Project developed by NOTORIA INTERNATIONAL and published on http://lean6sigma4all.eu/war-room/.

1. LOCAL ADMINISTRATION REFORM
IN CYPRUS
PROPOSALS AND ACTIONS
Nicosia April the 21st
. 2015
Ing. Mauro Giorgini
Executive overview

2. νθρωπος μέτρονἄ
“Man is the measure” (Protagoras)

3. • Established in January 2015, as spin off from HIG.
• Its core business is:
• Quality and productivity improvement
• Education delivering on: Lean Six Sigma, leadership and Design for Six Sigma
• It actively cooperates with Kpmg Italy and Kpmg Cyprus, on quality
and productivity improvement projects. Concerning the Cyprus local
reform project, Notoria International and Kpmg are in alliance.
NOTORIA International
Kpmg Italy
• Kpmg Italy, has a strong knowledge and a deep experience on:
• Debt restructuring: Comune di Roma (8.000 M€ restructured)
• Recovery plan for local administrations: ANCI, Regione Lazio, Regione Piemonte
• Recovery plan for central administration: Italian Health Ministry

4. Total Operating Costs: 267.231.288 €
Total Income: 256.255.853 € ( of which 20% subsidy)
Total Debt 500 M€
Total annual Interest to pay: 11.726.300 € (500 M€ total debt)
Need for more cooperation between Municipalities
No complete financing and administrative autonomy
Need for more process monitoring and control
No quality goals assignment
No common HR approach
Processes to optimize: Waste collection, Road Maintenance, Building
Permits, Hygiene, Traffic warden
Processes to improve: Green area, Parking Mgmt., HR
Processes to change: Waste Mgmt., Road Lighting, Night stay fee
FINANCING PERSPECTIVE
FOR ALL MUNICIPALITIES
IN CYPRUS
GENERAL PERSPECTIVE
FOR ALL
MUNICIPALITIES IN
CYPRUS
PROCESS PERSPECTIVE
FOR ALL MUNICIPALITIES
IN CYPRUS
NOTORIA’S ASSESSMENT RESULT (based on 2012 financial data)

5. OPTIMIZATION
AND
PRODUCTIVITY
IMPROVEMENT
83,8 M€ of total saving
In 2,5 years time frame
-24,5 M€ in the first year
-51,3 M€ in the second year
-8,0 M€ in the third year
CLUSTERING
ADMINISTRATION
COUNCIL
DEBT REDUCTION
70,5 M€ of total saving
In one year time frame
500 M€ debt write off in
10 years
15M€ yearly as Early
Retirement fund
MUNICIPALITIES
CONSOLIDATION
22 Municipalities
- 14 M€ of total saving and 222 people to redeploy
12 Municipalities
- 59 M€ of total saving and1.223 people to redeploy
STEP 1 STEP 2 STEP 3
NOTORIA PROPOSALS
45% reduction in the today total operation cost

6. MUNICIPALITIES COMMUNITIES
CLUSTERS
Municipality
with
Municipality
CLUSTERS
Community
with
Community
CLUSTERS
Municipality
with
Community
DISTRICTS
Transfer functions (1)
DISTRICT
COUNCILS
Transfer functions(2)
Monitoring & service consolidation(3)
Function (1):
-Hygiene
-Road M/A
-Building Permits
-Road Lightning
-Green area
Function (2):
-Town planning
-Water board
-Sewerage board
-Resources development
Monitoring (3):
-Budgeting
-Process standardization
-Operations homogenization
-KPIs
Service consolidation (3):
-Single HR
-Single purchasing office
CENTRAL
GOVERNMENT
LOCAL
GOVERNMENT
NOTORIA PROPOSAL ON LOCAL ORGANIZATION STRUCTURE

7. RURAL 5 URBAN 1 or URBAN 5
RURAL 3
RURAL 2
RURAL 1
RURAL 4
RURAL 6
RURAL14
URBAN 3
RURAL 11
RURAL 12
RURAL 13
RURAL 19
RURAL 7
URBAN 2
RURAL 8
RURAL 10
RURAL 9
URBAN 4
RURAL 15
RURAL 17
RURAL 18
RURAL 16
23 Clusters: 4 Urbans, 19 Rurals
NOTORIA PROPOSAL ON CLUSTERING (according to our assessment)

8. D E S I G N
DATA
COLLECTION
DATA
ANALYSIS
WHAT IF
ROLL OUT
RECOVERY
PLAN
3 MONTHS
One Urban Area: Larnaka or Limassol or Nicosia
One Rural Area: Only Communities
One Mixed Area: Municipalities and Communities
Cluster division, Who with Whom
Organization infrastructure
Today Cost-Income projection
Cost-Income estimation after Recovery Plan
Recovery Plan
BILL
DEFINITION IMPLEMENTATION
STEP 0
Roll out
Kick off date
Process optimization / debt write off
Clustering
Districts restructuring
KPIs – outsourcing & improving projects
Consolidation
1 MONTH
Cost-Income
after
Cost-Income
today
As case studies
to build up a
sustainable
Recovery Plan
NOTORIA PROPOSAL ON HOW TO MOVE ON

9. MINISTRY
OF
INTERIOR
PROJECT ADVISOR
Assessments
Suggestions
Know how
PROJECT MANAGEMENT
Strategy
Project plan
Strategic coordination
Project status
Actions plan
Achieved results
Project’s cost
PROJECT OPERATION
Actions
Coordination
Monitoring & control
Project status
Problems
PROJECT ASSURANCE
Coordination
Check results
Problems
DISTRICTS
MUNICIPALITIES
Sewerage Boards
Water Boards
COMMUNITIES
Coordination
Monitoring & Control
Actions
Monitoring
&
Control
Results
Results
Results
Results
Results
NOTORIA PROPOSAL ON HOW TO ORGANIZE THE PROJECT TEAM
Results verification
“Recovery plan” actual/plan
every 3 months

10. Process optimization:
in 1 year  24,5 M€ savings
Clustering:
in 1 year  36,0 M€ savings
Consolidation (30 to 22):
in 1 year  14 M€ savings plus
222 staff to reallocate
EFFICACY EFFICIENCY
KPIs-Outsourcing & Improvement projects:
in 2 years  77,8 M€ savings
ORGANIZATION
Districts:
in 1 years  16,0 M€ savings
SCHEDULE
TOTAL SAVING 168,3 M€
DEBT WRITE OFF IN 10 YEARS
RETIREMENT FUND: 15 M€/year
1° Year 2° Year 3° Year
Process optimization
Clustering
Districts
KPIs-Out. & Improv. Prj.
Consolidation
ECONOMIC BENEFITS

11. CASH FLOW
1° Year 2° Year 3° Year 4° Year
1,8 M€
7,7 M€
7,0 M€
14,0 M€
7,0 M€
24,5 M€
36,0 M€
End ProjectStart Project
27,0 M€
29,6 M€
24,5 M€
18,0 M€
16,0 M€
14,0 M€
Process improvement
Clustering
Districts
KPIs – Outsourcing & Improv. Projects
Project Management
LED Improvement Project
Waste Mgmt. Improvement Project
1,0 M€
77,8 M€
24,5 M€
36,0 M€8,0 M€
16,0 M€
7 months
13,0 M€
Consolidation
- 16,5 M€ - 23,5 M€
+ 61,5 M€
- 8,0 M€
+ 133,1 M€ + 168,3 M€

12. • Use the today grant to write off in 10 years the Local Government debt.
• Establish a solidarity fund among the Local Entities.
• Establish an early retirement fund.
• Reduce the operating costs and increase the revenue, by:
• increasing the efficiency and the process performance
• adopting the cluster between the local entities
• Implementing infrastructural projects, like: LED and Pay As You Throw
• Establishing KPIs and quality targets to achieve
• Revisiting the today District’s duties
• Standardizing the purchasing
• Appling a consolidation process to the municipalities
• Establish an independent administrative layer, District Council, having the aim to:
• Increase the local administration operation transparency, through a check and balance approach
• Take the responsibilities for services that overcome the municipalities borders, like:
• Town planning
• Sewerage Board
• Water Board
• Take the responsibility for the local government HR
• Take the responsibility for the local government purchasing
• Assure the respect of the services quality targets to the citizens
• Guarantee the right application of the service’s standards and procedures
CONCLUSION