appraisal, training and professional promotion
procedures of municipal servants, ineffectiveness of rewarding systems, etc. Without finding a
solution to the above issues, further development and improvement of local self-government
system will be impossible. The necessity for continuous development of municipal service system
is driven by local self-government reforms, as well as by development of various components of
civil society.
There is a lack of highly qualified specialists both in public and municipal service sectors.
A solution to this problem is the introduction of human resource databanks and trainings for
municipal servants. However, reserve for human resources, which is primarily meant to solve the
issue of filling temporary vacancies, is not able to fully perform its function yet. This is driven by
the fact that reserve for human resources is not yet able to solve the issue of filling temporary
vacancies, for municipal servants, who were released from their positions because of staff
reduction, occupy other positions without any competition, yet the ones who win the
competition, but are not appointed to any position, are reluctant to get registered in human
resource databanks.
The RA municipalities vary in number of population and living standards. There are also
border and remote municipalities and the ones that are in high mountainous zone. Based on these
differences, the fulfillment of provisions of the law on Municipal Service requires differentiated
approach to assist the stabilization of municipal service sector in municipalities, which vary
significantly.
In the reported period, no amendments and additions were made to the law on Municipal
Service.
In 2017 the MTAD attempted to ensure fulfillment of requirements prescribed by the law
on Municipal Service. According to unified data registry of municipal servants, as of May 4, 2017,
the number of municipal service positions was 6450 (see Table 21). 71
Table 21. Number of municipal service positions as of May 4, 201772
N Yerevan and marzes Total
Number of approved positions
1 Yerevan 1624
2 Aragatsotn 465
3 Ararat 552
4 Armavir 628
5 Gegharkunik 544
6 Lori 667
7 Kotayk 584
8 Shirak 567
71 As of the end of 2017 the Ministry of Territorial Administration and Development did not yet have the statistics
on actual occupied positions in the municipal service. 72 2017 report of Administrative Supervision and Municipal Service Issues Department of the RA Ministry of
Territorial Administration and Development.
60
9 Syunik 343
10 Vayots Dzor 164
11 Tavush 312
Total 6450
A total of 832 competitions for open positions were announced, of which -688 (83%) were
held. With a view to ensure publicity, the announcements on vacancies were posted on the
announcement board and website of the MTAD. Also, they were made public through the State
Employment Agency of the Ministry of Labor and Social Affairs
With a view to provide an opportunity for the municipal staff to constantly upgrade their
capacities, an appraisal procedure is held for municipal servants every three years. In the course
of 2017, 757 municipal servants were appraised (see Table 22).
Table 22. Number of appraised municipal servants as well as announced and held competitions for
open positions in 2017 as of December 31, 201773
Ratio of municipal servants to population
To have an insight into the number of municipal servants, besides its absolute value it is
necessary to consider its relative value depending on the number of population. In this regard,
the ratio of municipal servants in administrative staffs of municipalities to the number of
population in Yerevan and marzes should be discussed. As it can be seen based on Table 23 the
indicator is the highest in Aragatsotn and Vayots Dzor marzes, i.e. 0.37% and 0.33% respectively.
Meanwhile, the relative value of the number of municipal servants by marzes exceeds the same
indicator (0.15%) for Yerevan by over 2.5 times. This comes to prove the existence of excess staff
positions in municipalities of respective marzes. Moreover, the mentioned indicators have not
been changed significantly as compared to the previous year.
Table 23. The ratio of municipal service positions in administrative staffs to the number of
population in Yerevan and marzes, as of May 4, 2017
N Marz
Approved
municipal service
positions
Number of
population,
thousand people 74
Approved
municipal service
positions versus
number of
population %
1 Yerevan 1624 1077.6 0.15
2 Aragatsotn 465 127.1 0.37
3 Ararat 552 257.8 0.21
4 Armavir 628 264.6 0.24
73 Ibid 74 RA National Statistics Service, number of the permanent population of the Republic of Armenia as of January 1,
2018, page 7
Number of
reserve human
resources
2017
Appraisal
Competition
Announced Held
1315 757 832 688
61
5 Gegharkunik 544 229.7 0.24
6 Lori 667 217.4 0.31
7 Kotayk 584 251.6 0.23
8 Shirak 567 235.4 0.24
9 Syunik 343 138.4 0.25
10 Vayots Dzor 164 49.6 0.33
11 Tavush 312 123.5 0.25
Total 6450 2972.7 0.22
6.3 Training of municipal servants
Assessment of training system for municipal servants
According to the RA legislation at least once in three years, each municipal servant is bound
to take mandatory training. Besides, training is carried out in case of improvement and/or
modification of the requirements applicable to the rights and responsibilities, knowledge and
skills set out in the job description for the position in question, such improvement and/or
modification taken place on the initiative of either the municipal servant or the respective mayor.
Training procedures and programs for municipal servants are approved by the state agency
designated to do so by the government of Armenia.
Trainings of municipal servants are implemented through organizations selected on a
competitive basis. In 2017 the training for municipal servants of Yerevan administrative staff was
held by Institute of Economy and Management, the training for mayors and avaganis was held
by RA Public Administration Academy, and the training for municipal servants in marzes was
organized by Union of Communities of Armenia.
As of December 31, 2017, 839 municipal servants were trained (see Table 24). The analyses
reveal that in the training system in question sufficient attention is not paid to practical issues,
study and discussion of various possible situations. Thus, a large part (16 hours) of total time (24
hours) of procurement training program for municipal servants is dedicated to discussion on
procurement legislation and only 6 hours are dedicated to discussion on practical issues and 2
hours –to description of e-procurement system.75
Table 24. Number of trained municipal servants 76
N Marz 2011 2012 2013 2014 2015 2016 2017
1 Aragatsotn 78 260 51 155 160 39 0
2 Ararat 249 81 100 252 81 60 41
3 Armavir 241 98 164 256 89 120 24
4 Gegharkunik 207 82 162 240 67 40 25
5 Lori 287 153 113 282 118 80 80
6 Kotayk 260 75 121 222 98 20 60
75 Order N169-A of the Minister of Territorial Administration of the Republic of Armenia on "Approval of the
Training Program for Municipal Servants in Organization and Implementation of Municipal Procurement”, 2013 76 2017 activity report of the Department of Administrative Supervision and Municipal Service Issues of the RA
MTAD Armenia
62
7 Shirak 134 117 124 218 60 60 65
8 Syunik 39 215 41 137 98 19 63
9 Vayots Dzor 83 40 27 103 21 20 0
10 Tavush 98 131 64 136 71 37 0 Total 1676 1252 967 2001 863 495 278
11 Yerevan 0 280 423 388 405 198 561 Total 2071 1532 1390 2389 1268 692 839
One of the main drawbacks of training programs for public servants is that the training
materials are delivered mainly through lectures, which, to a large extent, limits the possibility to
acquire practical skills and develop sustainable capacities. Besides the receptivity features of
municipal servants are not taken into account.
The study of the training system for municipal servants reveals a number of drawbacks,
some of which are the discontinuation of trainings, loose connection between actual needs to raise
qualification of municipal servants and training programs, lack of modern training methods and
techniques, etc. As a consequence, one of the main issues of improvement of municipal service
sector should be development and consistent implementation of respective measures aimed at
raising effectiveness of training programs. Namely, the final outcome of trainings should be
defined, i.e. knowledge, skills and capacities, which are to be acquired by the trainees at the end
of the program.
Another drawback of training system for municipal servants is that the programs are mainly
drafted by educational institutions and do not comply with trainees’ actual needs and preferences.
The state designated body approves only the topic of the training program without defining the
content, which may result in non-compliance with training requirements.
In this regard, it is necessary to develop and introduce mechanisms enabling to get
appropriate information about trainees’ requirements and needs at the very first stage of drafting
the training programs. However, besides drafting programs the quality of trainings is largely
dependent on selection and implementation of effective training methods, as well as trainers’
qualifications, knowledge and skills.
6.4 International Assistance
Factors promoting development of local self-government system in Armenia include
international organizations and their offices implementing various missions in Armenia and
playing a huge role. International organizations attach much importance to territorial-
administrative reforms and decentralization, local democracy, improvement of municipal finance
management system, development of e-governance, etc. In the reported period international
organizations continued implementing various programs in local self-governments system of
Armenia. Each of the programs will be discussed separately.
Local Government Development Program in South Caucasus implemented by
German Agency for International Cooperation-GIZ. The program assists and consults the
respective partners at national, regional and local level in Armenia, Georgia and Azerbaijan in
implementation of cooperation initiatives aimed at development of local government. It assists
improvement of framework conditions in local government, addresses regional government issues
63
and works to improve municipal services. In the context of German international cooperation,
the objectives of the program are aimed at Caucasian range of initiatives. Exchange of experience
and development of cooperation among the countries of the South Caucasus are the main issues.
The program is implemented in cooperation with the Ministry of Territorial Administration and
Development.
The program encompasses the following major thematic areas: Territorial and administrative reform Municipal e-governance Program budgeting at municipal level Territorial administration
In 2017 the official opening ceremonies of citizen service offices were held in 6 municipalities. The offices were established within the abovementioned program with the support
of Federal Ministry for Economic Cooperation and Development of Germany and are co-funded
by Swiss Agency for Development and Cooperation (SADC) and U.S. Agency for International Development (USAID). Citizen offices (Cos) are aimed at centralized delivery of services to citizens based on “one-stop shop” principle, enhancing effectiveness, transparency and accessibility of local governments, ensuring easier communication between citizens and municipal administration. Municipal management information systems (MMIS) were introduced in citizen service offices, which are meant to increase effectiveness of local governments. As an information system developed for local governments exclusively, MMIS enables automatic management of information flows. The system contributes to higher accountability and transparency of local governments towards citizens; decrease in time spent on delivery of services, and encourages participatory local governance. The system allows delivering online services to citizens, tracking the process, addressing online to respective specialists, and receiving
important information on municipality. Created online tools enable citizens to be engaged in decision-making at the local level. Within territorial-administrative reforms, MMIS will ensure effective government of amalgamated municipalities, integration of and cooperation among settlements through a single information platform, delivery of administrative services to citizens in their settlements (including online), as well as application of common databases.
In 2017, U.S. Agency for International Development (USAID) in cooperation with the Ministry of Territorial Administration and Development continued to implement Local Government Reform Activity (LGRA), which is to last till 2020. To this end Armenian government through a government-to-government funding mechanism (G2G) has been granted 8,5 million USD by the US government. Armenian Territorial Development Fund is implementing this activity on behalf of the Government of Armenia. Along with USAID funding ATDF also was
granted 2,4 million USD by the Swiss government to provide technical assistance to 5 consolidated municipalities not covered by LGRA. This activity is implemented by the Swiss Agency for Development and Cooperation.
In 2017 “Integrated Support to Rural Development: Building Resilient Municipalities” and “Integrated Development of Rural Tourism” projects continued, which are implemented by
United Nations Development Program (UNDP) in Armenia in close partnership with the Ministry of Territorial Administration and Development and are funded by the government of the Russian Federation. The projects are aimed at poverty reduction in rural municipalities and creation of sustainable economic incomes.
The budget for the mentioned first project is more than 5 million USD and is aimed at the development of rural infrastructures in the border villages of Tavush marz and the expansion of
opportunities for income generation. 77
77 http://mtad.am/hy/news/item/2017/06/16/mtadintegrvac/
64
The second project is implemented in approximately 60 rural areas of the marz to create additional sustainable income opportunities for rural municipalities by establishing and
developing tourism infrastructure. The Ijevan Travel Research Center has already been established within the project aimed at identifying, which is aimed at revealing and promoting the tourism potential of the region.78
"World Vision" International Charitable Organization has been operating in Armenia for 25 years now, working in Yerevan and around 190 municipalities in 6 marzes of Armenia. The “Community Level Access to Social Services" project implemented by the organization was launched in September 2017 and is funded by the US Agency for International Development. The project is aimed at promoting the system of municipality-based social services in Armenia through implementation of effective social work. The project also aims to increase the livelihood of vulnerable children and their families. The project will reinforce the role of municipality social worker and foster the cooperation of local and regional key actors in the social sector.
On October 24, 2017 international conference “Innovation and Regional Development as Growth Factors in the Eastern Partnership Countries” organized by the Conference of Regional
and Local Authorities79 for the Eastern Partnership (CORLEAP) took place. The conference hosted more than 350 government, regional and local officials from Eastern Partnership countries. During the conference, the European Commission announced the launch of the second phase of Covenant of Mayors East (CoM East) initiative of the Eastern Partnership countries as well as Mayors for Economic Growth (M4EG) initiative aimed at energy effectiveness and business sector respectively.80 Conference of Regional and Local Authorities for the Eastern Partnership (CORLEAP) is a platform, which allows discussing the role of cities and regions in the context of development of the Eastern Partnership. It is a political forum uniting local and regional authorities of the EU Member States and Eastern Partnership countries. The conference consists of 36 members representing local and regional authorities, 18 out of which are members of the
European Committee of the Regions and the other 18 representatives of 6 EaP countries. CORLEAP holds bureau sessions, annual meetings and conferences.
In 2017, 8 regional development pilot projects were implemented in cooperation with the
EU. The MTAD continued to implement solid household waste management programs with the
support of Asian Development Bank (ADB), European Bank for Reconstruction and
Development (EBRD), German Development Bank (KfW). 81 Active talks were held regarding development of garbage collection and construction of a landfill site project in city of Dilijan and
Lori marz in the framework of cooperation with the Armenian Government and the German
Development Bank (KfW). Within its competences, MTAD assisted the implementation of the "Solid Household Waste Management Improvement in Armenia" and the "Solid Household
Wastes Management Solutions in Remote and Small Municipalities of Armenia" grant projects within the framework of cooperation between the Government of Armenia and the Asian Development Bank. The Government of the Republic of Armenia approved the RA 2017-2036 solid waste management system development strategy. The adoption of the document was preceded by an active discussion with the representatives of environmental structures, regional administrations and municipalities.82
78 2017 activity report RA Ministry of Territorial Administration and Development, page 4 79 Congress of Local and Regional Authorities of the Council of Europe represents local and regional authorities and
fosters local democracy. It consists of two chambers: chamber of local authorities and chamber of regional authorities, which include 324 permanent and 324 non-permanent members representing more than 200 000 local and regional
authorities. 80 2017 activity report RA Ministry of Territorial Administration and Development, page 8 81 Ibid. 82 http://mtad.am/hy/news/item/2017/01/25/mtadkfw25/
65
In 2017 the Civic Engagement in Local Governance-CELoG five-year program funded
by the U.S. Agency of International Development (USAID) continued to be implemented.
The program kicked off officially in October 2014 and is implemented by Communities Finance Officers Association (CFOA) in partnership with Information Systems Development and Training Center (ISDTC), Yerevan Press Club (YPC), “Asparez” Journalist Club (AJC), Eurasia Partnership Foundation (EPF) and Caucasus Research Resources Center (CRRC). Besides supporting local self-government reform, the program is an effective tool to enhance citizen participation, through which citizens receive knowledge, skills and opportunity to be actively engaged in planning, implementation and control over management processes in their municipalities.
In terms of its contents the program includes the following four main components: a) stabilize and strengthen capacities of civil society to ensure their participation in local
self-government and decentralization reform, and appropriate representation of their interests in
the above processes, b) strengthen capacities of civil society towards monitoring the performance of national and
local authorities and the process of decentralization, c) enhance the degree of accessibility to independent and reliable information on
decentralization reform, d) create enabling environment for citizen participation in the context of decentralization
reform. In terms of geographic and typological aspects, the program is diverse and incorporates two
categories of municipalities. The first category encompasses 30 urban and large rural municipalities, and the second category deals with 13 multi-settlement municipalities formed as a result of municipal amalgamation during 2015-2016. In 2017 various projects and event were held in all selected municipalities, including training programs for municipal staff members and
representatives of civil society, small monitoring and civic engagement grant projects, participatory design and discussions of five-year municipal development plans and budgets, support to local civic initiatives, etc.
CELoG program attaches much importance to development of information systems in local self-government. The program aims to improve information systems, implements a number of initiatives related to e-governance, and localizes most efficient information tools based on study of international experience.
Assessing coordination and consolidation in operations of international organizations
The experience in local governance sector shows that the international or local organizations funded through foreign sources are often the initiators of reforms, taking real steps towards the improvement of local self-government system, rather than the state of local self -government bodies. While exercising their missions international or local organizations cooperate with the government, local self-government bodies, civil society organizations, and frequently with each other. However, development of local self-government in Armenia is impossible through initiatives, efforts and programs implemented only by international organizations. In Armenia, as in other countries, the role of the state and in particular the central government in development of local self-government system is crucial. Public administration bodies are responsible for the formation of laws, which is to include provisions regulating local self-government system. The local governance cannot function effectively in the absence of strict rules, procedures and policies. Meanwhile, a contrary argument that without real incentives and
practical steps, laws, rules and procedures can hardly do anything is also true. In some cases the implemented projects, no matter how effective, are not sufficiently
coordinated with local governments and do not envisage their engagement and ownership in
66
municipal development projects. Moreover, LSGs are often quite skeptical about such projects and upon completion of the projects they simply return to their old, conservative way of doing
business.
67
7. Delivery of public services
7.1 Public services delivered by municipalities
In 2017 a number of changes occurred in the sector of municipal service delivery, which are
detailed in the following paragraphs according to respective sectors of activity.
Urban development (landscape planning, gardening and urban design)
According to the RA law on Local Self-Government, the mayor exercises a number of own
powers in the sector of urban development and utilities, including organization of landscape
planning, landscape gardening and urban design. These services are financed mainly through the
municipal budget and fee for these services is not set or charged.
According to the same law avagani also defines the essence, scope, conditions and procedure
for the compulsory urban design for the owner or possessor of the real estate within the
administrative territory of the municipality.
In 2017 a number of legislative amendments and additions were made in the sector of urban
development, the ones related to local government are described as follows:
The RA law on Architectural Activity was adopted on December 6, 2017. The law prescribes
creation of a “Chamber of Architects”, a regulatory professional association, as a non-
commercial, non-governmental institution based on the membership of physical entities. It will
function based on the principle of self-regulation, will have a nationwide coverage and be one of
its kind in the country. The chamber will be liable to carry out licensing and registration of
architects (in the architects’ registry), approve the rules of ethics and oversee their application,
as well as provide expert opinion on spatial planning documents for the RA marzes, municipalities
and settlements based on applications and inquires submitted to the chamber according to the
procedure prescribed by law.
With a view to revise the procedures for elaborating, examining, coordinating, approving
and modifying general plans for municipalities (settlements) and attached spatial planning
documents (optimization of procedures, reduction of inefficient correspondence, clarification of
requirements for design and contents of documents), relevant changes were made to the
government Decree N1920-N dated December 29, 201183:
The decree on making amendment in the government Decree N596-N of March 19, 2015
was adopted, according to which an amendment was made to simplify engineering infrastructure
construction procedures. Thus, while constructing an additional engineering line for a
building/construction, it is not required to get an architectural-planning assignment; the
construction is carried out on the basis of a trajectory-design agreement, through receiving
construction permit within three days. Moreover, final act of construction is not required either,
for the works are carried out and the completion is documented by the service provider
organization. The damage caused to municipalities (asphalt cover, green zones, etc.) because of
construction of engineering infrastructure, is compensated on contractual basis.
With a view to define a simple and clear procedure for regulation of permit issuing
procedure in the sector of urban development, the existing one was altered which envisages
83 Based on the government decree N1645-N, dated December 14 2017
68
implementation of a substantial part of the functions electronically through a unified system
www.e-permits.am.84 The electronic system for construction permits intends to serve as an
additional opportunity to facilitate the process. The website provides information on the legal
framework for permits in the sector of urban development, as well as a guide to acquiring online
construction permits.
In urban development sector landscape gardening is an integral part of a common system
of landscape planning and urban design.
In the course of 2017, the German International Cooperation Agency (GIZ) implemented
afforestation activities on erosion lands of Lusagyugh, Arayi, Quchak and Hnaberd municipalities
of Aragatsotn marz. Thus, out of total area of 53 ha of erosion lands of Arayi municipality, 18 ha
were afforested and fenced and the remaining 35 ha were only fenced. In Lusagyush municipality
4 ha of land were fenced and afforested. In Hnaberd municipality 20 ha of land were fenced, 5
ha of which was afforested. In Quchak municipality out of total areas of 47 ha of erosion land, 30
ha were afforested and afforestation activities on the remaining 17 ha are ongoing.85
Afforestation activities were carried out on nearly 90 ha of land in Gegharkunik marz In
Martuni municipality a public beach was opened. Construction activities on public beach in
Tsovagyugh municipality are underway.86
In Hrazdan municipality of Kotayk marz offshoot growth activities were carried out on
nearly 100 hectares of forest lands.87
Within the program “Armenia Tree-Planting” tree planting activities were organized and
implemented in Armavir marz (over 3205 trees and bushes, seedlings). Trees and bushes were
planted on more than 3 ha on the territory of various organization of 13 municipalities of the
marz (municipal administrations, school, church, culture house, forest, gardens, parks and road
sides). 88
Afforestation activities were implemented on 14.5 ha on forestry areas of Lori marz by
“Hayantar'' SNCO. With the support of GIZ offshoot growth activities on 100 ha of land were
implemented on the territory of Gugark Forestry Branch, and with the support of United Nations
Development Program offshoot growth activities on 93 ha of land were implemented on the
territory of Lalvar forestry branch. With the support of ATP Charity Foundation tree planting
activities were implemented on 58.4 ha of land. Overall in 2017 afforestation as well as
maintenance and protection activities of forest plants and plantations established in previous
years were carried out on approximately 135 ha of land.89
84 http://www.minurban.am/reports/himnakan-hashvetvutyun.pdf 85 http://aragatsotn.mtad.am/files/docs/31791.pdf, Report on activities of marzpet of Aragatsotn marz and on social-
economic situation in the marz, 2017 86 http://gegharkunik.mtad.am/reports/, Report on activities of marzpet of Gegharkunik marz and on social-
economic situation in the marz,2017 87 http://kotayk.mtad.am/reports/, Report on activities of marzpet of Kotayk marz and on social-economic
situation in the marz,2017 88 http://armavir.mtad.am/reports/, Report on activities of marzpet of Armavir marz and on social-economic
situation in the marz,2017 89 http://lori.mtad.am/reports/, Report on activities of marzpet of Lori marz and on social-economic situation in the
marz,2017
69
Within the framework of cooperation with Armenia Tree Project of “ATP” charity
foundation, afforestation activities in municipalities were implemented or are underway in 22
municipalities of Shirak marz, occupying more than 35 ha of land. 90
In Yerevan, the total area of maintained green zones was 2.8 hectares in 2017. 91
Waste Disposal and Sanitary Cleaning
As of January 1, the number of municipalities providing waste disposal services was 317.92 In 2017 the total sum of waste disposal payments amounted to about 1,234 billion AMD in
marzes and 2,970 billion AMD in Yerevan.93 By the end of 2017, 17,649 waste disposal service contracts were signed with legal entities in RA marzes. The average amount of waste disposal contracts with legal entities / economic entities equals 3,657 AMD. At the same time, the annual average expenditure per capita for waste disposal and sanitary cleaning in Armenia is 1,560 AMD,
with a possibility of standard deviation of 390 AMD. 94 2300 landfills were inventoried, registered and digitized on the territory of the republic,
with a total territory of 430 ha. As of the end of 2017, 1,622 landfills95 were cleaned or conserved. Table 25 provides information on the actual expenditure of waste disposal services and
collected fees in Armenian municipalities. Thus, it is clear that it is too early to speak of the self-funding of the waste disposal service. The indicators show that this service will be self-funded only if the revenues for service increase 2.2 times.
Table 25. Actual expenditure on waste disposal services and collected fees in RA municipalities,
2017
N Marzes Revenues
Expenditures
Incr
eas
e i
n r
even
ues
for
100
% s
elf
-
fin
anci
ng o
f se
rvic
es
Total
Including
From
administrative
budget
From
fund
budget
1. Yerevan 2 970 664.4 5 417 536.5 5 400 317.6 17 218.9 1.8
2. Aragatsotn 18 579.9 166 366.7 163 476.7 2 890.0 8.8
3. Ararat 164 454.3 350 176.1 345 508.5 4 667.6 2.1
4. Armavir 193 580.8 393 401.5 349 803.2 43 598.2 1.8
5. Gegharkunik 15 997.8 316 146.7 307 446.7 8 700.0 19.2
6. Lori 226 199.8 556 155.5 528 880.7 27 274.9 2.3
7. Kotayk 357 836.2 943 439.5 908 213.9 35 225.6 2.5
8. Shirak 172 210.5 318 706.4 312 384.5 6 321.9 1.8
9. Syunik 1 044.5 560 779.1 536 779.1 24 000.0 513.9
10. Vayots Dzor 21 159.4 147 325.7 147 325.7 0.0 7.0
11. Tavush 63 048.2 351 988.5 348 378.5 3 610.0 5.5
Total 4 204 775.7 9 522 022.1 9 348 515.1 173 507.0 2.2
90 http://shirak.mtad.am/reports/, Report on activities of marzpet of Shirak marz and on social-economic situation
in the marz, 2017 91 http://yerevan.am, Annual report of Yerevan municipality, 2017 92 Data provided by MTAD 93 http://mtad.am/hy/budgetary-incomes/, Annual municipal budget revenues, 2017 94 MTAD annual report on the main activity results of 2017 95 Ibid
70
There are 33 private companies providing waste disposal services in 153 municipalities of
Armenia.
In 2017, Clean Armenia Action Plan was elaborated and circulated, which implies a broad
cooperation among the state, municipality, private sector and civil society and is intended to
unite the citizens of Armenia, government and local self-governing bodies, business circles and
non-governmental organizations to clean Armenia of waste and prevent its further accumulation
in areas not intended for waste disposal. In the framework of the Clean Armenia program, a total
of three-day cleaning activities were organized with the participation of 368,334 citizens, 7,678
organizations, 3,692 mechanisms. The cleaning activities were organized in around 7,000 separate
areas, which were pre-mapped. The RA police subdivisions and territorial bodies revealed 1,959
places not intended for waste disposal, as well as 974 people disposing waste at these places.96
Table 26 shows landfills registered as of the end of the year (excluding Yerevan city).97
Table 26. Brief information on landfills registered on the territory of Armenia
Number of landfills 2300
Total territory of landfills (hectares) 430
Number of landfills with a total area of 0.01-0.05 hectares 1175
Number of landfills with a total area of 0.051 – 1 hectares 865
Number of landfills with an area of over 1 hectare 260
Number of landfills on the territory of settlements 450
Number of landfills at a distance of up to 1 km from the settlements 1850
In Yerevan waste disposal and sanitary cleaning activities are implemented by a private
company “Sanitek”.
Maintenance of residential and non-residential areas
As of the end of 2016 total surface of housing stock of RA was 93.8 mln m2 including 53.0
mln m2 in urban areas (56.5%), 40.8 mln m2 in rural areas (43.5%). As of the end of 2016 total
surface of multi-apartment housing stock was 28.1 mln m2 or 29.9% of the total surface of the
housing stock. The number of multi-apartment buildings totaled 19,144, the number of
apartments was 441,591. As of the end of 2016, the total surface of the dwelling houses was 65.5
mln m2 or 69.8% of the total area of the housing stock. The number of dwelling houses was
393,560.98
As of the end of 2016, the total surface of the housing stock per capita was 31.4 m2, while
27.9 m2 in urban areas, and 37.6 m2 in rural areas.
As of the end of 2016 the total surface of the housing stock of the multi-apartment buildings
in Yerevan was 15.2 mln m2 or 54.3% of the total area of the housing stock of the multi-apartment
buildings and 57.9% in urban areas. 99
The main source of funding for housing construction in Armenia is the owners' resources.
Housing construction funded from the state budget is limited.
96 http://www.mtad.am/u_files/file/pashtoni%20andznagrer/«Մաքուր%20Հայաստան»%20գործողությունների
%20ծրագիր.pdf,. Clean Armenia Action Plan, 2017 97 Ibid. 98 http://www.armstat.am/am/?nid=82&id=1963 99 Ibid.
71
Areas of common use of dwelling buildings require proper maintenance, repair and
management.
Very little funds are allocated from the state budget for the apartment repair activities, for
repair and maintenance of apartments is owners’ responsibility. Energy efficiency of buildings is
one of the priorities of the government, but state financing in energy efficiency improvement
programs is intended only for industrial buildings. International organizations, with the support
of the government of the Republic of Armenia, implement a number of pilot projects financing
the improvement of energy efficiency of dwelling buildings.
In 2017 flat roofs with a total surface of over 95,000 m2 of 1103 buildings were repaired in
Yerevan, and sloping roofs with a total surface of 45,000 m2 of 1223 buildings were repaired
partially. 1141 entrances of 694 multi-apartment buildings were repaired. In order to prevent
collapse of balconies of multi-apartment buildings, 166 balconies of 69 buildings were repaired
and reinforced. Electric Networks of Armenia has replaced 253 cable networks of 105 buildings.100
4544 out of 4878 multi-apartment buildings in Yerevan are managed by 183 condominiums,
85 are managed by authorized managers, and 120 by the heads of the administrative districts.
As of January 1, 2018, 733 condominiums operated in Armenia.101
In 2017 the draft law on making amendments to the RA Law on the Management of Multi-
Apartment Building was discussed. Amendments are conditioned by the need to update the main
laws governing the sector: the Law on the Management of Multi-Apartment Building and the Law
on the Condominiums, both adopted in 2002.
Water supply and waste water removal
The trilateral lease agreement, signed on November 21, 2016 by the French "Veolia Group"
- "Veolia Jur" CJSC and the State Committee for Water Economy of the Ministry of Energy
Infrastructures and Natural Resources of the Republic of Armenia, "Veolia Jur" has assumed the
responsibilities of a single operator in Armenia, since January 1, 2017 for a period of 15 years.
Under the lease agreement, the company has undertaken the management of drinking water
production and sales, as well as waste water systems, and has committed to increase the efficiency
and development of distribution networks in the settlements formerly managed by “Armenian
Water and Sewerage Company”, “Yerevan Water”, “Shirak Water and Sewerage Company”,
“Lori Water and Sewerage Company” and “Nor Akunq.”
On December 9, 2016, the Public Services Regulatory Commission of the Republic of
Armenia made a decision to grant a license to “Veolia Jur” CJSC for delivering drinking water
and wastewater removal services, as well as to define the unified tariffs for the provision of
drinking water and wastewater removal services by Veolia Jur CJSC.
Starting January 1, 2017 “Veolia Jur” CJSC offers the following tariffs for the provision of
drinking water and wastewater removal services to its customers:
Drinking water supply service tariff - 153 AMD /m3 (including VAT);
Waste water removal service tariff-27 AMD /m3 (including VAT);
100 Annual report of the Yerevan municipality, 2017 101 Data available at the State Register of the Legal Entities of the Ministry of Justice of the Republic of Armenia
72
According to the license issued on December 9, 2016 “Veolia Jur” CJSC serves city of
Yerevan and 354 settlements in 10 marzes of Armenia102 (Table 3 summarizes the information on
the service areas as of the end of 2017 (excluding Yerevan)). Thus, 650 out of 1005 settlements
have been left out of the company’s service zone, which are mainly served by municipalities,
municipally owned SNCOs or private companies.
Table 27. Brief information on the service areas of "Veolia Jur" CJSC
in the Republic of Armenia
N Marz Number of
settlements
1. Aragatsotn 30
2. Ararat 72
3. Armavir 44
4. Gegharkunik 21
5. Lori 40
6. Kotayk 43
7. Shirak 60
8. Syunik 25
9. Vayots Dzor 8
10. Tavush 11
Total 354
According to State Committee for Water Economy about 700 million euros is required for
the renovation and reconstruction of water supply and drainage systems throughout the whole
territory of Armenia. A total of 250-300 million euros of this amount is the cost for improving
water supply networks in 570 settlements with no centralized service.103
In 2017 collection of payments for irrigation and drinking water supply services in the whole
system amounted to about $ 21.93 billion AMD, instead of 21.83 billion AMD in 2016, (101.9
million AMD more). In 2017, the level of levied payments for drinking water supply was 87.24%
and 64.72% for irrigation. 104
On May 4, 2017, the Government of Armenia adopted decree N 461-A " Water Intake from
Lake Sevan for Irrigation Purposes in 2017", based on which amount of water intake from Lake
Sevan for irrigation purposes was 170 mln m3. Also, on July 6, 2017, the RA law AL-116-N was
adopted, according to which the maximum amount of water intake from Lake Sevan for irrigation
purposes was increased by 100 million m3 and was 270 m3 .
According to 2016 data, the total length of the street and inter-district/inter-yard sewage
networks in the sewage system was 2900.7 km and 582.5 km respectively, of which 2817.7 km
and 552.3 km in urban areas. 102.8 mln m3wastewater was drained into the sewage system.105
Table 28 presents the total length of the sewage networks in the RA marzes and Yerevan, the
analysis of which shows that 40.4% of street and inter-district/inter-yard sewage networks
registered in the sewage system of the republic need replacing.
102 Decree N 397A of December 9 2016 of the Public Services Regulatory Commission of the RA on granting a
licence to "Veolia Jur" CJSC for drinking water supply and wastewater services 103 https://hetq.am/arm/news/87333/chvarakazertsvats-jur-anbarekarg-jramatakararman-hamakarg-10-marzeri-
khmelu-jri-vitchaky.html 104 http://www.scws.am/uploads/files/23/hash-2017.pdf, 2017 activity report of State Committee of Water Economy
of RA MEINR 105http://www.armstat.am/file/article/bn_fond_2017_4.pdf RA housing stock and utilities, 2016
73
Table 28. Sewage network length by RA marzes and Yerevan, as of the end of 2016
Marz Main
collector (km)
Street network (km)
of which require replacement
(km)
Inter-district and inter-yard
network (km)
Yerevan 248.3 587.3 468.2 266.9
Aragatsotn 26.0 70.1 33.3 3.0
Ararat 19.6 151.7 88.8 7.0
Armavir 18.0 175.2 48.5 19.9
Gegharkunik 50.4 243.4 11.5 12.5
Lori 90.3 320.3 168.3 36.2
Kotayk 89.5 522.5 149.6 33.0
Shirak 47.6 336.3 277.2 163.5
Syunik 43.4 259.4 95.4 28.0
Vayots Dzor 18.0 76.4 30.1 6.5
Tavush 39.2 158.1 35.4 6.0
Total 690.3 2900.7 1406.3 582.5
Heating
Due to the severe energy crisis, after Armenia's independence, utility infrastructures were
hit hard, which, in its turn, caused the quality of utility services to go down to disastrous level.
The centralized heating system was destroyed almost completely. At present, none of the
municipalities is fully capable of operating central heating system. In some municipalities
(Yerevan, Gyumri, Vanadzor, Spitak, Aparan) local heating systems operate which heat
individual multi-apartment buildings, schools, kindergartens and so on. It is up to the majority
of residents to solve the issue of heating on their own by installing different types of heaters:
wood, electric, gas, local heating systems or solar water heaters. In recent years, solar
photovoltaic water heaters have become popular, but not everyone can afford it yet. In some
cases, local self-government bodies invested from the municipal budget for gas supply and heating
of municipality infrastructures.
According to 2016 data, 91.8% of urban settlements and 59.8% of rural settlements were
supplied with natural gas. Meanwhile, before the start of the re-operation, the cities of Shamlugh,
Meghri, Agarak and Dastakert were not supplied with natural gas. In the period between
September 1997 to January 1, 2017, 679421 apartments and houses were supplied with natural
gas.106
Cemetery maintenance
According to the RA law on the Organization of Funerals and Operation of Cemeteries and
Crematoria, everyone can voluntarily bury or burn their dead body.107 This law was adopted in
2006, but no cremation has been performed in Armenia for 12 years. According to the same law,
the powers of the head of the municipality in the sector of organization of funerals and
exploitation of cemeteries and crematoria is the organization, exploitation and maintenance of
106 http://www.armstat.am/file/article/bn_fond_2017_5.pdf, RA housing stock and utilities, 2016 107 RA law on Organization of Funerals and Operation of Cemeteries and Crematoria, 2006
74
municipal cemeteries and crematoria in accordance with the requirements of urban
development, environmental and sanitary norms.
However, there are no crematoria yet in any municipality in Armenia. Thus, in this sense,
the provisions of the law are only applied to the maintenance, organization and exploitation of
cemeteries.
Public transport and road construction
According to the RA Law on Local Self-Government, organization of public transport
activities of the municipality, maintenance and exploitation of municipal road infrastructures are
among the mandatory tasks of the municipality.
In 2017, the settlements lacking transport services were inventoried with a view to provide
transportation to all settlements in the RA. As a result, the number of 220 settlements with no
transport service was decreased to 170 as a short-term solution; the remaining 50 settlements
were included in the existing inter-marz routes. 108 Thus, in 2017, due to road conditions and lack
of passenger flow the number of settlements not getting automobile transport services in general
was 16 in the Vayots Dzor marz, 39 in Tavush marz, 9 in Arpi municipality in Shirak marz. In
this regard, the situation is relatively good in the marzes of Armavir and Kotayk, where almost
all the settlements are connected with the regional transport network with the center-
settlements.109
Privileged groups received 400 free traffic certificates.
Interstate highways have been registered, automobile roads information database was
created, road maps were digitized and included in the Google Maps database.
In 2017 total investment volume in road construction in Vayots Dzor marz was 492.4 million
AMD. 110
In this sector 366.9 million AMD was spent from municipal budgets in the Lori marz.111 In
Ararat marz- 221 million AMD112 , and in Gegharkunik marz AMD 341.9 mln AMD were spent on
the reconstruction of 27.3 km of road. 113
In Tavush marz, municipalities, international organizations, and benefactors have
implemented road construction and municipal night lighting regulation activities in the amount
of 159.3 mln AMD. 114
The practical phase of the Yerevan public transport reform process started on April 20,
2017. The "New Bus Route Network, Integrated Tariff and Ticket System" project is being
developed jointly by WYG International company and Ameria CJSC with the support of the
108 2017 report on the activities of the Ministry of Transport, Communication and Information Technologies of the
Republic of Armenia, the overall indicators and structural reforms of the system 109 Ibid. 110 http://vdzor.mtad.am/reports/ , 2017 report on activities of marzpet of Vayots Dzor marz and on social-
economic situation in the marz 111 http://lori.mtad.am/reports/, 2017 report on activities of marzpet of Lori marz and on social-economic situation
in the marz 112http://ararat.mtad.am/reports/ 2017 report on activities of marzpet of Ararat marz and on social-economic
situation in the marz 113http://gegharkunik.mtad.am/reports/, 2017 report on activities of marzpet of Gegharkunik marz and on social-
economic situation in the marz 114 http://tavush.mtad.am/reports/ , 2017 report on activities of marzpet of Tavush marz and on social-economic
situation in the marz
75
Asian Development Bank and Yerevan Municipality. The reform process has its official website,
https://transport.yerevan.am/, which is designed to ensure public engagement in the process of
raising public awareness.
Education, culture and youth issues
In the sector of education, culture, sports and youth activities, the list of municipal services
includes pre-school education and extra-curricular education in the municipality, activities of
municipally-owned schools, kindergartens, clubs, cultural houses, sports schools, youth centers,
libraries, educational, cultural, sports and other youth institutions and organizations, their
maintenance, exploitation and repair activities. These services are usually coordinated by the
departments of education, culture and sports of municipality staffs.
The fees charged for municipal service provision in the sectors of pre-school education and
extra-curricular education are defined as types of local fees by the RA Law on Local Duties and
Fees, and their rates are approved by avagani in the amount of compensation for the given
service.
The rates of fees charged for the provision of other municipal services in the sector of
education, culture, sports and youth activities are also approved by avagani. These services are
also co-financed from the municipal budget as the fees charged for them are not usually enough
to provide full range of services.
As of January 1, 2017, 721 pre-school educational institutions (PSEIs) operated in Armenia,
575 of which are kindergartens, 113 are kindergarten for children under the age of 3, and 33 are
pre-school education institutions. 654 of the total number of PSEIs are municipally-owned
(mainly as MNCOs), 15 are not municipally-owned, and 52 PSEIs are private. PSEIs normally
operate five days a week.
On average, 100 children attended one PSEI, the average number of children in one group
of PSEI was 27, the actual employment in PSEIs was 85.8%; i.e.12 children per PSEI teacher. 115
From the point of view of the organization and implementation of pre-school education,
multi-settlement municipalities, need to ensure access of the whole population to the pre-school
education service. In 2017, the Government of Armenia approved the "Introduction of
Alternative, Cost-Effective Model of Pre-School Education" program, according to which the
institution organizing an alternative model of pre-school education will be a municipally-owned
institution, becoming a low-cost educational institution in settlements lacking these types of
institutions. The use of similar alternative models in smaller settlements of multi-settlement
municipalities allows local authorities to provide all children with pre-school education without
additional administrative costs.
In this regard, in 2014, on the initiative of the United Nations Children's Fund (UNICEF)
Armenia, the creation and implementation of various models of alternative, less costly half-day
pre-school education services was launched in a number of small municipalities of Syunik marz
(Bnunis, Hatsavan, Tortuniq, Tasik, Yeghvard, Bardzavan, Alvank and Nrnadzor). In 2017,
similar programs were implemented in the villages of Atan, Ahnidzor, Shamut and Martz in
Tumanyan multi-settlement municipality of Lori marz. 116
115 http://www.armstat.am/file/article/sv_03_17a_5140.pdf , Socio-economic situation of Armenia, 2016
116 http://www.unicef.am/am/news/
76
In the framework of the new "Improvement of Education" loan program, 23 pre-school
education institutions were established in Aragatsotn, Syunik, Ararat and Gegharkunik marzes
of Armenia in 2017, 18 of which in rural areas and 5 in urban areas, including a total of 1200
children.117
In the academic year 2016/2017, 224 musical schools, arts centers, painting schools and
children's creative schools operated in Armenia. 118 Quantitative data of such schools and centers,
by RA marzes and Yerevan (2016/2017 academic year), are presented in Table 29.
Table 29. Number of musical, arts and painting schools, youth creative centers, by RA marzes
and Yerevan, in 2016/2017 academic year
Marz
Number of
centers and
schools
Including
musical arts painting Youth creative
centers
Yerevan 50 16 10 1 23
Aragatsotn 10 5 2 2 1
Ararat 21 10 5 3 3
Armavir 13 8 - 5 -
Gegharkunik 15 8 5 1 1
Lori 20 6 9 3 2
Kotayk 23 8 12 1 2
Shirak 28 13 12 2 1
Syunik 18 8 6 2 2
Vayots Dzor 8 1 4 1 2
Tavush 18 11 6 1 -
Total 224 94 71 22 37
In 2016, 3 republican and 795 public libraries operated in Armenia. 10 of the public libraries
are in the center of marzes, 49 of them are located in the regional centers, 83 are urban, 627 are
rural, and 26 are children libraries. 119
With a view to organize holidays and memorial days, as well as other cultural events
6,019,650.0 thousand AMD current expenditures (of which 2,311,227.8 thousand AMD in
Yerevan) and 1,011,681.7 thousand AMD capital expenditures (of which 785,768.8 thousand AMD
in Yerevan) from 2017 municipal budgets were made.
As of December 31, 2017, 114 sports schools with 2163 groups120 operated in the marzes of
Armenia, 59 sports schools with 1618 groups operated in Yerevan. 121
117 file:///C:/Users/Expert%20PC/Desktop/2018%20(1).pdf Activity report by the Ministry of Education and Science
of the Republic of Armenia in the period between September 2016 and April 2018 118 http://www.armstat.am/file/article/sv_03_17a_5160.pdf, Socio-economic situation of Armenia, 2016 119 http://www.armstat.am/file/article/sv_03_17a_5210.pdf, Socio-economic situation of Armenia, 2017 120 http://msy.am/files/post/1519719182-HH%20Marzeri%20%20%20itog.pdf 121 http://msy.am/files/post/1519718828-Erevani%20itog.pdf
77
Health care
According to 2015 data, 374 regional and municipally-owned medical institutions of the RA
Ministry of Health (MoH), operated in Armenia. Analysis of Table 30 shows that 10 primary
health care institutions (PHCI) were closed within 3 years and the number of rural ambulatories
decreased by 8.
In 2017, Armenian municipalities have spent 283,427.2 thousand AMD on healthcare
services, of which 53,370.4 thousand AMD are the current expenditures and 230,056.7 thousand
AMD are the capital expenditures. It should be noted that as compared to the previous year, the
expenses of the municipalities decreased by 65.6%.122
Table 30. Medical institutions providing primary healthcare service (with the exception of
nursing-obstetrics centers) by types 2015123
Medical institutions
MoH, regional and municipal
system
2012 2014 2015
Medical institutions providing primary healthcare service 374 364 363
including polyclinics within the hospitals 67 65 63
Number of independent centers providing primary healthcare
service 297 288 289
including polyclinics 40 40 40
Centers providing primary healthcare service 2 2 3
Rural Ambulatories 250 242 242
Children polyclinics 2 2 2
Dispensaries 9 10 10
Social protection
According to the RA Law on Local Self-Government, social protection of the municipality
population is one of the mandatory tasks of the municipality (voluntary social support issues are
solved by the criteria set by t avagani).
The mayor implements a number of own powers in the sector of social protection, for
implementation of which a position of a social worker is created in the municipal staff in
municipalities with more than 5,000 residents. The main rights and responsibilities of a municipal
social worker are defined by the RA Law on Social Assistance.
The mayor exercises the following powers delegated by the state: organization of social
assistance (services) on the territory of the municipality and the activities of territorial bodies
providing social services to local self-governing bodies. Territorial bodies defined by the RA Law
on Social Assistance include separate subdivisions of marz administrations, as well as Yerevan
City Hall, Gyumri, Vanadzor, Ararat and Jermuk municipalities, social support territorial
agencies and social support territorial departments.
122 http://www.minfin.am/hy/page/hamaynqayin_byujeneri_ampop_hashvetvutyun_2017_t_tarekan,
Summary Report on Municipal budget, 2017 123 Health and Health Care Yearbook, Armenia 2016:
78
In 2017, the number of families receiving family and social allowance in Armenia amounted
to 100,288.124 According to 2016 data, the average monthly allowance per family was 31350
AMD.125
In all the municipalities of Armenia (including Yerevan) the expenditures incurred in the
sector of social protection amounted to 3,692,355.2 thousand AMD, of which only 1,793,771.6
thousand AMD in Yerevan.126
The liability of local self-governing bodies to set fees for municipal service provision
According to the RA Law on Local Duties and Fees, the local fee is the compulsory payment
defined by the avagani within their powers, on the basis of the provisions of the same law for the
service provided by the municipality or by the order of municipality, paid to the municipal
budget or extra-budgetary funds, which are part of the budget and are opened in accordance
with the law. The rate of fees is confirmed by avagani’s decision and is submitted by the mayor.
Based on proposal on the defined fees submitted by the mayor, the avagani may define certain
privileges.127
Local fees and rates are defined by the RA Law on Local Duties and Fees (the full list
presented in Appendix 6).
On December 21, 2017 RA NA adopted the law on making amendments to the RA Law on
Local Duties and Fees, which added one more fee to the list of types of local fees: the fee for using
the services of a veterinarian serving the municipality, and established local fee rate in the amount
of compensation for the services of the veterinarian serving the municipality was established128
According to the RA Law on Local Self-Government, the fees charged for services provided
by the municipality are defined by avagani, based on the proposal submitted by the mayor.
7.2. Management of municipal services
Municipal services should be discussed based on the following criteria:
1. Provision of services to the required extent (are all the services defined by law
actually provided and to what extent municipality residents have access to these
services?)
2. Service quality and satisfaction of citizens
3. Effectiveness of provided services129
124 http://www.armstat.am/am/?nid=12&id=19150 125 http://www.armstat.am/file/doc/99506313.pdf 126 http://mtad.am/hy/budgetary-expenditure/ 127 RA law on Local Duties and Fees , HO 16 128 Law on making additions in the law on Local Duties and Fees, 21.12.2017 129 “Local Self-Government Reforms in Armenia” (2004-2006, book 2),Yerevan 2008
79
The situation varies depending on the municipality. Table 31 provides for indicators of
actual expenditures from administrative budgets by economic classification of costs for municipal
service provision for all municipalities in Armenia by 2017.
Table 31. Actual budget expenditures of RA municipalities and Yerevan, by economic
classification (both including and excluding Yerevan), 2017
N Expenditures
2017
Act
ual
ex
pen
dit
ure
s of
adm
inis
trati
ve b
udgets
of
RA
mu
nic
ipali
ties
(in
clu
din
g Y
ere
van
),
thou
san
d A
MD
Sh
are
, %
Act
ual
ex
pen
dit
ure
s of
Yere
van
adm
inis
trati
ve
bu
dget,
th
ou
san
d A
MD
Sh
are
, %
Act
ual
ex
pen
dit
ure
s of
adm
inis
trati
ve b
udgets
of
RA
mu
nic
ipali
ties
(ex
clu
din
g Y
ere
van
),
thou
san
d A
MD
Sh
are
,%
TOTAL EXPENDITURES, including 124 393 783.4 100 70 990 187.0 100 53 403 596.4 100
A CURRENT EXPENDITURES (1+2+3+4+5+6) 120 589 545.2 95.7 70 108 782.7 98.8 50 480 762.5 91.7
1 Remuneration, including 23 381 993.2 19 5 788 338.9 8.3 17 593 654.3 34.9
1.1 Salaries and bonuses of employees 2 338 1913.2 19 5 788 338.9 8.3 17 593 574.3 34.85
1.2 Actual social security payments 80.0 0.0 80.0 0.0
2 Purchase of services and goods 24 423 490.0 20.3 13 593 402.1 19.4 10 830 088.8 21.5
3 Subsidies 47 892 638.6 39.7 34 112 716.5 48.7 13 779 922.1 27.3
4 Grants 5 517 605.5 4.6 811 587.10 1.2 4 706 018.4 9.3
5 Social allowances and pensions 4 425 454.6 3.7 2 531 254.4 3.6 1 894 200.2 3.8
6 Other expenditures, including 14 948 362.5 12.4 13 653 483.9 19.5 1 294 878.6 2.6
6.1 Reserve funds, including 10 615 355.0 8.8 9 287 375.2 13.2 1 327 979.8 2.6
6.1.
1
Transfers from reserve fund of the administrative budget to the fund budget of municipalities
1 519 693.8 1.2 382 000.0 0.5 1 137 693.8 2.3
7 Service provision costs, total (A - 5 - 6.1)
105 548 735.6 87.5 58 290 153.1 83.1 47 258 582.5 93.6
The table shows that in 2017 the share of total spending on services in the administrative
budgets of municipalities (including Yerevan) was 87.5%, and the same indicator without Yerevan
was 93.6%. Also, the share of spending on services in administrative budget of Yerevan was 83.1%.
The main reason for inadequate level and quality of municipal services in Armenian
municipalities remains the scarcity of financial resources. Below are indicators expressing the
volume of some municipal services.
In 2017, 577 (57%) out of 1005 settlements received water supply service by the LSGs, while
the remaining 43% received the same service from private companies.
In 2017, 298 (59%) out of 502 municipalities were provided with street lighting services, 18
(3.5%) received public transport services, 317 (63%) were provided with waste disposal service,
and 254 (50.5%) received pre-school education service.
According to the information provided by the RA Ministry of Territorial Administration
and Development, in 2017 the total number of municipal servants was 6324 and the total number
80
of employees in the local governance sector was 39324. That is to say, the total number of
municipal servants is only 16% of the total number of employees working in local governance
sector. At the same time, municipal servants mainly hold positions included in the staff lists of
municipality staff and carry out general functions provided in their service passports, and other
employees of LG sector are mainly engaged in municipal service delivery.
Official studies and analyses on the quality, efficiency, level of satisfaction of population,
and other similar quality indicators of the services are not yet implemented, and the system of
public quality indicators has not yet been developed and is not in use. So far, it is only possible
to state that to get a comprehensive picture based on qualitative indicators of municipal service
provision is rather complicated and controversial, as the situation differs significantly depending
on the municipality.
81
8. Results of the Local Governance Annual Assessment
(LG Index for 2015, 2016 and 2017)
Monitoring and evaluation of local governance system is of great importance for its
development. In international practice, indexing is widely used for monitoring and evaluation as
well, which is done by including a municipality or a cluster of municipalities, as well as with a
systemic or institutional approach to local governance. In the case of the latter, the quantitative
and qualitative information on the activities of all municipalities or local governments in each
country is collected and summarized every year and, the annual local governance index is
calculated in a given country with the use of certain methodology.
For this purpose, in 2017 in the framework of the USAID funded CELoG program, CFOA
and CRRC-Armenia drafted, “Annual Evaluation of Local Governance Reforms and Index
Calculation Methodology," 130 based on the international experience in that field and localization
of this experience in the RA local governance system as much as possible.
Based on the collected information and developed methodology, the CFOA expert team
(consisting of 7 experts), which drafts 7 sections of the annual monitoring reports of the local
governance system, conducts the annual numerical assessment of the local governance through
calculation of LGAI.
According to the drafted methodology, the calculation of LGAI is the result of the following
successive steps carried out by the CFOA expert group.
Definition of local governance sectors, functions and indicators, (The calculation of
local self-government index is based on five selected fields (directions), 20 functions
and 52 indicators, the list of which is presented in Appendix 7131),
Verification of compliance of indicators with selected principles of local
governance132,
Definition and justification of assessment criteria of indicators133,
Assessment of indicators134,
An arithmetic averaging of values of assessed indicators, according to local
governance functions and sectors, calculation of LGAI.
Detailed results of LGAI calculation for 2015-2017 years are presented in Appendix 7, and
LGAI calculation results based on sectors are presented in Table 32.
Table 32. Results of the Local Governance Annual Assessment (LG Annual Index, 2015,
2016, 2017)
130 Local Governance Annual Index, 2015 and 2016, Yerevan, 2017, www.cfoa.am 131 In 2017 like in 2015 and 2016 the LGAI was not calculated for three functions only (“Municipal Development
Programs and Budget (planning and budgeting), “International Support”, “Other Municipal Services”), for which
relevant indicators have not been defined yet. This may be explained by lack of information and complexity in
collecting information. Assessment of these functions has not been carried out yet. However, the mentioned
functions have been included in the respective list of functions with a view to define relevant indicators in the
future and include the assessment in the calculation of LGAI. 132 CoE, Committee of Ministers (2008), The Strategy for Innovation and Good Governance at local Level. 133 Assessment criteria have been chosen and applied according to the relevant indictor based on various
explanations and comments 134 All the indicators were assessed on a scale of 0-10 points, using assessment criteria of indicators.
82
N Sector Number of
indicators
2015 average score
(0-10 score)
2016 average score
(0-10 score)
2017 average score
(0-10 score)
1 Local governance
reforms 10 4.7 4.9 5.0
2 Municipal assets,
development
programs, finances
18 4.1 3.8 3.4
3 Local democracy 8 3.9 4.0 4.4
4 Municipal
management 4 5.8 4.8 5.3
5 Municipal (public)
service delivery 12 3.5 3.7 3.8
Average score of
local governance
sectors (LGAI)
52 4.40 4.24 4.38
Based on data analysis in Appendix 7 and Table 32, the assessment results of local
governance sectors (directions) for 2017 are presented below.
Based on the assessments of 10 indicators defined in “local self-government reform”
sector, the average score for 2017 is 5.0, which is by 5.0 higher than the average score for 2015
(4.7) and by 0.1 than that for 2016 (4.9). The increase of the score is conditioned by the decrease
of number of municipalities as a result of the administrative-territorial reforms in the country
(from 793 to 502). This is the reason for the increase of the average numbers of population and
administrative area of a municipality despite the fact that the share of municipalities included in
the inter-municipal co-operation structures in the total number of Armenian municipalities
decreased by 46.7% in 2015, 40.1% in 2016 and 35.3% in 2017.
Based on the assessment of 18 indicators defined in “municipal assets, development
programs and finances” sector, the average score for 2017 is 3.4 which is by 0.7 less than that
for 2015 (4.1) and by 0.4 less than that for 2016 (3.8). The decrease of the score is conditioned by
the following factors:
1) decrease of actual execution of revenues and expenditures of municipal budgets of Armenia
(including Yerevan) versus the annual approved plans (in terms of revenues from 99.6% to
92.7%, in terms of expenditures from 96.7% to 87.8)135;
2) decrease of the share of aggregate municipal budget revenues and expenditures in the
country’s consolidated budget revenues (from 10.7% to 9.9%) and expenditures (from 8.8%
to 8.1%);
3) decrease of the share of aggregate municipal budget expenditures in the country’s GDP
(from 2.56% to 2.23%);
4) decrease of per capita actual expenditures of the municipalities (including Yerevan) from
90.6 USD to 86.6 USD.
2015 and 2016 assessment results of other indicators in this sector are almost the same.
135 Significant decrease of these indicators is conditioned by low percentages of actual execution Yerevan's 2017
budget revenues and expenditures versus the approved plans (in terms of revenues 85.9% and in terms of
expenditures 84.1%).
83
3 functions and 8 indicators were defined in “local democracy” sector, based on the
assessments of which the average score was 4.4 for 2017, which is by 0.5 higher than that for 2015
(3.9) and by 0.4 than that for 2016 (4.0). The increase of the score is conditioned by the following
factors:
1) in 2017 the share of municipalities with official web-sites has sharply increased reaching
65.34% (29.5% in 2015, 22.7% in 2016);
2) in 2017 the share of municipalities (in the total number of municipalities with at least
5000 residents) that organized and conducted public hearings/discussions on the annual
report of budget execution increased considerably reaching 20.43% (8.3% in 2015, 9.8%
in 2016)
At the same time, the share of municipalities (in the total number of municipalities with at
least 5000 residents) that organized and conducted public hearings / discussions on draft of
municipal budget dropped to 46.24% in 2017 (68.1% in 2015 and 65.9% in 2016)
2015 and 2016 assessment results of other indicators in this sector are almost the same.
3 functions and 4 indicators were defined in “municipal management” sector, based on
the assessments of which the average score was 5.3 for 2017. It is by 0.5 higher than that for 2016
(4.8) but by 0.5 less than that for 2015 (5.8). The increase of the score in 2017 in comparison with
2016 is conditioned by the following factors:
1) the share of municipalities having MMIS increased, reaching 79.7% (65.4 in 2015 and 62.4
in 2016);
2) the share of trained municipal servants in their total number (including Yerevan)
increased in 2017 (839 municipal servants), reaching 13.0% (1268/20.9% in 2015 and
693/10.7% in 2016).
2015 and 2016 assessment results of other indicators in this sector are almost the same.
4 functions and 12 indicators were defined in “municipal (public) service delivery”
sector, based on the assessments of which the average score was 3.8 for 2017 which is by 0.3
higher than that for 2015 (3.5) and by 0.1 than that for 2016 (3.7). The increase of the score is
conditioned by the following factors:
1) in 2017 the share of municipalities providing with pre-school education increased,
reaching 50.5% (35.7% in 2015, 35.0% in 2016);
2) in 2017 the share of municipalities providing with extracurricular education increased,
reaching 38.0% (25.7% in 2015, 23.9% in 2016);
3) in 2017 the share of municipalities having general plans increased, reaching 15.5% (9.5%
in 2015, 10.7% in 2016);
4) in 2017 the share of municipalities providing with waste disposal service increased,
reaching 63.1% (66.4% in 2015, 70.5% in 2016).
At the same time, in 2017 the share of municipalities that provide with street lighting
services decreased in the total number of municipalities to 59.3% (66.4% in 2015, 70.5% in 2016).
2015 and 2016 assessment results of other indicators in this sector are almost the same.
To sum up, 20 functions and 52 indicators were defined in 5 local governance sectors, based
on the assessments of which the LGAI scored 4.38 points for 2017, which is by 0.14 higher
than that in 2016 (4.24) and by 0.02 less than that in 2015 (4.40). The increase by 0.14 in 2017 is
conditioned by the increase of the average scores of LG sectors except for “municipal assets,
development programs and finances” sector, the average score of which decreased in 2017 by 0.4
(Appendix 7 and Table 32).
84
Conclusions and Recommendations
Conclusions
The progress in Armenia's local governance sector is related to the process of legislative
regulation of certain provisions of the RA Constitution. In particular, in order to implement
Article 189 (Inter-municipal Unions) of the RA Constitution, in 2017 the RA Government drafted
and submitted the draft law on Inter-Municipal Unions to the National Assembly. In addition, an
important legislative amendment has been developed to bring Part 3 of Article 64 of the RA Law
on Local Self-Government in line with the Constitution, based on the fact that the provision was
recognized by the RA Constitutional Court as contradicting the requirements of Articles 1, 6, 9
and 179 of the RA Constitution.
Nevertheless, a number of provisions of the RA Constitution are not yet fully reflected in
relevant legislative acts. Particularly, such provisions include the right of municipality to be heard
when adopting a corresponding law by the National Assembly on the merger or division of
municipalities (Article 190 of the RA Constitution), the term " legal entity under public law "
(Article 180, Part 2), the provision “the head of municipality is responsible to the avagani" (Article
182,Part 4), the legislative definition of tax and non-tax sources required for implementation of
the municipality's mandatory tasks (Article 186, part 1) the provision on the legal control over
the implementation of the municipality’s own tasks only by the Government Authorized Body
(Article 188, Part 1).
Number of population in Armenia continues to decrease. As of January 1, 2018 the
population dropped by 13.2 thousand people as compared to the same period last year.
Administrative-territorial reforms launched in 2015 (amalgamation of municipalities)
continued in Armenia in 2017. By the end of 2017, as a result of state policy, "clusters" of
amalgamated municipalities have been defined by law, forming a total of 52 multi-settlement
municipalities. The logic behind these clusters was not accessible to the general public.
Information on the amalgamated clusters became available only after the publication of the draft
law on making amendments and additions to the RA Law on Administrative and Territorial
Division. In 2017, as in the past year, no local referendums were held, which is the result of
withdrawing the relevant provision from the RA Constitution.
The approaches in the process of amalgamation of municipalities in 2017 allow concluding
that certain downsides in the choice of amalgamated municipalities were recorded. It is unclear
why in some cases preference was given to "restoring" the former region, and in another case, it
was not.
After the territorial-administrative reforms, 450 municipalities have not yet been involved
in the process of amalgamation, which makes up half of the total number of municipalities before
the reforms have started. In other words, the process of the administrative-territorial reform in
Armenia is half completed. However, the issue of capital investments in the newly formed multi-
settlement municipalities remains unsettled.
The draft law on Inter-Municipal Unions put into circulation in 2017 has not been adopted
as of the end of 2017, hence no IMUs have been formed in 2017.
85
According to the aforementioned legislative package, favorable conditions will be created
for IMUs established by law in order to effectively delegate some powers vested in public
administration bodies to these IMUs and increase public access to services.
So, it seems that "insurmountable obstacles" that have prevented the central government
from continuing the decentralization process in Armenia for a long time and making it even more
powerful, are disappearing.
In the area of inter-municipal cooperation, “municipal associations” and “inter-municipal
unions" legal entities continued to operate in 2017. However, their activity is gradually declining
connected with the administrative-territorial reforms. In addition, as a result of amendments to
the Civil Code of Armenia, this type of organizational-legal form has been abolished, therefore
the same unions should undergo a re-registration and reorganize into any other organizational-
legal form.
There is no noticeable progress in cross-border cooperation and municipal involvement in
2017, the EU Eastern Partnership Territorial Cooperation Program, as part of the Armenia-
Georgia Operational Program continued to operate. In terms of Armenian-Iranian cross-border
cooperation, the Free Economic Zone "Meghri" was opened in 2017.
In 2017, the procedure of holding local elections, the order of nomination of candidates,
terms of office of local self-governance bodies remained unchanged. In 2017, as in previous years,
local elections were held in fairly weak competition environments, in many cases even in the
absence of the latter. According to the results of the direct election of mayors, most of those
elected (72.1%) were RPA representatives. The voter turnout in local elections was low as well.
Almost half of the voters did not participate in local elections.
In 2017 significant changes were made in the powers of municipality mayors, especially of
the mayor of Yerevan. As a result of most recent changes, the description of the powers of local
self-governance bodies were complied with the RA constitutional amendments and to the changes
made in the RA law on Local Self-Government. In the area of veterinary and phytosanitary, one
new power has been assigned to the municipality mayors and the mayor of Yerevan. New powers
were assigned to the administrative heads of multi-settlement municipalities as well.
The practical application of the initiative by residents to include an issue on the agenda of
the avagani session continued in 2017.
Armenia’s local democratic governance rating by the Freedom House declined in 2017.
The residents continued to file complaints to the Human Rights Defender on various issues
related to the activities of the LSGs.
The number of municipalities capable of broadcasting avagani sessions and other events of
municipal significance has increased by 8 reaching 33.
The decisions of local self-government bodies were posted for the first time under the
section "LSG acts" of the www.arlis.am web-site.
The level of financial independence of the municipalities remains low and the municipal
assets are outdated and worn-off.
As in the previous years, no deductions to municipalities from taxes and mandatory
payments to the RA state budget were made in 2017.
In 2017 municipalities did not receive any loans from commercial banks and are still far
from entering the credit market.
In 2017, municipalities did not issue bonds either due to the lack of a respective law.
86
In recent years, central authorities, with no financial resources for earmarked allocations in
municipalities, have tried to direct and introduce mechanisms to oversee the subsidies allocated
to municipalities based on financial equalization principle, which is absolutely unacceptable and
contradicts the existing legislation. On the one hand, they declare that the local authorities should
be independent and the powers should be decentralized, and on the other hand, they attempt to
dictate municipalities what they should do, which instead of decentralization, ultimately may
lead to even more centralization of power.
Comparing the indicators of Armenia and the EU Member States regarding the relevance
of LSG responsibilities and municipal financial resources, it becomes obvious that Armenia still
lags behind the EU member states, in particular, the share of aggregate municipal expenditures
in public spending and GDP per capita in the amount of revenue and expenditures of municipal
budgets. This means that in 2017 the level of decentralization of power in Armenia was still low.
Despite the fact that the absolute income and expenditure indicators of annual municipal
budgets of Armenian as well as their performance have increased substantially, the majority of
the Armenian municipalities are still unable to fully and completely implement all the powers
assigned to them by law, especially in terms of delivery of municipal services.
In 2017, the total revenues and expenditures of the Yerevan budget constitutes
approximately 57.3% and 57.1% of total revenues and expenditures of all Armenian municipal
budgets. And the revenues and expenditures per capita of all municipalities (without Yerevan),
are respectively about 2.4 and 2.3 times lower than those of the Yerevan budget.
In 2017, as compared with previous years, the share of municipal budget expenditures
according to functional classification (without Yerevan) is substantially different from the share
of Yerevan budget expenditure in total spending. For example, in 2017, the share of public service
expenditures in municipal budgets (without Yerevan) is the highest and equals about 40.9% of
total expenditures, 23.6% of municipal budgets (including Yerevan) and only 10.5% in the budget
of Yerevan.
Shares of current and capital expenditure of municipal budgets (including Yerevan) in total
spending have changed in different proportions over the past five years. If in 2013-2014 the share
of capital expenditure in total spending increased from 20.1% to 21.2%, in 2015 it dropped
dramatically and reached 9.4% in 2017.
In 2013-2014 the shares of capital expenditure in total spending of Yerevan budget was
23.4% and 24.7% respectively, since 2015 it has dropped sharply to reach 6.0%.
In 2013-2014 the shares of capital expenditure in total spending of RA municipalities
(without Yerevan) was 14.7% and 15.3% respectively, since 2015 it has decreased gradually to
13.8%.
In 2017, the share of salaries and bonuses (32.9%) in total spending calculated for all RA
municipalities (without Yerevan) is about 4.0 times higher than the same indicator for Yerevan
(8.2%), which is driven mainly by two factors: inflated staffs of the municipalities (excluding
Yerevan) and municipal organizations, as well as scarcity of municipal budget revenues.
The institutional and professional capacities of the majority of municipalities are still
insufficient to provide municipal services in full and with adequate quality, and the budgetary
resources of the municipalities are so scarce that they lead to a number of serious issues.
Indicators on education level of mayors have not undergone substantial changes.
87
In 2017, structural changes in municipal staffs have largely been attributed to the third
round of amalgamation reform and, as a result, the institution of administrative head of
settlements of newly formed multi-settlement municipalities was introduced.
The administrative heads of settlements are mostly the former heads of municipalities, but
they cannot replace the former mayor fully. The most disadvantaged group in the processes of
amalgamation is the heads of the amalgamated municipalities who were deprived of their status.
In 2017, citizen service offices were opened in 6 amalgamated municipalities (Meghri,
Gorayq, Sarapat, Arpi, Amasia, Noyemberyan). Their total number in the republic has reached
29, 20 of which are in multi-settlement municipalities.
There are still a lot of issues in public service delivery sector, among which low efficiency
level of municipal service, poor level of service staff selection, attestation, training and drawbacks
of professional advancement structures and incentive systems, etc. Without solving the
mentioned problems, further development and improvement of the system will be impossible.
The necessity of permanent improvement of municipal service system is driven by local –
governance reforms, as well as development of civil society components.
There is a lack of highly qualified staff in the system. The staff reserve, which, above all, is
designated to fill temporary positions, is still unable to fully perform its functions.
The analysis shows that in the area of municipal servants’ training, sufficient attention is
not paid to practical issues, the study and discussion of various possible situations. Another
shortcoming is that trainings mainly take a form of lectures, which significantly limits the
possibilities for gaining practical skills, increasing capacity building. The peculiarities of
perception levels of trainees are not taken into account either.
There are also other drawbacks in the area of municipal servants’ training, such as the
fragmentation of trainings, the loose connection between the real needs of the municipal servants
and training programs, the lack of modern teaching methods and techniques in the training
process, etc. One of the shortcomings of the system is that training programs are mostly compiled
by educational institutions and do not meet the needs and priorities of the participants. The state
authorized body only approves titles of training topics without specifying their content, as a
result the program does not fully meet the training requirements.
In 2017 the international organizations continued their programs in the area of local
governance. The experience in local governance sector shows that the international or local
organizations funded through foreign sources are often the initiating party taking the steps
towards the improvement of local self-government system. While exercising their missions they
cooperate with the government, local self-government bodies, civil society organizations, and
frequently with each other. However, the development of local self-government in Armenia is
impossible through initiatives, efforts and programs implemented only by international
organizations. In some cases the implemented projects, no matter how effective, are not
sufficiently coordinated with local governments and do not envisage their engagement and
ownership in community development projects. Moreover, mayors are often quite skeptical about
such projects and upon completion of the projects they simply return to their old, conservative
way of doing business.
No substantial changes have taken place in terms of increasing the powers of local
authorities and increasing the number of public services in 2017.
In almost all municipalities of Armenia, services are not provided fully and with inadequate
quality. The main reason of which is the lack of financial resources.
88
In 2017 the share of all municipal service expenditure in total spending of administrative
budgets (including Yerevan) was 87.5% and 93.6% without Yerevan. The share of service
expenditure in total spending of Yerevan administrative budgets was 83.1%.
Residents of non-central settlements of multi-settlement municipalities have difficulty
accessing municipal services. In some cases, residents of multi-settlement municipalities have
access to services that have not been previously provided within their residential areas.
Recommendations
Regardless of reforms in local self-governance system in 2017, many issues remain unsettled,
as a result of which the progress in the system is slow. In order to bring LG legislation in line with
the RA Constitution and ensure implementation of RA international commitments at the
legislative level, it is recommended:
Draft and adopt a package of legislative amendments to ensure participation of
municipalities in the process of amalgamation through the participatory and transparent
process, as defined by Article 190 of the Constitution of the Republic of Armenia.
Develop and implement formal mechanisms for the right to consult with local self-
governance bodies and their associations in policy-making and decision-making processes,
in line with the provisions of the European Charter of Local Self-Government of the
Council of Europe.
Draft and adopt a package of legislative amendments on legal and professional control
over the implementation of municipal issues in compliance with Article 188 of the RA
Constitution
Draft and adopt a package of legislative amendments to ensure the sustainability and
diversity of municipal budget revenues, decentralization of incomes, and increase of
municipal financial capacity.
Implementation of the decentralization of powers at a faster pace.
In the area of administrative-territorial reform it is recommended։
Continue and complete amalgamation reforms by promoting further development of LG
system.
When designing new amalgamation clusters, provide the public with exhaustive
information on economic calculations and logic behind the selection of these clusters, as
well as find out public opinion.
Take appropriate measures to clarify the process of capital investment in newly –formed
multi-settlement municipalities.
After the adoption and implementation of the RA Law on Inter-Municipal Associations
to start the process of establishment of inter-municipal associations and delegate the
powers from the central government to the LSGs through these associations.
Discuss with the public and adopt the "Decentralization Roadmap" draft, which has
already been developed and put into circulation by the Ministry of Territorial
Administration and Development, defining the approaches to decentralization of powers
in municipalities and some of the priority directions.
89
In the area of LSG formation, powers and civic engagement in local governance։
Switching to the proportional electoral system of elections of avaganis still remains urgent,
and the transition to the indirect elections of the mayor of municipality is a step backward
in the process of democratization.
Changes in the powers of local self-governance bodies should not be just formal, such as
renaming the sector describing the powers of Yerevan mayor twice during a year. The
decentralization of powers should be backed by necessary financial means.
Demonstrate consistency, in terms of increasing civic engagement in local governance and
applying all the opportunities and tools envisaged by law.
Increase the number of municipalities equipped with the opportunity to broadcast avagani
sessions and other events of municipal significance.
In order to increase the level of financial independence of municipalities and the
effectiveness of financial management, it is recommended։
Provide municipalities with new financing sources and means with a view to enable them
to exercise their powers defined by law fully and completely. In particular, this can be
done through deductions from state taxes to community budgets, introduce municipalities
to capital markets (borrowed funds, securities), etc.
Fix the proportions of state budget taxes shared with to the municipal budgets not in the
law on state budget on an annual basis, but by RA laws on Local Self-Government or the
law on Budget System of the Republic of Armenia.
Legislatively regulate the issues related to borrowing from commercial banks and financial
institutions, issuing bonds, as well as develop and apply systems and tools to assess the
creditworthiness of municipalities.
Emphasizing the role of the economy in the development of municipalities, pay special
attention to the support of small and medium-size businesses, agriculture and tourism and
plan the municipal development program and allocate funds from the annual budget
accordingly, as well as create joint enterprises with private sector (including with the
support and / or participation of the government of the Republic of Armenia).
Based on stage-by-stage results of municipal amalgamation and international experience,
plan and gradually implement decentralization of powers from public (including
territorial) bodies to municipalities raising the level of decentralization of power in the RA.
Institutionalize the process of defining and assessing of financial indicators of
municipalities taking into account the assessment results of financial indicators in previous
and current reports regarding the relevance of LSG powers and financial resources of
municipalities. To this end, it is necessary to elaborate and introduce a joint system of
defining, analyzing and assessing of financial indicators of municipalities ensuring access
to required information and regular update (for example yearly), as well as analysis,
assessment and publication of financial indicators on annual basis.
Work consistently to increase the level of municipal budgets' own revenue collection and
cost effectiveness.
Take measures to optimize the number of municipal servants and based on this, increase
their salaries.
90
Regarding the issues related to compatibility of administrative structures, human
and information resources with municipal issues and international assistance to
municipalities, it is recommended:
Improve the governance system of settlements incorporated in municipalities, through
improving the institute of administrative head of settlement, clarifying their powers and
revising the current procedure of their appointment.
In parallel with administrative changes, gradually shift from the traditional mechanical
structures of municipal staff to flexible organizational structures which can respond more
effectively to external changes and increase the effectiveness of governance.
Improve the temporary vacancy system by launching new sources of replenishing.
Based on differences among municipalities, develop and introduce differentiated
approaches to assist the stabilization of municipal service sector with a view to ensure
fulfillment of provisions of the law on Municipal Service.
One of the main issues of improvement of municipal service sector should be development
and consistent implementation of respective measures aimed at raising effectiveness of
training programs. Namely, the outcome of trainings should be defined, i.e. knowledge,
skills and capacities, which are to be acquired by the trainees at the end of the program.
Develop and introduce mechanisms enabling to get accurate information on specific
requirements and needs at the initial stage of drafting the training programs. However, in
addition to drafting the programs, the quality of the trainings is essentially dependent on
the choice and use of effective training methods.
In the sector of municipal service delivery, it is recommended։
Define clear mechanisms in the RA laws on Condominium and Management of Multi-
Apartment Residential Buildings, for collecting fees for compulsory norms, and set certain
fines for renunciation of payments by the owners, with a view to raise the level of
fulfillment of the obligations by the residents.
In general, make appropriate legislative changes related to application of appropriate
penalties for non-payment of municipal service charges.
91
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93. RA administrative-territorial division directory, Yerevan 2012, "Geodesy and Cartography"
SNCO
94. Google Maps, www.google.com/maps
95. The Council of European Municipalities and Regions (CEMR), www.ccre.org
96. www.bbvaresearch.com
97. eaptc.eu/en/program/view-armenia-georgia.html
98. www.ombuds.am
99. www.ogp.am
100. www.freedomhouse.org www.foi.am
101. www.cfoa.am
102. http://orer.eu/hy/
103. www.atdf.am
95
Appendix
Appendix 1.
Population of the Republic of Armenia during 2000-2018 (urban and rural population)
(thousands)**
1 Data by census * Figures are restated based on census results ** Data by National Statistics Service of RA
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
-
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
2000 2001¹ 2002* 2003* 2004* 2005* 2006* 2007* 2008* 2009* 2010* 2011¹ 2012 2013 2014 2015 2016 2017 2018
Rural population as of beginning of the year (thousands people)
Urban population as of beginning of the year (thousands people)
Population of Yerevan as of beginning of the year (thousands people)
Urban population (share in entire population)
Rural population (share in entire population)
96
Appendix 2.
Amalgamation of municipalities in 2017 (09.06.2017)*
№ Marz
Municipality,
/center/ and
(election day
of LSG)
Settlements Former
municipalities
Administrative
area (km2)**
Population
as of
01.01.2017
(people)***
1 Aragatsotn
Aparan,
/Aparan/,
(05.11.2017)
1 Aparan 1 Aparan 28.16 6165
2 Aragats 2 Aragats 56.47 3947
3 Arayi 3 Arayi 33.45 664
4 Apnagyugh 4 Apnagyugh 17.06 653
5 Yeghipatrush 5 Yeghipatrush 38.05 817
6 Yernjatap 6 Yernjatap 31.22 642
7 Ttujur 7 Ttujur 20.19 417
8 Lusagyugh 8 Lusagyugh 17.40 869
9 Tsaghkashen 9 Tsaghkashen 18.34 805
10 Kayq 10 Kayq 8.09 604
11 Hartavan 11 Hartavan 14.17 1001
12 Dzoraglukh 12 Dzoraglukh 27.77 326
13 Nigavan 13 Nigavan 53.35 733
14 Shenavan 14 Shenavan 18.90 1924
15 Shoghakn 15 Shoghakn 21.90 152
16 Chknagh 16 Chknagh 13.05 251
17 Jrambar 17 Jrambar 4.35 180
18 Saralanj 18 Saralanj 12.48 240
19 Vardenis 19 Vardenis 27.22 827
20 Vardenut 20 Vardenut 38.22 1011
21 Quchak 21 Quchak 40.87 2215
Total 21 21 540.71 24,443
2 Aragatsotn
Alagyaz,
/Alagyaz/,
(05.11.2017)
1 Alagyaz 1 Alagyaz 8.14 578
2 Avshen 2 Avshen 14.70 458
3 Kaniashir 3 Kaniashir 3.86 450
4 Charchakis 4 Charchakis 23.17 425
5 Mijnatun 5 Mijnatun 18.43 307
6 Miraq 6 Miraq 13.67 135
7 Shenkani 7 Shenkani 7.93 285
8 Jamshlu 8 Jamshlu 9.01 287
9 Rya Taza 9 Rya Taza 9.11 696
10 Sadunts 10 Sadunts 13.62 231
11 Sipan 11 Sipan 11.76 312
Total 11 11 133.40 4,164
3 Aragatsotn
Aragatsavan,
/Aragatsavan/,
(05.11.2017)
1 Aragatsavan 1 Aragatsavan 123.73 6180
2 Arteni 2 Arteni 37.07 3778
3 Getap 3 Getap 20.38 167
4 Lusakn 4 Lusakn 43.08 230
Total 4 4 224.26 10,355
4 Aragatsotn
Tsaghkahovit,
/Tsaghkahovit/,
(05.11.2017)
1 Tsaghkahovit 1 Tsaghkahovit 46.51 2217
2 Berkarat 2 Berkarat 17.48 1015
3 Geghadir 3 Geghadir 12.23 659
4 Geghadzor 4 Geghadzor 49.00 1334
5 Gegharot 5 Gegharot 14.79 574
6 Lernapar 6 Lernapar 17.89 558
7 Tsilqar 7 Tsilqar 14.22 608
8 Hnaberd 8 Hnaberd 22.74 2342
9 Norashen 9 Norashen 22.21 1228
97
10 Vardablur 10 Vardablur 10.84 648
Total 10 10 227.91 11,183
5 Gegharquniq
Chambarak,
/Chambarak/,
(05.11.2017)
1 Chambarak 1 Chambarak 96.32 5,691
2 Aygut 2 Aygut 63.91 910
3 Chapkut
4 Antaramej 3 Antaramej 16.21 161
5 Artsvashen 4 Artsvashen 39.05 0
6 Getik 5 Getik 27.32 469
7 Dprabak 6 Dprabak 40.51 593
8 Ttujur 7 Ttujur 31.03 1,117
9 Kalanavan 8 Kalanavan 26.37 150
10 Barepat
11 Dzoravanq 9 Dzoravanq 15.35 140
12 Martuni 10 Martuni 32.21 583
13 Vahan 11 Vahan 28.58 1,130
Total 13 11 416.86 10,944
6 Gegharquniq
Vardenis,
/Vardenis/,
(05.11.2017)
1 Vardenis 1 Vardenis 37.43 12550
2 Ayrq 2 Ayrq 33.27 538
3 Nerqin Shorja 3 Nerqin Shorja 36.59 81
4 Verin Shorja 4 Verin Shorja 21.80 110
Total 4 4 129.09 13,279
7 Gegharquniq
Geghamasar,
/Sotq/,
(05.11.2017)
1 Sotq 1 Sotq 75.75 972
2 Azat 2 Azat 14.38 136
3 Avazan 3 Avazan 17.75 198
4 Areguni 4 Areguni 40.27 361
5 Arpunq 5 Arpunq 31.01 587
6 Geghamabak 6 Geghamabak 4.91 126
7 Geghamasar 7 Geghamasar 48.62 1083
8 Daranak 8 Daranak 31.59 204
9 Kakhakn 9 Kakhakn 39.73 488
10 Kut 10 Kut 32.39 168
11 Kutakan 11 Kutakan 53.25 285
12 Zariver
13 Norabak 12 Norabak 41.71 271
14 Shatjreq 13 Shatjreq 6.94 462
15 Shatvan 14 Shatvan 12.70 445
16 Jaghatsadzor 15 Jaghatsadzor 11.42 155
17 Tretuq 16 Tretuq 27.12 215
18 Pambak 17 Pambak 36.50 533
19 Poqr Masrik 18 Poqr Masrik 18.24 800
Total 19 18 544.28 7,489
8 Gegharquniq
Shoghakat,
/Shoghakat/,
(05.11.2017)
1 Shoghakat 1 Shoghakat 39.23 563
2 Artanish 2 Artanish 56.25 605
3 Aghberq 3 Aghberq 39.80 319
4 Drakhtik 4 Drakhtik 96.38 1006
5 Tsapatagh 5 Tsapatagh 33.63 347
6 Jil 6 Jil 54.46 665
Total 6 6 319.75 3,505
9 Lori
Alaverdi,
/Alaverdi/,
(05.11.2017)
1 Alaverdi 1 Alaverdi 67.96 13491
2 Akner 2
3 Aqori 3
Aqori 53.94 2724
4 Tsaghkashat Tsaghkashat 27.64 217
5 Kachachkut 4 Kachachkut 43.33 325
6 Haghpat 5 Haghpat 57.46 816
7 Jiliza 6 Jiliza 44.81 104
98
Total 7 6 295.14 17,677
10 Lori
Akhtala,
/Akhtala/,
(05.11.2017)
1 Akhtala
1 Akhtala 18.90 2038 2
Aroghjaranin
kits
3 Shamlugh
2 Shamlugh 65.28 704 4 Akhtala
5 Bendik
6 Chochkan 3 Chochkan 42.85 2137
7 Mets Ayrum 4 Mets Ayrum 19.99 1194
8 Poqr Ayrum
9 Neghots 5 Neghots 14.88 314
Total 9 5 161.90 6,387
11 Lori
Stepanavan,
/Stepanavan/,
(05.11.2017)
1 Stepanavan 1 Stepanavan 53.34 12992
2 Armanis
3 Katnaghbyur 2 Katnaghbyur 110.86 882
4 Urasar 3 Urasar 45.14 410
Total 4 3 209.34 14,284
12 Lori
Tashir,
/Tashir/,
(05.11.2017)
1 Tashir 1 Tashir 76.24 7423
2 Blagodarnoye 2 Blagodarnoye 36.16 210
3 Dashtadem 3 Dashtadem 71.91 92
4 Lernahovit 4 Lernahovit 20.68 1051
5 Katnarat 5 Katnarat 74.16 1043
6 Medovka
6 Medovka 14.62 474 7
Kruglaya
shishka
8 Meghvahovit 7 Meghvahovit 78.65 168
9 Noramut
10 Novoseltsovo 8 Novoseltsovo 8.94 197
11 Saratovka 9 Saratovka 22.23 413
12 Getavan
Total 12 9 403.59 11,071
13 Lori
Gyulagarak,
/Gyulagarak/,
(05.11.2017)
1 Gyulagarak 1 Gyulagarak 24.51 2650
2 Amrakits 2 Amrakits 13.82 561
3 Gargar 3 Gargar 35.44 1354
4 Kurtan 4 Kurtan 20.93 2029
5 Hobardzi 5 Hobardzi 9.96 837
6 Pushkino 6 Pushkino 74.50 297
7 Vardablur 7 Vardablur 20.56 1324
Total 7 7 199.72 9,052
14 Lori
Lori Berd,
/Lori Berd/,
(05.11.2017)
1 Lori Berd 1 Lori Berd 5.20 426
2 Agarak 2 Agarak 27.02 1272
3 Bovadzor 3 Bovadzor 11.64 315
4 Lejan 4 Lejan 26.74 965
5 Koghes 5 Koghes 12.19 398
6 Hovnanadzor 6 Hovnanadzor 12.93 67
7 Yaghdan 7 Yaghdan 12.97 68
8 Sverdlov 8 Sverdlov 33.46 1107
9 Urut 9 Urut 28.26 1112
Total 9 9 170.41 5,730
15 Lori
Metsavan,
/Metsavan/,
(05.11.2017)
1 Metsavan Metsavan 69.51 5826
2 Dzyunashogh Dzyunashogh 16.94 129
3 Mikhaylovka Mikhaylovka 20.94 822
4 Paghpbyur Paghpbyur 59.99 121
Total 4 4 167.38 6,898
16 Lori 1 Shnogh Shnogh 94.38 3139
99
Shnogh,
/Shnogh/,
(05.11.2017)
2 Teghut Teghut 21.92 775
3 Qarkop Qarkop 0.39 403
Total 3 3 116.69 4,317
17 Lori
Sarchapet,
/Sarchapet/,
(05.11.2017)
1 Sarchapet Sarchapet 22.16 2062
2 Apaven Apaven 3.09 131
3 Artsni Artsni 5.61 286
4 Dzoramut Dzoramut 7.30 379
5 Gogavan
6 Norashen Norashen 14.13 1299
7 Petrovka Petrovka 5.64 196
8 Privolnoye Privolnoye 59.91 1056
Total 8 7 117.84 5,409
18 Lori
Odzun,
/Odzun/,
(05.11.2017)
1 Odzun 1 Odzun 78.80 5332
2 Amoj
3 Aygehat 2 Aygehat 14.31 210
4 Ardvi 3 Ardvi 9.81 190
5 Arevatsag 4 Arevatsag 8.64 792
6 Tsater 5 Tsater 6.86 375
7 Karmir Aghek 6 Karmir Aghek 3.71 145
8 Hagvi 7 Hagvi 32.75 461
9 Mghart 8 Mghart 11.72 459
Total 9 8 166.60 7,964
19 Kotayq
Byureghavan,
/Byureghavan/,
(05.11.2017)
1 Byureghavan 1 Byureghavan 3.88 9267
2 Jraber 2 Jraber 6.21 415
3 Nurnus 3 Nurnus 14.48 665
Total 3 3 24.57 10,347
20 Kotayq
Yeghvard,
/Yeghvard/,
(05.11.2017)
1 Yeghvard 1 Yeghvard 68.31 11896
2 Aragyugh 2 Aragyugh 26.93 1160
3 Buzhakan 3 Buzhakan 42.07 1778
4 Zovuni 4 Zovuni 13.95 5794
5 Zoravan 5 Zoravan 38.02 1705
6 Saralanj 6 Saralanj 16.18 394
Total 6 6 205.46 22,727
21 Kotayq
Charentsvan,
/Charentsavan/,
(05.11.2017)
1 Charentsavan 1 Charentsavan 5.57 20457
2 Alapars 2 Alapars 32.79 2380
3 Arzakan 3 Arzakan 84.63 2865
4 Bjni 4 Bjni 69.62 2898
5 Karenis 5 Karenis 8.93 858
6 Fantan 6 Fantan 45.38 1041
Total 6 6 246.92 30,499
22 Kotayq
Akunq,
/Akunq/,
(05.11.2017)
1 Akunq 1 Akunq 23.97 2178
2 Zar 2 Zar 75.14 1537
3 Zovashen 3 Zovashen 32.30 171
4 Kaputan 4 Kaputan 33.66 1340
5 Kotayq 5 Kotayq 14.31 2002
6 Hatis 6 Hatis 60.47 338
7 Nor 7 Nor 11.53 1634
8 Sevaberd 8 Sevaberd 42.97 262
Total 8 8 294.35 9,462
23 Kotayq
Meghradzor,
/Meghradzor/,
(05.11.2017)
1 Meghradzor 1 Meghradzor 123.81 2678
2 Gorgoch
3 Aghavnadzor 2 Aghavnadzor 35.61 1295
4 Artavaz 3 Artavaz 106.23 1003
5 Pyunik
100
6 Hankavan 4 Hankavan 82.88 101
7 Marmarik 5 Marmarik 31.41 769
Total 7 5 379.94 5,846
24 Kotayq
Jrvezh,
/Jrvezh/,
(05.11.2017)
1 Jrvezh 1 Jrvezh 18.51 6105
2 Zovk 2 Zovk 9.62 1043
3 Dzoraghbyur 3 Dzoraghbyur 26.96 2408
Total 3 3 55.09 9,556
25 Shirak
Ani,
/Maralik/,
(05.11.2017)
1 Maralik 1 Maralik 41.04 5462
2 Aghin 2 Aghin 17.94 606
3 Aniavan 3 Aniavan 1.36 488
4 Anipemza 4 Anipemza 7.35 467
5 Bagravan 5 Bagravan 62.55 917
6 Norshen
7 Gusanagyugh 6 Gusanagyugh 21.24 926
8 Isahakyan 7 Isahakyan 22.14 1072
9 Bardzrashen
10 Lanjik 8 Lanjik 15.00 995
11 Lusaghbyur 9 Lusaghbyur 23.96 719
12 Haykadzor 10 Haykadzor 30.19 558
13 Dzithanqov 11 Dzithanqov 25.77 1560
14 Dzorakap 12 Dzorakap 14.16 1237
15 Shirakavan 13 Shirakavan 18.67 847
16 Jrapi 14 Jrapi 25.79 1030
17 Sarnaghbyur 15 Sarnaghbyur 64.88 3468
18 Sarakap 16 Sarakap 26.27 623
19 Karaberd 17 Karaberd 26.34 1127
Total 19 17 444.65 22,102
26 Shirak
Akhuryan,
/Akhuryan/,
(05.11.2017)
1 Akhuryan 1 Akhuryan 28.47 9613
2 Aygabats 2 Aygabats 18.57 806
3 Arevik 3 Arevik 15.81 1851
4 Basen 4 Basen 45.87 1780
5 Kamo 5 Kamo 24.18 1508
6 Karnut 6 Karnut 19.36 1134
7 Hovit 7 Hovit 16.42 512
8 Jrarat 8 Jrarat 56.22 1158
Total 8 8 224.90 18,362
27 Shirak
Marmashen,
/Mayisyan/,
(05.11.2017)
1 Mayisyan Mayisyan 20.63 1955
2 Lernut Lernut 8.80 156
3 Kaps Kaps 8.12 926
4 Karmrakar Karmrakar 9.41 44
5 Krashen Krashen 13.40 282
6 Hatsik Hatsik 12.13 1010
7 Hatsikavan
8 Hovuni Hovuni 8.46 698
9 Marmashen Marmashen 14.01 2077
10 Mets Sariar Mets Sariar 23.26 410
11 Shirak Shirak 16.74 1156
12 Jajur Jajur 24.16 827
13 Jajuravan Jajuravan 0.26 218
14 Vahramaberd Vahramaberd 56.22 1895
15 Poqrashen Poqrashen 7.46 227
16 Keti Keti 17.53 1056
Total 16 15 240.59 12,937
28 Syunik 1 Kapan 1 Kapan 48.64 42571
2 Agarak 2 Agarak 18.51 165
101
Kapan,
/Kapan/,
(05.11.2017)
3 Aghvani 3 Aghvani 9.98 77
4 Achanan 4 Achanan 8.00 163
5 Antarashat 5 Antarashat 22.66 94
6 Arajadzor 6 Arajadzor 12.87 135
7 Artsvanik 7 Artsvanik 28.19 502
8 Geghanush 8 Geghanush 77.44 286
9 Gomaran
10 Davit Bek 9 Davit Bek 20.02 766
11 Yegheg 10 Yegheg 16.31 84
12 Yeghvard 11 Yeghvard 12.95 248
13 Khdrants 12 Khdrants 6.97 55
14 Tsav 13 Tsav 128.37 362
15 Shishkert
16 Kaghnut 14 Kaghnut 11.54 103
17 Dzorastan 15 Dzorastan 33.31 64
18 Chakaten 16 Chakaten 55.32 138
19 Nerkin
Khotanan 17 Nerkin Khotanan 3.25 65
20 Nerkin Hand 18 Nerkin Hand 60.79 82
21 Norashenik 19 Norashenik 10.28 81
22 Shikahogh 20 Shikahogh 41.67 122
23 Shrvenants 21 Shrvenants 5.14 60
24 Chapni 22 Chapni 10.48 76
25 Syunik
23 Syunik 22.17 1008
26 Bargushat
27 Ditsmayri
28 Khordzor
29 Sznak
30 Srashen 24 Srashen 21.22 83
31 Sevakar 25 Sevakar 18.74 88
32 Vanek 26 Vanek 16.52 52
33 Vardavank 27 Vardavank 7.77 99
34 Verin
Khotavan 28 Verin Khotavan 22.62 188
35 Tandzaver 29 Tandzaver 16.78 185
36 Tavrus 30 Tavrus 7.24 93
37 Uzhanis 31 Uzhanis 14.34 81
38 Okhtar 32 Okhtar 7.19 69
Total 38 32 797.28 48,245
29 Syunik
Sisian,
/Sisian/,
(05.11.2017)
1 Sisian 1 Sisian 33.20 14835
2 Akhlatyan 2 Akhlatyan 35.19 539
3 Aghitu 3 Aghitu 59.34 401
4 Angeghakot 4 Angeghakot 98.51 1663
5 Ashotavan 5 Ashotavan 12.29 621
6 Arnis 6 Arnis 58.56 82
7 Balak 7 Balak 10.30 167
8 Bnunis 8 Bnunis 36.59 120
9 Brnakot 9 Brnakot 72.81 1975
10 Getatagh 10 Getatagh 13.12 173
11 Dastakert 11 Dastakert 42.05 298
12 Darbas 12 Darbas 27.43 1069
13 Shamb
14 Tanahat 13 Tanahat 17.51 21
15 Tasik 14 Tasik 40.51 290
16 Ishkhanasar 15 Ishkhanasar 36.53 251
102
17 Ltsen 16 Ltsen 16.15 91
18 Lor 17 Lor 33.61 317
19 Hatsavan 18 Hatsavan 7.96 254
20 Mutsk 19 Mutsk 46.38 310
21 Njdeh 20 Njdeh 55.21 162
22 Tsghuni
23 Noravan 21 Noravan 41.44 455
24 Shaghat 22 Shaghat 111.81 988
25 Shaki 23 Shaki 74.00 1276
26 Shenatagh 24 Shenatagh 74.04 347
27 Vorotnavan 25 Vorotnavan 18.12 305
28 Salvard 26 Salvard 42.53 241
29 Vaghatin 27 Vaghatin 39.84 606
30 Tolors 28 Tolors 28.58 401
31 Torunik 29 Torunik 17.58 127
32 Uyts 30 Uyts 32.62 539
Total 32 30 1233.81 28,924
30 Syunik
Kajaran,
/Kajaran/,
(05.11.2017)
1 Kajaran 1 Kajaran 19.96 7050
2 Geghi
2 Geghi 171.99 153
3 Geghavank
4 Kard
5 Kitsk
6 Verin
Geghavanq
7 Karut
8 Lernadzor
3 Lernadzor 158.08 839
9 Andokavan****
10 Babikavan****
11 Katnarat****
12 Kavchut
13 Dzagikavan
14 Nerkin
Giratagh
15 Verin Giratagh
16 Pukhrut****
17 Nor
Astghaberd
4 Nor Astghaberd 112.01 99 18 Ajabaj
19 Getishen
20 Vocheti
21 Kajarants 5 Kajarants 120.05 197
Total 21 5 582.09 8,338
31 Vayots Dzor
Areni,
/Areni/,
(05.11.2017)
1 Areni 1 Areni 43.60 1964
2 Amaghu
3 Agarakadzor 2 Agarakadzor 58.79 1434
4 Aghavnadzor 3 Aghavnadzor 50.45 2003
5 Arpi 4 Arpi 13.59 1201
6 Gnishik 5 Gnishik 67.48 191
7 Mogrov
8 Yelpin 6 Yelpin 55.87 1207
9 Khachik 7 Khachik 71.93 968
10 Chiva 8 Chiva 31.16 827
11 Rind 9 Rind 45.00 1495
Total 11 9 437.87 11,290
32 Vayots Dzor 1 Gladzor 1 Gladzor 42.43 2546
103
Gladzor,
/Gladzor/,
(05.11.2017)
2 Getap 2 Getap 21.62 2413
3 Vernashen 3 Vernashen 67.29 1240
Total 3 3 131.34 6,199
33 Vayots Dzor
Yeghegis,
/Shatin/,
(05.11.2017)
1 Shatin 1 Shatin 46.19 1899
2 Aghnjadzor 2 Aghnjadzor 32.80 426
3 Artabuynq 3 Artabuynq 32.56 1160
4 Goghtanik 4 Goghtanik 49.90 195
5 Yeghegis 5 Yeghegis 30.52 438
6 Taratumb 6 Taratumb 20.73 501
7 Hermon
7 Hermon 56.44 210 8 Arates
9 Kalasar
10 Horbategh 8 Horbategh 19.50 264
11 Hors 9 Hors 34.19 263
12 Salli 10 Salli 19.18 243
13 Vardahovit
11 Vardahovit 107.12 239 14 Getikvanq
15 Sevajayr
16 Karaglukh 12 Karaglukh 27.52 834
Total 16 12 476.65 6,672
34 Tavush
Berd,
/Berd/,
(05.11.2017)
1 Berd 1 Berd 27.02 7679
2 Aygedzor 2 Aygedzor 169.73 1880
3 Aygepar 3 Aygepar 0.26 560
4 Artsvaberd 4 Artsvaberd 126.64 2848
5 Itsakar 5 Itsakar 53.86 315
6 Tsaghkavan 6 Tsaghkavan 24.47 853
7 Movses 7 Movses 27.69 1719
8 Navur 8 Navur 88.32 1049
9 Nerkin Karmir
aghbyur 9
Nerkin Karmir
aghbyur 19.71 1057
10 Norashen 10 Norashen 23.64 1616
11 Chinari 11 Chinari 46.95 933
12 Chinchin 12 Chinchin 29.39 552
13 Choratan 13 Choratan 19.77 1003
14 Paravakar 14 Paravakar 39.59 1613
15 Varagavan 15 Varagavan 22.72 578
16 Verin Karmir
aghbyur 16
Verin Karmir
aghbyur 37.14 1596
17 Tavush 17 Tavush 29.24 1600
Total 17 17 786.14 27,451
TOTAL 374 325 11,106.52 453,108
* According to the Law on making amendments and additions to the Law on Administrative-territorial division of RA,
09.06.2017 ** Source: RA Administrative-Territorial Division Directory, Yerevan 2012, "Geodesy and Cartography" *** Source: RA marzes and Yerevan in figures, 2017, National Statistics Service of RA
**** Mentioned settlements received the status of a "settlement" based on the RA law "On Making Amendments and
additions to the RA Law on Administrative-territorial Division", 09.06.2017. They were not considered a settlement
before.
104
Appendix 3.
Information on mayors and their elections in the newly-formed municipalities during 2017
Marz Newly-formed
municipalities
Former mayor of the
municipality which
became the center of the
newly-formed
municipality
Mayors of newly-formed
municipality
Party
affiliation of
the mayor
Nomination Options*
Former
municipality
where he/she
was a mayor
1
Aragatsotn
Alagyaz Mhoyan Aziz Makhmutov Jasm Non-partisan Self-nomination C
2 Aparan Abrahamyan Gor Yeghiazaryan Karen RPA RPA C
3 Aragatsavan Papikyan Andranik Papikyan Andranik RPA RPA A
4 Tsaghkahovit Hakobyan Norain Hakobyan Norain Non-partisan Self-nomination A
5
Gegharquniq
Geghamasar
(Sotq) Shahsuvaryan Kolik Avetyan Hakob RPA Self-nomination C
6 Chambarak Avalyan Yurik Adamyan Vazgen Non-partisan Self-nomination C
7 Shoghakat Shuhanyan Suliko Shuhanyan Suliko RPA RPA A
8 Vardenis Khloyan Volodya Harutyunyan Aram RPA Self-nomination C
9
Lori
Alaverdi Paremuzyan Karen Khechumyan Sasun RPA RPA C
10 Akhtala Khachikyan Haykaz Tamazyan Arkadi RPA Self-nomination B Chochkan
11 Gyulagarak Vardanyan Khachik Gevorgyan Mher RPA Self-nomination B Kurtan
12 Lori Berd Balayan Khachatur Nersisyan Arayik RPA RPA B Koghes
13 Metsavan Vardanyan Seryoja Vardanyan Seryoja RPA Self-nomination A
14 Shnogh Ghumashyan Davit Ghumashyan Davit RPA RPA A
15 Sarchapet Baroyan Boris Baroyan Boris RPA RPA A
16 Stepanavan Gharakeshishyan Mikayel Gharakeshishyan Mikayel RPA RPA A
17 Tashir Arshakyan Edgar Arshakyan Edgar Non-partisan RPA A
18 Odzun Titanyan Arsen Titanyan Arsen RPA RPA A
19
Kotayk
Akunk Rubenyan Hunan Rubenyan Hunan PA Self-nomination A
20 Byureghavan Balasyan Hakob Balasyan Hakob Non-partisan PA A
21 Yeghvard Sargsyan Norayr Sargsyan Norayr RPA RPA A
105
22 Meghradzor Hovhannisyan Karlen Hovhannisyan Karlen RPA RPA A
23 Charentsavan Shahgaldyan Hakob Shahgaldyan Hakob RPA RPA A
24 Jrvezh Petrosyan Robert Petrosyan Robert PA Self-nomination A
25
Shirak
Akhuryan Igityan Artsruni Igityan Artsruni ARF Self-nomination A
26 Ani (Maralik) Gevorgyan Artak Gevorgyan Artak RPA RPA A
27 Marmashen
(Mayisyan) Baghdasaryan Hakob Arshakyan Karen ARF Self-nomination C
28
Syunik
Kapan Hayrapetyan Ashot Hayrapetyan Ashot RPA RPA A
29 Sisian Sargsyan Artur Sargsyan Artur RPA RPA A
30 Qajaran Paramazyan Manvel Paramazyan Manvel RPA RPA A
31
Vayots Dzor
Areni Khachatryan Raffi Khachatryan Raffi RPA RPA B Rind
32 Gladzor Movsisyan Armen Movsisyan Armen Non-partisan Self-nomination A
33 Yeghegis
(Shatin) Khudoyan Tigran Stepanyan Artur RPA Self-nomination B Karaglukh
34 Tavush Berd Manucharyan Harutyun Manucharyan Harutyun RPA Self-nomination A
* Explanation Option “A” - elected person was the mayor of former municipality that became the center of newly-formed municipality
Option “B” - elected person was the mayor of former municipality that is one of the settlements of newly-formed municipality
Option “C” - elected person was a new candidate or had another position
106
Appendix 4
Area, population and number of local self-government units of European countries
(EU countries as of 2016, RA as of 2017)
Country Total area
/km2/ Total population
/people/
Number of local self-
government units
Area per municipality
/km2/
Population per municipality
/people/
0 Armenia 29,743 2,972,900 502 59 5,922
1 Albania 28,748 3,185,000 61 471 52,213
2 Austria 83,879 8,507,786 2,100 40 4,051
3 Belgium 30,528 11,203,992 589 52 19,022
4 Bosnia and
Herzegovina 51,209 3,825,000 145 353 26,379
5 Bulgaria 111,002 7,245,677 265 419 27,342
6 Germany 357,340 80,780,000 11,313 32 7,140
7 Denmark 42,921 5,627,235 98 438 57,421
8 Estonia 45,227 1,315,819 213 212 6,178
9 Turkey 783,562 75,837,000 19,695 40 3,851
10 Ireland 69,797 4,604,029 126 554 36,540
11 Iceland 103,000 333,000 74 1,392 4,500
12 Spain 505,970 46,507,760 8,176 62 5,688
13 Israel 22,072 7,822,000 260 85 30,085
14 Italy 302,073 60,782,668 8,006 38 7,592
15 Latvia 64,573 2,001,468 119 543 16,819
16 Poland 312,679 38,495,659 2,479 126 15,529
17 Lithuania 65,300 2,943,472 60 1,088 49,058
18 Luxemburg 2,586 549,680 105 25 5,235
19 Croatia 56,594 4,246,700 555 102 7,652
20 Cyprus 9,251 858,000 380 24 2,258
21 Kosovo 10,908 1,859,203 1,323 8 1,405
22 Greece 131,957 10,992,589 325 406 33,823
23 Hungary 93,024 9,873,000 3,201 29 3,084
24 Malta 316 425,384 68 5 6,256
25 Macedonia 25,713 2,108,000 82 314 25,707
26 Moldova 33,846 3,461,000 1,679 20 2,061
27 Montenegro 13,812 622,000 23 601 27,043
28 Netherlands 41,540 16,829,289 390 107 43,152
29 Norway 32,387 5,092,000 428 76 11,897
30 Sweden 438,574 9,644,864 290 1,512 33,258
31 Switzerland 41,285 8,211,700 2,324 18 3,533
32 Ukraine 603,500 44,941,000 10,885 55 4,129
33 Czech Republic 78,867 10,512,419 6,258 13 1,680
34 Portugal 92,225 10,427,301 3,400 27 3,067
35 Romania 238,391 19,942,642 3,181 75 6,269
36 Serbia 88,361 9,468,000 174 508 54,414
37 Slovakia 49,035 5,415,949 2,930 17 1,848
38 Slovenia 20,273 2,061,085 212 96 9,722
39 Georgia 69,700 4,323,000 72 968 60,042
40 Finland 338,435 5,451,270 313 1,081 17,416
41 France 632,834 65,856,609 36,658 17 1,797 *Source: The Council of European Municipalities and Regions (CEMR)
Available at
http://www.ccre.org/img/uploads/piecesjointe/filename/CEMR_structures_and_competences_2016_EN.pdf
107
Appendix 5.
Actual execution of municipal budget components and their shares in consolidated
budgets, 2015-2017*
N Budget type 2015
actual, bln AMD
Share in 2015
consolidated budget, %
2016 actual,
bln AMD
Share in 2016
consolidated budget, %
2017 actual,
bln AMD
Share in 2017
consolidated budget, %
Consolidated budget (1)
Revenues
Expenditures
Deficit (-)
including
1,201.7
1,444.0
-242.3
100.0
100.0
100.0
1,205.8
1,485.3
-279.5
100.0
100.0
100.0
1,276.2
1,540.7
-264.6
100.0
100.0
100.0
1. State budget
Revenues
Expenditures
Deficit (-)
1,167.7
1,409.0
-241.3
97.2
97.6
99.6
1,171.1
1,449.0
-278.0
97.1
97.6
99.5
1,237.2
1,503.9
-266.7
96.9
97.6
100.8
2. Municipal budgets
Revenues
Expenditure
Proficit (+) / deficit (-)
128.2
129.2
-1.0
10.7
8.9
0.4
128.6
130.2
-1.5
10.7
8.8
0.5
126.6
124.4
+2.2
9.9
8.1
-0.8
*) Source: http://www.minfin.am/index.php?cat=76&lang=1
1. Consolidated budget revenues, expenditures, proficit/deficit do not include incomes and expenditures from inter-
budgetary transfers.
108
Appendix 6.
Types and rates of local fees defined in accordance with
the RA law on Local Duties and Fees
N Local fee types Local fee rates
1.
For the development and approval of technical and economic
conditions related to reconstruction works altering the
appearance of a building or construction in the municipality.
Compensation fee for services provided by the
municipality.
2.
For construction completion document upon the completion of
the construction of buildings (including their reconstruction,
rehabilitation, strengthening, modernization, expansion and
renovation) after all construction works requiring construction
permits and envisaged in architectural -construction design
documents have been completed.
Compensation fee for services provided by the
municipality.
3.
For the formulation of the exploitation permit after completing
the works envisaged by the architectural-construction design
documents.
Compensation fee for services provided by the
municipality.
4.
For the preparation of necessary documents (package) in case of
allocation, withdrawal, and lease of municipally-owned lands,
which are also used by the municipality.
Compensation fee for services provided by the
municipality
5. For participation in competition and auctions organized by the
municipality.
Compensation fee for services provided by the
municipality.
6. For participation in fairs (vernissage) organized within the
administrative district of the municipality.
Compensation fee for services provided by the
municipality.
7. For organization of waste disposal service by the municipality
for those who pay respective fees.
1) for household waste
a) according to the number of registered
residents; each resident of the municipality
registered according to the rules of passport
registration and / or residing in the
municipality, the maximum fee is 400 AMD per
month,
b) by the total surface of the residential building
or flat, maximum of 25 AMD for one m2 surface
2) for non-household and bulky waste
a) according to the volume, maximum 3000
AMD for one m3 garbage
b) according to the mass, maximum 10,000
AMD for one ton of garbage.136
8.
For permission to legal entities or private entrepreneurs to
collect and transport construction and bulky waste, as well as to
those paying waste disposal fees to collect and transport
construction and bulky waste independently.
9. For central heating
In the amount of compensation with the
exception of tariffs in the regulated areas of
public services defined in accordance with the
RA law on Public Services Regulatory Body.
10.
For water supply and sewage in municipalities not included in
the service area of the water supply and sewage service
companies.
In the amount of compensation with the
exception of tariffs in the regulated areas of
public services defined in accordance with the
RA law on Public Services Regulatory Body.
11. For irrigation water supply in municipalities not included in the
service areas of water user associations established in
In the amount of compensation defining the
tariffs in the regulated areas of public services
136 According to the RA law on Garbage Collection and Sanitation
109
accordance with the Law on Water User Associations and Water
User Associations Unions.
defined in accordance with the RA law on
Public Services Regulatory Body.
12.
For complying with the mandatory norms for maintaining
common shared ownership of multi-apartment buildings
managed by the municipality.
Compensation amount
13. For users of municipally-owned kindergarten services Compensation amount
14. For users of municipally-owned extracurricular education
institutions (musical, painting and art schools, etc.). Compensation amount
15.
For organizing family or business events in the areas designated
as public recreation places by the decision of avagani, which are
furnished by the municipality or by the order of the
municipality and are located outside settlements, but within the
administrative area of the municipality.
Compensation fee for services provided by the
municipality
16. For access to municipally-owned historical and cultural
monuments and museums.
In the amount of compensation for services
provided by the municipality
17.
To park vehicles on municipally-owned roads and squares of
common use (with the exception of yard areas, neighboring
areas of educational, cultural and healthcare institutions, as well
as administrative buildings of state and local self –government
bodies).
1)up to 300 AMD per hour
2) up to 2500 AMD per day
3) up to 5000 AMD per week
4) up to 25000 AMD per month
5) up to 100000 AMD per year137
18. To provide document copies from the municipal archive. Up to 1000 AMD compensation amount for one
document
19. To make use of veterinary services in the municipality. Compensation amount
137 According to RA law on Local Vehicle Parking Charges
110
Appendix 7
Results of the Local Governance Annual Assessment (LGAI, 2015, 2016 and 2017)
N Sector, function, indicator 2015
score
2016
score
2017
score
1. Local self-government reforms
1.1 Legal and programmatic assessment of reforms
1 Compliance of local governance legislation with the RA Constitution (legal
application of constitutional provisions in the RA legislation), % 7 6 6
2 Compliance of local governance legislation with European Charter of Local Self-
Government (legal provision of relevant provision in the RA legislation), % 6 7 7
3 Degree of implementation of the commitments envisaged by the long and mid-
term programs of the Government of the Republic of Armenia, % 7 8 8
4
Degree of implementation of programs and commitments envisaged in the annual
activity plan of the Ministry of Territorial Administration and Development, as
the state designated body in local governance sector, %
8 8 8
1.2 Implementation of international commitments
5 Degree of implementation of commitments towards Council of Europe, Congress
of Local and Regional Authorities of CoE, % 6 7 7
1.3 Territorial-administrative reforms
6 Average number of population per municipality (excluding Yerevan), people 4 4 5
7 Average size of administrative territory per municipality, km2 4 4 5
1.4 Inter-municipal cooperation
8 Share of municipalities involved in inter-municipal cooperation structures, % 5 5 4
9 Average number of municipalities involved in inter-municipal unions formed on
voluntary basis 0 0 0
10 Average number of municipalities involved in inter-municipal unions established
by law 0 0 0
Average of the 1st sector indicators 4.7 4.9 5.0
2. Municipal assets, development programs and finances
2.1 Municipal assets
11 Shares of expenditures of municipal budgets of Armenia (including Yerevan) in
non-financial assets, % 3 2 2
12 Shares of revenues and expenditures of municipal budgets of Armenia (excluding
Yerevan) in non-financial assets, % 3 3 3
2.2 Municipal development programs and budget (planning and budgeting)
-
2.3 Municipal budget revenues
13 Share of municipal budget revenues in total consolidated budget revenues, % 4 4 3
14 Actual execution of municipal budget revenues (including Yerevan) versus
annual approved plan, % 10 9 7
15 Actual execution of municipal budget revenues (excluding Yerevan) versus
annual approved plan, % 10 10 10
16 Municipal budget actual revenues (including Yerevan ) per capita, USD 2 2 2
17 Municipal budget actual revenues (excluding Yerevan ) per capita, USD 2 2 2
18 Share of municipal budget own revenues in total budget revenues (financial
independence of municipalities), % 3 3 4
2.4 Debt management
19 Share of municipal budget loans in total revenues, % 0 0 0
20 Share of municipal budget credits in total revenues, % 0 0 0
2.5 Compliance of LSG powers and finances
111
21 Share of municipal budget expenditures in consolidated budget spending, % 3 3 3
22 Share of municipal budget expenditures in GDP, % 3 3 2
23 Actual execution of municipal budget expenditures (including Yerevan) versus
the approved plan, % 10 8 5
24 Actual execution of municipal budget expenditures (excluding Yerevan) versus
the approved plan, % 7 7 7
25 Actual municipal budget expenditures (including Yerevan) per capita, USD 3 3 2
26 Actual municipal budget expenditures (excluding Yerevan) per capita, USD 2 2 2
27 Share of general public service expenditures (including Yerevan) in total
municipal budget spending, % 6 6 6
28 Share of general public service expenditures (excluding Yerevan) in total
municipal budget spending, % 2 2 2
Average of the 2nd sector indicators 4.1 3.8 3.4
3. Local democracy
3.1 Democratization of electoral processes
29 Share of municipalities where elections for avagani members are held through
proportional system, % 1 1 1
30 Share of number of population in municipalities in the general number of
population of the Republic of Armenia, where elections for avagani members are
held through proportional electoral system, %
4 5 5
31 Share of municipalities nominating more than two candidates for direct elections
of mayors in the given year, % 6 6 6
32 Average voter turnout at LSG elections in the given year, % 6 6 6
3.2 Civic engagement
33 Share of municipalities which organized and held public discussions/hearings on
municipal draft budget, % 6 6 4
34 Share of municipalities which have official web pages, % 2 2 6
35 Share of municipalities with at least 5000 residents, which have consultative
boards under the mayor, % 5 5 5
3.3 Financial accountability
36 Share of municipalities with at least 5000 residents, which organized and held
public discussions/hearings on annual draft budget execution report, % 1 1 2
Average of the 3rd sector indicators 3.9 4.0 4.4
4. Municipal management
4.1 Human resource management and capacity building
37 Share of mayors with higher education, % 6 6 6
38 Share of municipalities having MMIS, % 6 6 7
4.2 Municipal service
39 Share of approved municipal positions (excluding Yerevan ) of administrative
staff in the total number of population, % 5 4 4
40 Share of trained municipal servants in their total number, % 6 3 4
4.3 International assistance
-
Average of the 4th sector indicators 5.8 4.8 5.3
5. Municipal (public) service delivery
5.1 Social services (education, culture, healthcare, sport, social protection, etc.)
41 Share of municipalities delivering pre-school education service, % 4 4 6
42 Share of children attending pre-school education institutions in the total number
of children of pre-school age, % 3 3 3
112
43 Share of municipalities delivering extra-curricular education services, % 3 3 4
44 Total expenditure per capita in recreation, culture and religion sectors, USD 3 3 3
5.2 Urban development-communal services (urban development, waste disposal, cleaning, increasing the area
of green zones, maintenance and exploitation of inter-municipal roads, water supply and drainage
systems, maintenance of residential and non-residential areas, cemeteries, etc.
45 Share of municipalities having a general municipality plan, % 1 2 2
46 Share of municipalities delivering waste disposal services, % 6 6 7
47 Share of settlements receiving water supply services from municipalities in total
number of settlements, % 6 6 6
48 Share of municipalities providing intra-municipal street lighting service, % 7 8 6
49 Municipal budget expenditures per capita (including Yerevan) in environmental
protection sector, USD 4 4 4
50 Municipal budget expenditures per capita (excluding Yerevan) in residential
construction and communal services, USD 2 2 2
5.3 Services of economic nature (intra-municipal public transport, trade, irrigation, agriculture, including
veterinary and medical-sanitary services, etc.)
51 Shares of municipalities providing intra-municipal public transport service, % 1 1 1
52 Municipal budget expenditures per capita on services of economic nature, USD 2 2 2
5.4 Other municipal services (registration of civil acts, environmental services, etc.)
-
Average of the 5th sector indicators 3.5 3.7 3.8
Annual local governance index 4.40 4.24 4.38
