1. Speaker: Mr. Ewald SPITALER
Function: Environmental Engineer
(Waste / Waste Water /
Energy)
>> Inter-Municipal-Cooperation “The Why –
The How – Potentials, Risks and Roadmap
towards IMC” <<
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2. Content of Presentation
Chapter 1 - Introduction
Chapter 2 - Inter-Municipal-Cooperation – „THE WHY“
Chapter 3 - Inter-Municipal-Cooperation – „THE HOW“
Possible IMC/IRC structure – Satelite Model
Chapter 4 - Potentials, Risks towards IMC
Chapter 5 - Factors relevant for future steps and Roadmap
“Coming together is a beginning;
Keeping together is progress;
Working together is success”
Henry Ford © by es; 2012 2
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3. Chapter 1 – Introduction
Main – Objective of IMC:
>> The improvement of the QUANTITIY (Service Level) and QUALITY
(Performance) of the PUBLIC SERVICE PROVISION due jointly
identification of the technological most appropriate (BAT/BATNEEC),
financial affordable, economical feasible, environmental sound and
political acceptable solution with the focus on economical factors by
achieving positive ecological impacts for the welfare of the population of
the Republic of Moldova <<
FOUR main priniciples to be taken into consideration
• Development through Competition
• Income Generation instead of Expenses Generation
• Economical Ecology vs Ecological Economy
• Meeting the EU „AQUIS COMMUNAUTAIRE“
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4. Chapter 1 – Introduction
Intention of today´s meeting:
„To bring relevant stakeholder and decision maker together to increase
and harmonise the common understanding for future requirements,
technical solutions and financial needs and joint efforts“ and to
harmonise the intentions, comments, recommendations, critics,
suggestions and advises during the IMC development process.
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5. Chapter 1 – Introduction
PLEASE NOTE – PRIMARY CLARIFICATION !!!! IMPORTANT !!!!
• PUBLIC SERVICE PROVISION REGION (IMC structure) IS NOT
consequently ident with POLITICAL REGION
• PUBLIC SERVICE CANNOT become cheaper through IMC  IMC
supports the effect of expenses reduction
• There is NO ULTIMATE / UNIVERSAL / PERFECT Model of IMC
extisting  no state interference into Model, but into
timeschedule (to define the THAT and WHEN, but not the HOW)
• The model of IMC in the Southern Region may look totally
different to those applied in the Northern Part  Model
development are strongly depend on
• Local capacity (legal/institutional/technical/financial)
• Population density
• Geography/topography (eg. River Bazins)
• Economical capacity and affordability
• Political landscape © by es; 2012 5
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6. Chapter 2 – The WHY
LEGAL ASPECTS
Insitutional Aspects
• Development of one legal entity
Technical Aspects
for publicShare of administration
• service
Financial Aspects
• Increase Building and Strengthening of asset us
• of transparency
• Increased efficiency
• Meeting Local Governance Reduction of specfic investment
Capacities
• Share • infrastructure
of
Service Obligations capacitiesservice level
• Sharing of
• Increase costs
of
• Achieving implementation Reduction of operation costs
• Clear Responsibilty Structure
• Quantitative
•
needs • Supervision through Board
regarding EU • Qualitative efficiency increase
Acquis due to
• Centre•ofExtension of Service Areas curve
Competence
• Flattening of cost
• Uniform public awareness Billing and Accounting
• Extension of related services
• Uniform
strategy (eg. Recycling in SWM) establishment
and Cost Centre
• Prepares for PPP structures
• Meeting affordable tariff
structures (Cross subsidizing
method and flat fee structure) es; 2012 6
© by
• Increased revenue collection 6
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7. Chapter 2 – The WHY – The Financial Aspect
IMC provides mainly possitive financial implications
1. Reduced Specific Investment Costs (long-term reduction of
specific capital costs)
2. Increased efficient use of assets leads to fix cost degression
3. Capacity Sharing (eg. Admin) leads to expenses reduction
[Fix cost digression]
4. Other cost minimising factors
[Totaly Sum in € / hour]
17,00
16,50 16,47
16,00 Totaly Sum in € / hour
15,50
15,00
[in € / hour]
0, 120 14,50
14,00
13,83
13,50
0, 100
13,00 12,95
100 12,50
12,00
Nominal
Shift 1 Shift 2 Shift 3
0, 080
Totaly Sum in € / hour 16,47 13,83 12,95
90 Shifts
0, 060
Red.Invest
80
Fix Cost Degression
0, 040
70 other cost reduction factors
0, 020
Specific Investment Costs - IMC
60
Specific Investment Costs - Singular
0, 000
10 20 40 80 160 320 640 1280 2560 5120
50
40
30
20
10
0
1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,00
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8. Chapter 3 – The HOW – The ART
„Following inter-municipal and inter-rayonal
strategy in the interest of population without
losing local individuality and
to combine commercial oriented public service
with public interest“
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9. Chapter 3 – The HOW – Proposal of Sturtures
1.) IMC between Primarias and Communas  SERVICE CONTRACT
2.) IMC between Primarias and Communas to cover a Rayon
• One POE takes over the overall service provision
Service Contract
• POEs contracted by overall management for service provision
 Satelite Model at Sub-Rayonal-Level
3.) IMC between Rayons
• One POE takes over the overall service provision
Service Contract
• Rayonal POEs contracted by overall management for service
provision
 Satelite Model at Inter-Rayonal-Level
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10. Chapter 3 – The HOW
4.) Further steps
• Outsourcing of specific operational tasks (eg. Asset Management)
• PPP either with neighbourhood or private partners
5.) Agreement / Approval Chain
1. Proposal of structure to be developed individually on local level
according local conditions;
 Sub-Rayonal in agreement with Rayonal Authority 
Information to RDC
 Inter-Rayonal proposal  Approval by RDC
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11. Chapter 3 – Possible Structure on a Sub-Rayonal Level  IMC
Representative Rayon Authority
Rayonal Authority – Regulatory Body Sanitary Inspectorate
Management POEs related Mayors (2/3)
3 elected mayors representating
clients
Supervisory Board Observer/Adviser(non-voting)
Executive Management (Rayonal Company –
POE Rayonal) Cashflow
Service Contract
Collection
POE 3 POE 2 POE 1 Disposal
Treatment
Operation
Cash flow landfill
Cash Flow Localities
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12. Chapter 4 – Possible Structure on Inter-Rayonal Level  IRC
Satelite Model – Linking of the operation units to General Management
Rayon 3 Rayon 2 Rayon 1
Waste Waste
Waste
Inter-Rayonal Waste Managment
SWM Core businesses
Collection Treatment Disposal PR
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13. Chapter 4 – Possible Structure of Inter Rayonal Approach  IRC
Satelite Model – Linking of the operation units to General Management
General Inter-Rayonal Waste Managment
FINANCE MANAGEMENT
Request
Finance
Inter-Rayonal (Shadow) Balance
Rayon 1
Financial Accounting
Financial Accounting
Financial Accounting
Account
Bank
Rayon 1 Account
Rayon 2 Account
Rayon 3 Account
Accounting
Client
Cashing
Billing
Consolidation
Budget
PIANO
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14. Chapter 5 – Potentials and Risks
1. Opportunities / Potentials 2. Risks and Challenges
+ +
a.) Increased quantitative and qualitative a.) Missing support and technical
service provision assistance during the implementation
b.) Centre of Competence development phase
c.) Capacity sharing with neighbourhood b.) Legal binding structure by national
d.) Reduction of specific investment costs authority (see Austria)
– flattening of cost curve c.) Missing political willingness joining IMC
e.) Cost Centre development – uniform structures
accounting structure d.) Already existing PPPs – difficult to
e.) Cross subsidizing and meeting of incorporate into an overal structure
local/rayonal overal affordability e.) Delay in baselining and information
f.) Focuse on core activities sharing
g.) Preparation for outsourcing and PPP f.) Finding of concense in assignment of
structure executive board and supervisory board
h.) Increased transparency due to clear g.) Surplus vs. Profit (POE vs. LTD)
responsibility distribution – h.) Parallel structures in service provision
operation/management/controlling (funding issue)
i.) Uniform public awareness strategy i.) continuation of usage of out-dated
j.) One-hand operational and budget facilities due to cost reasons
planning j.) Continuation with non-core busineses
k.) Rural development component © by es; 2012 14
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15. Chapter 5 – Required next steps and Roadmap
1. Formulation of the structure and strategy
2. Agreement and approval by Rayonal Authority or Regional Development
Council
3. Establishment of POE or LTD including relevant statutes
4. Establishment of supervisory board
5. Assignment of required executive mangement staff
6. Baselining and Assetevaluation
7. Detail definition of financial procedure (Accounting Program)
8. Proposal for assets, staff and cash – split / shares / participation
9. Detail definition of operation procedure
10. Detail definiton of service extension (area and kind)
11. Unbundling Process of core and non-core actvities and contracting of
services to existing structures
12. Only more technical assistance and financial support of IMC structures
13. Linking the operative Units with the inter-rayonal company
14. Integration of existing inter-municipal facilities (recycling centres, etc.)
15. Perparation of consolidation budget for a minimum period until new fiscal
year
16. Information Campaigns during the whole and overal process © by es; 2012 15
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16. Chapter 5 – Required next steps and Roadmap
Roadmap:
3- phase approach
• Preparatory Phase
• Transition Phase
• Optimisation Phase
3- topic appraoch
• Legal / Institutional
• Technical
• Financial
 9 phases
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17. Chapter 5 – Required next steps and Roadmap
Technical Phase
a.) Preparation Phase:
Asset Summarization and data collection 
o Vehicles 
o Store inventory 
o Office Inventory 
o Construction (Buildings, Network…) 
b.) Transition Phase:
Asset Transfer according Cost Centres (Example) 
POE 1 - N1
Rayonal Office - RC
Preparation of Asset lists 
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18. Chapter 5 – Required next steps and Roadmap
Technical Phase
b.) Transition Phase:
Singing and confirming of transfer 
o Signing by SB
o Signing by Municipality
o Signing by Rayonal Directorate
Transfer of the values into regional financial account (by using cost centre
structure) 
Store and warehouse goods – transfer of the values into regional financial account
(cost centre – IMC Management = Regional Office – RO) 
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19. Chapter 5 – Required next steps and Roadmap
Technical Phase
c.) Optimisation Phase:
• Distributing assets according needs, by not loosing the owner and
custodianship

• Concentration of waste treatment as within few centres 
• Internal technical and service quality standard 
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20. Chapter 5 – Required next steps and Roadmap
Administrative Issues
Preparation Phase:
• Staff list and function distribution 
• Staff splitting and function distribution 
• Uniformity of staff requirement 
• Optimisation of function and administration 
• Announcing an acting regional director 
• Announcing and acing regional finance manager 
• Organigram and function distribution optimised 
• Service contract list 
• Working contract list 
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21. Chapter 5 – Required next steps and Roadmap
Administrative Issues
Transition Phase:
• Organization of an regional office 
• Follow up of administration staff reduction plan 
• Implementation of organigram 
• Change of positions (directors to managers) 
• Transfer of Working contracts 
• Transfer of service contracts 
• Preparatory work for SB meetings 
• Preparation of Statutes and cooperation agreement 
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22. Chapter 5 – Required next steps and Roadmap
Administrative Issues
Optimisation Phase:
• Optimisation of internal structure 
• Additional service contracts with regional office 
• Payment of compensation fee for released staff 
• Internal education and qualification standard 
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23. Chapter 5 – Required next steps and Roadmap
Financial Issues:
a.) Preparation Phase:
• Uniformity of Billing System and Accounting System (Piano) 
• Uniformity of Code of Accounts 
• Up to date client accounting 
• Up to date financial accounting 
• IMC /IRC budget (debt – operational costs for 6 months) 
• Closing of the financial accounts – final balance 
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24. Chapter 5 – Required next steps and Roadmap
Financial Issues:
b.) Transition Phase:
• Implementing of Cost Centre Financial Accounting Model in the Rayonal
office 
• Opening balance into the different cost centres 
• Implementation of financial standards - request form 
• Opening of an separate Bank account 
• Transfer of Cash 
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25. Chapter 5 – Required next steps and Roadmap
Financial Issues:
c.) Optimisation Phase:
• Financial reporting central 
• Debt reduction measurements (starting from authority debts) 
• Uniform salary strategy 
• Uniform tariff and revenue strategy 
• Business reporting service and plan 
• Internal financial minimum standards 
FINAL RECOMMENDATION
Implementation of two working groups on Rayonal levels
I.) - Legal / Institutional
II.) - Technical / Financial
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26. Thanks for your kind
attention
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27. Questions, Discussions, Comments, Requests outcome
and technical applicability (micro/macro-level)
Points of Discussion / Commments / Suggestions / Critics / Recommendations.....
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