Project 4. Capacity Development for National Urban Governance

Intended Outcomes

Outcome No. 1: Effective and Efficient Urban Development Management

Key Result Areas

KRA NO. 2: Institutions Development
KRA NO. 3: Capacity Building

Rationale

The Asian Development Bank (ADB) Technical Assistance (TA) on Strengthening the Capacity of the Housing and Urban Development Sector presented recommendations for the creation of the Department of Housing and Urban Development, conversion of the Housing and Land Use Regulatory Board (HLURB) into a Housing and Urban Development Adjudication Commission (HUDAC), all of which are embodied in a bill passed by the House of Representatives and now under floor deliberation in the Senate.

The bill, which was certified by the President, is expected to be eventually passed. A technical assistance package has been prepared by the ADB to support the implementation of the Department of Housing and Urban Development (DHUD) bill. This proposed project is intended to fine-tune the scope of the TA and give the technical assistance package more substance and clarity based on the sector reengineering study and the expected provisions of the bill that represent significant change from the time that the ADB TA was prepared.

The passage of the bill will considerably improve national government functions and capacities in urban governance. But this reengineering effort will not be complete if complementary reforms are not made to match the DHUD and HUDAC reforms with corresponding reforms in the functional delineation and coordination of departments whose functions are related to urban development or have tremendous impact on urban development, and if the systems that provide support to sound sectoral planning, monitoring and performance management are not put in place.

Therefore, this project proposes a holistic look in improving the overall national government machinery for urban development particularly in defining the roles and functions as well as relationships among pertinent departments—Department of Interior and Local Government (DILG), Department of Agriculture (DA), Department of Environment and Natural Resources (DENR), Department of Public Works and Highways (DPWH), Department of Transportation and Communications (DOTC), Department of Health (DOH), Department of Social Welfare and Development (DSWD), and other departments. It will examine the responsiveness and appropriateness of the national government oversight systems to urban development concerns (budgeting system, national economic development planning, investment planning, sectoral planning), and assess sub-department agencies engaged in urban development and related concerns, and the relevance of their functions.

Such review should result in recommendations for rationalizing and improving the overall institutional structural and operating systems setup for urban development at the national level.

Objectives

1. To redefine the role of the national government and its departments and agencies in urban governance within the context of meaningful devolution and participation.
2. To rationalize and improve the national government institutional framework for urban development by reengineering and delineating roles and functions, and by clarifying the inter-relationships among pertinent national government agencies.
3. To build the capacities of key urban development agencies in the various aspects of urban governance.

Project Components/Scope of Work

1. Operationalization and Capacity Building of the DHUD/Interim HUDCC
2. Operationalization and Capacity Building of the HUDAC and Preparation of the HUDAC rules
3. Formulation of a Coherent Urban Planning System (with Mechanisms for Linking Macro-Economic and Sectoral Planning with Urban Development Framework and Strategy Formulation)
4. Study on the Delineation and Synchronization of Urban Development/Governance Functions of HUDCC/DHUD, NEDA, DILG, and the sectoral departments, as well as other pertinent national government agencies.

A. Operationalization and Capacity Building of the DHUD/Interim HUDCC

The bill defines the mandate, functions and primary formal structure of the new Department of Housing and Urban Development. It also provides for the detailed design and installation of the internal structure and key operating systems that will operationalize the new department. This project component will undertake the tasks required for the said operationalization and will specifically cover the following:

• Detailed design of the internal structural and functional configuration of the new department.
• Design of the vertical compartmentalization of functions and workflows within the context of decentralized operations. Regional offices will be strengthened particularly with functions and core institutional capacities to assist cities in developing their own capacities to manage the urban development process.
• Identification, definition and design of the key mission critical operating systems (particularly the urban planning system) that will operate the improved functions, as well as the administrative and financial management systems that will support the operations of a decentralized department.
• Define the human competencies required, the staffing pattern, career path, and the remuneration structure that will enable the department to attract, hire, and retain people who are qualified and fit, and to provide them with a desirable and fulfilling career in the department.
• Identify and define the technologies required to support the overall department operations.
• Define the external linkages and design their operating mechanisms.
• Develop a change management program, including definition of training requirements, early retirement schemes, personnel deployment procedures, and communication program, among others.
• Estimate the financial requirements to operationalize the DHUD and build its capacities during a five-year migration and stabilization period and formulate the appropriate financing strategy therefor. ↑

B. Operationalization and Capacity Building of the HUDAC and Preparation of the HUDAC rules

Under the DHUD bill, the HLURB will be transformed from a regulatory body to an adjudication commission called Housing and Urban Development Adjudication Commission (HUDAC). Its decisions are appellable to the Court of Appeals. The rule formulation functions of the HLURB will be transferred to DHUD while its rule enforcement functions will be devolved. This radical change in the mandate and functions of the HLURB will require expansive reengineering of its systems and procedures and design of the rules of court. In particular the following will be undertaken:

• Formulation of the HUDAC rules of court
• Design of the fees and charges and the collection system
• Design of the case and caseload management system including records management
• Detailed design of the internal structural and functional configuration of the new department
• Identification, definition and design of the key mission critical operating systems that will operate the improved functions, as well as the administrative and financial management systems that will support the operations of a decentralized department.
• Define the human competencies required, the staffing pattern, career path, and the remuneration structure that will enable the department to attract, hire, and retain people who are qualified and fit, and to provide them with a desirable and fulfilling career in the department.
• Identify and define the technologies required to support the overall department operations.
• Define the linkages with the Judiciary and design their operating mechanisms.
• Develop a change management program, including definition of training requirements, early retirement schemes, personnel deployment procedures, and communication program, among others.
• Estimate the financial requirements to operationalize the DHUD during a five year migration and stabilization period

C. Formulation of a Coherent Urban Planning System (with Mechanisms for Linking Macro-Economic and Sectoral Planning with Urban Development Framework and Strategy Formulation)

Prior studies have shown that dysfunctions in the institutional framework and systems in urban governance have hampered the achievement of urban development goals, and that the reengineering of the institutional framework and systems will provide the pre-conditions upon which sound urban governance can happen within the context of devolution.

This component addresses one of the challenges of institutional reform: the establishment a coherent national urban planning system compatible with the new institutional framework that will synchronize at the national level, the efforts of all national government agencies, provide a framework and a set of applicable guidelines for the urban development planning of local government units, for the participation of other stakeholders, and establish a clear mechanism for monitoring and evaluating plan performance. ↑

D. Study on the Delineation and Synchronization of Urban Development/Governance Functions of HUDCC/DHUD, NEDA, DILG, and the sectoral departments, as well as other pertinent national government agencies.

This component involves an assessment and reengineering study of the national government agencies involved in urban development and urban governance. It will develop proposals particularly in the following areas:

• Defining the appropriate roles and functions of each department and agency and its relationship with the DHUD/HUDCC and with other relevant departments in urban development and urban governance.
• Establishment urban focal points in key oversight and sectoral departments (NEDA, DENR, DPWH, DOTC, DSWD, DOLE, DILG, DBM. DOF, DTI) to advocate for an strengthen linkages for urban sector reform.
• Mapping of funding sources for urban development (national budget, local government budgets, donors, NGOs and other sources, such as private sector/business). Mapping of national government funds for urban
• development will identify urban expenditures of national government for urban development in the annual expenditure program, and will include a mechanism for formulating a budgetary framework for urban development.
• Improving the overall institutional framework of the national government in urban development and urban governance, on removing unnecessary duplications, overlapping and redundancy of units, functions and programs, consolidating functions and programs to achieve strategic impact, and other relevant reform recommendations.
• Synchronize these efforts with the reengineering the bureaucracy program being undertaken by the Presidential Committee on Reengineering the Bureaucracy. ↑

Expected Outputs

1. Operationalized DHUD/strengthened HUDCC
   • Detailed formal structure and function statements
   • Design of key operating systems
   • Competency definitions, staffing
   • Migration strategy
   • Cost estimates
2. Operationalized HUDAC
   • HUDAC rules of court and procedures with the Judiciary
   • Detailed formal structure and function statements
   • Design of key operating systems
   • Competency definitions, staffing
   • Migration strategy
   • Cost estimates
3. Urban development planning system design report
4. Study and recommendation report on the delineation and synchronization of national government urban development/governance functions

Project Management Arrangements

The HUDCC is the executing agency for the project. The HUDCC will create an inter-agency steering committee, which will coordinate with the Presidential Committee on Reengineering the Bureaucracy ane which will be responsible for providing direction to the project. The HUDCC will utilize the PUF as the consultation and consensus building arm for the project.

Project Duration

Component 1: 8 months
Component 2: 8 months
Component 3: 5 months
Component 4: 3 months

Estimated Cost

US$ 800,000