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New Funding Tools – 18/02/2016
THE IMPACT OF SMART TECHNOLOGIES
ON THE MUNICIPAL BUDGET
The Uraia Platform
FMDV & UN-Habitat
The Uraia Platform: FMDV and UN-Habitat project
 FMDV (Global Fund for Cities
Development) : An international
network of cities specialized on
municipal finances.
 The Uraia Platform: gathers local
governments from around the world
to foster the exchange of experience
on how cities are using smart
technologies to improve municipal
finances,
services
efficiency,
transparency and participation.
The impact of smart technologies on the municipal budget
 Cities: under pressure to offer
services of quality to their citizens
with budgetary restraints => must
find innovative sources of revenues
and rationalize their expenditures.
 Smart technologies: offer huge
opportunities to improve municipal
finances either by increasing
revenue or reducing expenses.
Smart City Solutions to Increase Revenue
Composition
of
municipal
revenue: transfer from central
government; tax collection and
loans.
Smart technologies can assist local
governments
to
increase
endogenous funding:
1. Improve tax collection
performance;
2. Facilitate payments;
3. Build trust with citizens.
Improved tax recovery performance:
Data analysis to fight fraud
Where: Cook County (USA), 5 million
inhabitants
The problem: important frauds in tax property
collection (because of the auto-declaration of
exemptions ex. senior)
The solution: cross-check property tax records
with public databases (including death record)
The result: the county uncovered USD 10
million per year lost in fraudulent exemption
claims, in less than 2 years it had recovered it.
Improved tax recovery performance: Mapping tools
Where: City
inhabitants.
of
Sousse,
Tunisia,
250
000
The problem: important decrease in revenue from
tax on the use of public space by terraces, cafes,
restaurants …
The solution: develop a digital map, a geolocalized database (GIS layer), a follow-up
program and an application to communication with
the retailers.
Results: after 6 months operational, the registered
number of terraces had tripled and the municipal
revenues had already increased by 20%.
Smart Payments
Make it easier for people to pay
taxes, fines, licenses, bills, parking
tickets, building permits, business
licenses, etc. by:
- Facilitating access to information
- Reminding of deadlines
- Digital payment
- Two ways: both collection and
disbursements
Smart Payments
Mobile Money advantages:
- Reduce paperwork
- Fight fraud,
transparency
real-time
control,
increased
- Tackle informality
- Foster financial inclusion (between 30 and 50%
are banked in Latin America)
- Increase tax recovery
Smart Payments
Where: Dar-Es Salaam, Tanzania, 3.6 million
inhabitants. 6.6% urban growth per year. 70%
population informal settlements.
The problem: huge difficulty for collecting taxes, until
2013, everything was done manually, prone to
corruption and high administrative costs.
The solution: computerized mapping system of tax
payers (GIS); created a software for the database;
implemented a real-time monitoring system; and
developed the payment methodology through mobile
phone.
The result: in one year, the municipality
increased its municipal revenue in 300%.
Building trust in local government
Increased transparency and citizen engagement in public policies tend to
increase compliance of citizens to pay taxes.
Participatory budgeting : Brazil
Porto Alegre: since 1989, studies show it has
helped reduce tax fraud and increase property
taxes.
Belo Horizonte: has a digital PB since 2006,
has enabled the city to scale-up: almost 100
000 people participate
Smart Solutions to Reduce Costs
The expenses of the municipality are usually
composed of: internal functioning, services
and infrastructure, reimbursement of
loans.
Focus on how smart technologies can help
local governments reduce costs by:
1. Optimizing the administrative
procedures
2. Reducing energy consumption
Optimization of administrative procedures: e-government
Where: city of Valencia, Spain. 800 000 inhabitants
The initiative:
-
2007: e-government action plan.
-
2010: start of the digitalization of all processes and records of the
administration, mapping and training.
-
2014: launch of the Plataforma Integrada de Administracion
Eletronica (PIAE) and the Electronic Office.
The result: 100% of electronic management of records. 2500 municipal officers active
users. 20% reduction in processing time. In its first operational year, the project saved 170
million euros to the City Council (the cost of the project was 2 million€)
Generate savings with energy efficiency policies
 Energy efficiency policies have beneficial impacts both on the
environment and the energy bill.
 For cities, expenditure on energy often comes second after staff
and human resources.
Local governments
different levels:
- energy production,
- distribution,
- consumption.
can
act
at
With
a
variety
of
smart
technologies:
Technological
innovations
such as LED lighting, solar
panels, landfill gas-to energy
projects, etc.
ICT innovations that allow for
more efficient management
thanks to data analytics.
Generate savings with energy efficiency policies
Energy supply systems: smart grids
What it is: an energy network that uses digital and
ICT systems to monitor and manage the transport
of electricity from all generation sources to endusers. It involves smart meters, energy storage
devices, advanced grid controls and sensors,
accessible energy data for users, etc.
Generate savings with energy efficiency policies
Energy supply systems: smart grids
Expected results:
 Increase efficiency, minimize costs and environmental
impacts while maximizing system reliability.
 Reduced energy consumption of 10 to 15%;
 Savings for the municipality (due to less losses and
interruptions) and in the household energy bill (due to a
bigger control), between 10 and 20%.
Huge potential in Latin America where in average 9%
of the continent’s electricity is stolen, reaching 30% in
some regions (Brazil and Mexico).
Generate savings with energy efficiency policies
Management of municipal assets
=> Both street lighting and municipal
buildings represent each 40% of cities
energy bill.
Generate savings with energy efficiency policies
Management of municipal assets:
Street lighting
Solution: LED technology combined with a
sensor control network.
Results: lower greenhouse gas emissions,
reduced maintenance cost, reduced energy
cost (up to 80%)
Generate savings with energy efficiency policies
Management of municipal assets: Street
lighting
Examples:
- Los Angeles, replaced 150 000 street lights, cut
65% of energy consumption, saves USD 7 million
per year.
- Sensonate, El Salvador, replaced 4000 street lights,
50% energy consumption reduction.
- São Paulo: will replace 600 000 street lights, for
80% cut in the energy bill.
Generate savings with energy efficiency policies
Management
of
municipal buildings
municipal
assets:
Solutions to save energy in municipal buildings:
- Retrofit existing equipment
- Computer-based Management systems
- Local energy generation and storage systems
Expected results: up to 40% energy savings
Smart technologies represent huge opportunities,
BUT …:
 We need tailor-made
adapted to local contexts
solutions,
 The technology must be adapted to
local capacities to avoid digital
dependency
 When partnering with the private
sector: be sure to take the time to
negotiate the contract and to ensure
the transfer of knowledge and skills
 Include citizens in all processes
Save the date!
2016 Uraia workshop in Nicosia
(Cyprus), April 19 and 20th
“The impact of SMART technologies in
the municipal budget: improved tax
recovery and energy efficiency for
better services”
THANK YOU!
Mariana Nascimento Collin
Representative of FMDV in Brazil
Coordinator of the Uraia Platform with UN-Habitat
[email protected]
@UraiaCIT | @fmdv_org
www.uraia.org | www.fmdv.net