Three presentations from the City of Hafnarfjörður

A number of interesting presentations were delivered at the 2016 annual municipal finance conference, which took place on 22–23 September. These included three presentations from staff of the City of Hafnarfjörður, covering private public partnerships, family services and educational services, and based on their experience and many years of expertise in these fields.

Haraldur L. Haraldsson, Mayor of the Borough of Hafnarfjörður, has for many years been involved in the analysis and management of municipalities throughout the country and possesses extensive knowledge in the field.  At a financial conference, he was invited to speak about private projects within local authorities and what to avoid in this regard.  In his presentation, he pointed out that nine out of the ten most indebted municipalities in the country, based on their debt ratio in 2011, had in common the fact that they had, or had had, private finance initiative contracts. He specifically noted that there are many pitfalls to be avoided with such contracts. Municipalities with a relatively good debt ratio, a debt ratio below 150%, for example, are likely to receive better loan terms than private companies, with a corresponding reduction in interest costs. The contractual position is also usually in the service provider's favour, with long and generally non-cancellable contract terms despite changed circumstances and market conditions. As a result, local authorities are often tied into unfavourable situations from which they find it difficult to escape. This can have significant long-term effects on their operations. Provisions regarding ownership at the end of the contract term are also often lacking, and a local authority can therefore end up having to repay the investment. It is necessary to allow for private finance contracts to include a clause for review during the contract term if the circumstances change. Likewise, the assignment of rights must be clear in the contracts and the conditions for pledging must be strict. The client should therefore have the right to refuse the pledging of the assets in question at any time and be fully aware of and consent to the transfer of rights. . The City of Hafnarfjörður has achieved considerable financial savings through a tender for major service areas not related to investments.

Rannveig Einarsdóttir, Director of Family Services for the City of Hafnarfjörður, gave a presentation on services for chronically ill children, where she posed the question, among others, as to whether the service has become a new responsibility for local authorities. The responsibility for this service is legally the state's, and as a result, a large number of children have fallen between systems and service levels, with consequent effects on the support provided to the child and their family.  Where a child falls within the system depends on an assessment of their physical condition and future prospects. Local authorities provide services for disabled children, while the state provides for those considered chronically ill, as this involves healthcare that requires specialised services and a very high level of staff training. Rannveig came forward with a personal account and a call for a clear division of responsibilities in this area. If the intention is to transfer the responsibility to local authorities, funding must be provided, for example through a equalisation fund. 

Vigfús Hallgrímsson, Development Officer for Hafnarfjörður's primary schools, discussed the School Barometer as a tool for local authorities to externally assess their primary schools, and how Hafnarfjörður uses the barometer to systematically assess its standing and performance in comparison with other schools.  The School Compass provides a fairly clear picture of each school's position, based on the standardisation of attitudes from pupils, parents and school staff towards the school's operations. The results are also used for the schools' internal evaluation and are considered to provide good indicators of developments within the schools and their position in comparison with other schools and local authorities. The School Barometer also displays key figures on school provision across schools within the local authority, trends in primary schools over a given period, running costs per pupil, the number of pupils per teaching staff member, results from standardised assessment tests, and more. The School Dashboard and its capabilities are constantly evolving to enhance evaluation within the local authority and to use the results for development and the implementation of tailored improvement projects within each individual school.

Staff of the City of Hafnarfjörður thank the Association of Icelandic Municipalities for an interesting and good conference.