Revenue and Expenditure

Management Initiatives in
Nara Prefecture

Tomohiro Haruki
Finance Division,
Nara Prefecture Department of General
Affairs
September 2015

Table of Contents
1. Overview of Nara Prefecture
2. Overview of Japans Local Public Finance System
3. Characteristics of Revenues and Expenditures in
Nara Prefecture
4. Revenue Management Efforts
5. Expenditure Management Efforts
6. Effective Use of Assets
7. Efforts to Secure New Sources of Revenue
2

1. Overview of Nara
Prefecture

1-1 Location of Nara Prefecture

Nara
5,500km

Jakarta
5

1-2 Location of Nara Prefecture

Location of Nara Prefecture
Located in the center of the Kansai region
Located about one hour from Osaka International Airport
Located about one hour and ten minutes from Kansai International Airport

Kansai

Japan

Osaka International
Airport

Kansai

Kyoto

Osaka
Nara

Kansai International
Airport

Tokyo
6

1-3 Overview of Nara Prefecture

Data on Nara Prefecture
39 municipalities
Population: approximately 1.38 million people
(29th in Japan)
Area: approximately 3,690 km2 meters (40th in
Japan)
Topography: inland mountainous prefecture sur
rounded by mountains on four sides
Climate: continental climate in the north, mount
ainous climate in the south
World heritage sites: 3 sites (1st in Japan)
National Treasures: 213 sites (3rd in Japan)
Important Cultural Properties: 1,442 sites (3rd i
n Japan)
7

1-4 The Nation of Japan Began from Nara

1-5 The Nation of Japan Began from Nara

Nara was the center of Japan for about 600 years
BC1000 AD100

200 400 500

600

700

1400

1500

1600

1700

Emperor in Kyoto
1800

1900

2000
Modern

Meiji

Edo

AzuchiMomoyama
Warring
States

Muromachi
Nanbokucho

Kamakura

Emperor in Kyoto
Southern
Emperor in Kyoto Dynasty
in Nara

1000

Heian

Nara
Taiho Code

Asuka

Introduction of
Buddhism

Yamato Kingdom

Kofun

Yayoi

Jomon

Paleolithic

1300

900

794
relocation
of the
capital

Emperor in Nara
1200

800

1867
relocation
of the
capital

Emperor in
Tokyo

1-6 Japan's First International Capital Heijokyo

Birth of Heijokyo in 710

10

1-7 Nara Prefecture's World Heritage Site

(1)
Buddhist buildings in the
Horyu-ji area

(2)
Historic Monuments of
Ancient Nara

(3)
Sacred Sites and Pilgrimage
Routes in the Kii Mountain Range

(4)
Asuka-Fujiwara
Archaeological Sites of
Japan's Ancient Capitals and
Related Properties

11

1-8 East Asia Local and Regional Government

Congress
of the East Asia Local and Regional Government Congress
Characteristics
It started at the invitation of Nara Prefecture as the first multi-national congress that brings together local and regional
governments in East Asia.
It serves as an opportunity for local and regional governments in East Asia to report and share administrative issues
they face and discuss solutions. We aim to improve the administrative capabilities of each local and regional
government and deepen mutual understanding and friendship by holding this congress in an ongoing manner.

Peoples Republic of China (14)

Members
66 governments from 7 countries

Jiangsu
Province

Gansu
Province

Weifang

Anhui
Province

Xian

Linyi

Shandong
Province

Luoyang

Dongying

Henan
Province

Yangzhou

Dunhuang

Shaanxi
Province

Huangshan

Republic of Korea (8)

Gyeonggi-do

Buyeo County

Chungcheong
nam-do

Jeollanam-do

Gongju

Gyeongsangb
uk-do

Seosan

Gyeongju

Japan (32)

South Korea
China
Japan

Republic of Indonesia (2)

West Java Province

Special Region of
Yogyakarta

Malaysia (1)
Melaka State

Vietnam

Republic of the Philippines (3)

Aurora State

Philippines

Baler

Dinalungan

Malaysia

Socialist Republic of Vietnam(6)

Phu Tho Province

Viet Tri City

Tha ThinHu Province

Hu

Quang Nam Province

Hoi An

Indonesia

12

Aomori
Prefecture

Tokushima
Prefecture

Yamagata
Prefecture

Kagawa
Prefecture

Fukushima
Prefecture

Kochi
Prefecture

Niigata
Prefecture

Kumamoto
Prefecture

Toyama
Prefecture

Nara
Prefecture

Ishikawa
Prefecture

Tagajo

Fukui
Prefecture

Niigata

Yamanashi
Prefecture

Dazaifu

Nagano
Prefecture

Nara

Gifu
Prefecture

Tenri

Shizuoka
Prefecture

Kashihara

Kyoto
Prefecture

Gose

Mie
Prefecture

Ikaruga

Wakayama
Prefecture

Asuka

Tottori
Prefecture

Koryo

1-9 East Asia Local and Regional Government

Congress
Name

Participating local
and regional
governments

Discussion themes

2009 Meeting of Advocates

19 governments
from 3 countries

Promotion of exchange between Japan, China, and South Korea

2010 1st Congress

34 governments
from 6 countries

Conservation of cultural heritage and tourism promotion, international youth exchange for the next
generation

2011 2nd Congress

45 governments
from 6 countries

Crisis management, regional development

2012 3rd Congress

47 governments
from 6 countries

Social security in terms of aging population and decreasing birth rate, securing tax revenues,
regional development, and human resource development

2014 4th Congress

41 governments
from 6 countries

Social security in terms of aging population and decreasing birth rate, social security, and regional
economic development and employment

2014 5th Congress

41 governments
from 7 countries

Regional economic development, community development, and tourism promotion

The 5th East Asia Local and Regional Government Congress (October 27 to 28, 2014)

13

2. Overview of Japan's
Local Public Finance
System
14

2-1 Role of Local Public Finances

15

2-2 Role of Local Public Finances

Division of roles between the nation and local communities (FY2013 account settlement)
[Final annual expenditure-based]
Defense
expenses Land conservation and
development expenses
Agency costs

Industrial
economy
expenses

Education
expenses

Debt services

Social security-related
expenses

Onkyu pensions
expenses

Total

Others

JPY 165.8 trillion

Defense
Onkyu pensions
expenses

JPY 69.1 trillion

Sanitation
expenses

Commercial
& industrial
expenses

Local

Debt services

Housing
expenses, etc.

Agriculture, forestry, &

fishery industry
expenses

Disaster recovery
expenses, etc.

Public welfare expenses (excluding pension

expenses)

Social education
expenses, etc.

School education
expenses

Land development
expenses

Land conservation
expenses

Judicial, police, and fire service

expenses

General administration
expenses, etc.

Pension-related public welfare expenses

National
government
(Central)

JPY 96.6 trillion

Note: The numbers in the parentheses indicate the ratio accounted for by the national
government and local governments for each purpose.
As these figures are currently under closer examination, they are subject to change.
Source: Local public finance related materials from the
Ministry of Internal Affairs and Communications

16

2-3 Distribution of National and Local Sources of

Revenue

In Japan's public finances, the national-to-local ratio of tax revenue

from Japanese citizens is the inverse of the national-to-local ratio for
final expenditures, and there is significant divergence between the
two.

(FY2013 account settlement)

Taxation on citizens
(total tax revenue = JPY 85.9 trillion)
National tax
(approximately JPY 51.2
trillion) 59.6%

National expenditures

(net total-basis)
Local allocation tax, etc.

JPY 69.1 trillion

41.7%

National treasury
disbursements

National-to-local

Local tax
(approximately JPY 34.7
trillion) 40.4%

60 : 40

Local expenditures (net total-basis)

42 : 58

JPY 96.6 trillion

58.3%

Returns through services to citizens

Total national and local expenditures (net total)
= JPY 165.8 trillion

17

2-4 Overview of the Local Allocation Tax System

The local allocation tax system is a system that levels inequities in financial
resources between local public entities and ensures that there are sources of
revenue for local public entities so that a standard level of administrative
services can be provided to citizens no matter where they live in the nation.
From the perspective of local self governance, expenditures by local public
entities should be covered by that entity's tax revenues.
However, there is much variance in tax revenues depending on the region, and
many local public entities are not able to secure the sources of funds required
through tax revenues alone.

For this reason, under this system sources of funds that should be gained as tax
revenues by one region are collected by the national government for that region and
redistributed to local public entities.
18

3. Characteristics of Revenues
and Expenditures in Nara
Prefecture

19

3-1 Overview of the Budget for Nara

Prefecture

State of revenues (beginning of FY2015 + February 2014 correction (initial proposal))

Others

Unit: JPY 100 million

(Composition ratio %)

Various revenues

Prefecture bonds
657 (13.7)

Prefectural tax
1104 (23.0)

Money transferred

Revenue
National treasury
disbursements
596 (12.5)

JPY 479.3
billion

Local consumption
tax settlement money
390 (8.2)

Local transfer tax

Local allocation tax
1472 (30.7)
Use charges and fees

Local special grants

20

3-2 Breakdown of Revenue by Prefecture

Approximately 40% of Nara Prefecture's budget is dependent on local allocation tax
The allocation tax dependency rate is the 8th highest in Japan

Others

Local allocation tax (including bonds for the

extraordinary financial measures)

Kochi
Prefecture

Tottori
Prefecture

Kagoshima
Prefecture
Shimane
Prefecture
Okinawa
Prefecture
Saga
Prefecture
Nagasaki
Prefecture
Nara
Prefecture
Miyazaki
Prefecture
Yamagata
Prefecture
Tokushima
Prefecture

Aomori
Prefecture

Oita
Prefecture
Akita
Prefecture
Wakayama
Prefecture
Kumamoto
Prefecture
Kagawa
Prefecture

Ehime
Prefecture

Hokkaido
Prefecture

Fukui
Prefecture
Nagano
Prefecture
Yamanashi
Prefecture
Niigata
Prefecture
Okayama
Prefecture
Shiga
Prefecture

Yamaguchi
Prefecture

Iwate
Prefecture

Gifu
Prefecture
Hiroshima
Prefecture
Toyama
Prefecture
Ishikawa
Prefecture
Mie
Prefecture
Ibaraki
Prefecture

Tochigi
Prefecture

Kyoto
Prefecture

Miyagi
Prefecture
Fukuoka
Prefecture
Gunma
Prefecture
Shizuoka
Prefecture
Saitama
Prefecture
Hyogo
Prefecture
Chiba
Prefecture
Osaka
Prefecture
Fukushima
Prefecture
Kanagawa
Prefecture

Tokyo

Aichi
Prefecture

Total

Source: FY2011 Survey on State of Local Public Finances (Ministry of Internal Affairs and Communications)

21

3-3 Status of Expenditures (by Purpose)

(Beginning of FY2015 + February 2014 correction (initial proposal))
Disaster recovery expenses
Promotion of creative living expenses

Employment
policy expenses

Unit: JPY 100 million

(Composition ratio %)
[General finances]

Others

Industrial promotion expenses

General affairs expenses
Medical policy expenses
[85]
Agriculture, forestry, &
fisheries expenses

Education expenses
1139(23.8)

Regional revitalization
expenses
Prefectural
police expenses
283 (5.9)

Various
disbursements
363 (7.6)

Prefecture land management

expenses

Expenditures
JPY 479.3
billion
Debt services
807 (16.8)

Health and
welfare expenses
757 (15.8)
[668]

22

3-4 Status of Expenditures (by Nature)

(Beginning of FY2015 + February 2014 correction (initial proposal))
Materials and
other expenses

Reserve

Unit: JPY 100 million

(Composition ratio %)
[General finances]

Money drawn

Subsidies, etc.

Expenditures

Personnel
expenses
1510(31.5)
[1291]

JPY 479.3
billionbillion]
[JPY 360.7

Investment expenses

Development of social
capital and facilities for
roads, rivers, etc.

Obligatory
expenses

Debt services
Assistance
expenses

23

3- 5 Status of Social Security Expenses

Coverage ratio for main social security systems
Item

National
Prefectural Municipal
government government government

Other sources of revenue

The coverage by the local government is 25%,

which is covered by the city, towns and villages
with welfare offices, and the prefecture (portion for
towns and villages without welfare offices)

Public
assistance
National health
insurance related
expenses

Remarks

Insurance premiums, etc. 50%

(Some coverage by prefectures and
municipalities through the Insurance
Financial Base Stabilizing Scheme,
etc.)

Coverage of child allowances

For the children (less than age three) of

employees, 35.6% coverage by the national
government, 8.9% by prefectures and
municipalities, and 46.6% by business owners

Benefits for persons

with disabilities

10% covered by the individual

For the percentage covered by the individual

under other sources of revenue, there are
mitigation measures depending on income

Old elderly healthcare system

related expenses

Support funds, insurance premiums, etc.

52%
(Some coverage by prefectures and
municipalities through Insurance Financial
Base Stabilizing Scheme, etc.)

Coverage of nursing
care benefits

Insurance premiums, etc. 50%

In the case of institutional benefits, 20% from

national government and 17% from prefecture

24

Major Expenses Including Social Security Related Expenses in the Nation's

General Account Expenditure
1985(S60)
FY

1995(H7)
FY

2005(H17)
FY

2015(H27)
FY

Social
security

Educatio
Defe n,
Public works nse science,
and
technolo
gy
4.8

Social security

Public works

(Unit: JPY trillion)

Others

Education,
Defense science,
and
technology
6.1

Public works

Social security

Social security

Allocation tax, etc.

Others

Education
, science,
Defense and
technolog
y
5.7

Public
works

Government
debt servicing
costs

Allocation tax, etc.

Others

Educatio
n,
Defense science,
and
technolog
y
5.4

Government debt
servicing costs

Allocation tax, etc.

Others

Government debt servicing costs

Government debt servicing costs

Allocation tax, etc.

PB expenses of JPY 72.9 trillion

Note: The figures are based on the initial budget for each fiscal year.

25

Source: Materials from the Ministry of Finance, Public Finances Subcommittee (held April 27, 2015)

Major Social Security-Related Expenses

(Unit: JPY
million)

The nature of public assistance expenses is assistance

expenses, and the nature of others is subsidies, etc.

Public assistance costs

National health insurance related
expenses
Coverage of child allowances
Benefits for persons with disabilities
Old elderly healthcare system related
expenses
Coverage of nursing care benefits

2006
H18

2007
H19

2008
H20

2009
H21

H22
2010

H23
2011

H24
2012

2013
H25

*Settled amount for FY2013 and initial budget amount FY2014 and FY2015

26

2014
H26

H27
2015

3-6 Overview of the Nara Prefecture Administrative Management

Program
Basic policy
Plan period
In

order to achieve the policy of creating a Nara that aims

for regional self-reliance and is a comfortable place to live,
we will take advantage of all kinds of management
resources and fully deploy our stance towards management.

April 2014 to March 2017 (three years)

Full deployment of the management program

Facility management

Area management
1.

Direction

municipalities (horizontal complementation)

(2) Assistance to small municipalities (vertical
complementation)
(3) Transfer of authority from prefectures to municipalities

2.

Collaboration and coordination with various

parties in the region

(1) Optimization of total retained

amount
(2) Effective use of prefectural assets
(3) Promotion of longer life
Basic policy

Collaboration and coordination with

municipalities
(1) Improvements in efficiency through collaboration between

Asset management

Human resources and organizational management

1.

Securing and developing human resources

2.

Organizational development

Administrative management with a culture of

publication and dialog

Improvements to operations, work-life balance

Public finances management

1.

Securing revenues

2.

Review of expenditures

Internal control

27

4. Revenue Management Efforts

28

4-1 Characteristics of the Tax Revenue Structure of Nara Prefecture

Individual prefectural tax, automobile taxes, and corporate business tax account for a large proportion of
the breakdown of prefectural tax revenue (JPY 110.4 billion) for the prefecture budget for FY2015.
Tobacco tax, 1,262, 1.1%
Automobile acquisition tax, 1,298,

Real estate acquisition tax, 2,046,

Golf course use tax, 903,

Industrial waste tax , 144

Other taxes, 25,0.0%

Diesel oil delivery tax, 6,006,

Local consumption tax, 10,731

Individual prefectural tax, 47,224,

Automobile tax, 15,150,

Corporate business tax, 13,693,

Corporate prefectural tax, 3,052,

Individual business tax, 1,187,

Prefectural share of taxes on income from the transfer of stocks

Prefectural share of taxes on

bank deposit interest, 875,

Prefectural share of taxes on dividends, 4,611,

Unit: JPY million

29

4-2 Prefectural Tax Collection Status

Changes in the collection rate
Prefectural tax excluding individual
prefectural tax

Prefectural tax
overall

Individual prefectural tax

FY

30

4-3 Diversification of Receipt Methods and Receipt at Convenient Stores

Nara Prefecture
1. Tax notice and payment notice
The payment number (12 digits) and confirmation number
(4 digits) are stored in the bar code

Taxpayer
Tax administration
integration system

3. Payment reconciliation
processing based on
the confirmed report
data

2. Payment at convenience stores

Convenience stores
3. Scan bar code, conduct payment procedures
Transfer payment Invoice and receipt stored by
the store

Many stores
operate 24
hours
a day

4. POS information
Receipt notice
Payments collected

8. Sending of receipt results data

Preliminary report: day following the receipt
date
Confirmed report: four to five business days
following the closing date (every five days from
the beginning of the month)

Collection agencies

Convenience store
headquarters
5. Preparation of receipt results data
Receipt notices stored by
headquarters

11. Notification of receipt

6. Receipt results data

Payments collected

7. Consolidation of receipt results

data

11. Payments collected

Day following and two days
following the date the confirmed
report is sent

Designated financial
institution
Nanto Bank, Ltd.

31

4-4 Spread of Convenience Store Payments

The by-deadline payment rate was 86.4%, a 1.2 point improvement from the previous year
Among the payment methods, the ratio is growing for payment at convenient stores
By-deadline
payment rate
Commencement of
convenience store payments

Commencement of credit
card and MPN payments

Use ratio

Counters at
banks, etc.
Account
transfer
Convenience
stores
MPN
Credits

32

4-5 Payments Through Multi-Payment Networks

Taxpayer

Nara Prefecture

Tax administration system

Tax notice and
payment notice

3. Acquisition of tax notice and

payment notice

1. Preparation of tax notice and

payment notice

Joint use center

MPN communication
servers

4. Payment using MPN

4-1
Payment using networks
Internet banking
Mobile banking
ATM (limited to MPN
supporting equipment)

2. Payment information
registration

Payment
information

2. Payment information
registration processing

6. Reconciliation
processing

Reconciliation
information

7. Reconciliation processing

Reconciliation
information

Financial institutions
4-2
Payment at the counters of
financial institutions using
bulk transmission systems
(Japan Post Bank, etc.)

5. Payment
processing

MPN

Payment
from home
via the
Internet
33

4-6 Credit Card Payment

1. Payment notice
Notification of necessary information for credit settlement
Payment number (12 digits) and confirmation number (4 digits)

Taxpayer

8. Sending certificate of tax payment

Tax integration system

2. Sending payment request data

Payment number, confirmation number, and amount
3. Entering and sending the required information
Payment number, confirmation number, credit card
number, etc.

5. Payment reconciliation
processing based on the
confirmed report data

7. Notification of receipt
4. Sending of receipt results data
Preliminary report: the day following 3
Confirmed report: the day following
the closing date

Designated proxy payers

Proxy payers

Designated financial institution

Nanto Bank, Ltd.

6. Payments of payments collected

Closing date
15th of every month
Last day of every month

payment date
first business day of the following month
business day following the 15th

* Fund settlement is conducted separately between the taxpayer and Yahoo Japan Co,. Ltd. (or the credit
card company in cases of cards issued other than the company).
However, whether funds are settled or not will not have an effect on payment to the prefecture.

34

4-7 Delinquency Arrangement Efforts

Individual prefectural tax accounts for the highest percentage of Nara
Prefecture's tax revenue structure, and individual prefectural tax
collection measures are an urgent issue from the perspective of
securing tax revenues.
Because matters such as the taxpayer and the income amount that
serves as the basis for the tax calculation amount are shared for
individual prefectural tax, the administration of taxation and collection
for individual prefectural tax are conducted together by municipalities.
Initiatives to improve the total collection rate for the prefecture and
municipalities are required.

35

4-8 Details of Delinquency Arrangement Efforts

36

4-9 Measures for Non-Tax Receivables

As the financial environment becomes more and more difficult, measures for
non-tax receivables is an urgent issue from the perspective of securing
revenues and the fairness of coverage.

Initiatives to prevent the occurrence of new receivables and reduce the

amount of receivables that have already been incurred
Strengthen measures to collect receivables
Training and individual consultations by lawyers and other professionals
Contracting administration to private sector debt collection agencies
Developing an environment that facilitates payment

37

4 - 10 Overview of Municipal Bonds

What are municipal bonds?
Municipal bonds are a form of debt incurred as a result of externally
procuring funds required for public finances by a local public entity for
which the debt is performed over a period that exceeds one fiscal year

Functions of municipal bonds

1. Fiscal year adjustments between public expenditures and public
revenues
2. Adjustments for fairness between generations for the burden of residents
3. Complementation of general finances
4. Adjustments for national economic policies

Fund classifications
Public funds (fiscal loan funds, Japan Finance Organization for
Municipalities funds)
Private sector funds (funds raised in the market, funds underwritten by
38
banks)

4-11 Diversification of Lenders

In municipal bonds planning, increase the ratio of private sector funds in an effort
to focus and reduce public sector funds

Introduce market-funded bonds from the perspective of diversifying means of

funding and securing stable funding
Issuance amount by type of funds
FY 2009

FY 2010

(Unit: JPY million)

FY 2011

FY 2012

FY 2013

FY 2014

Public sector funds

Private sector funds
Breakdo
wn of
private
sector
funds

Borrowing from banks, etc.

Bonds
Individual
released bonds
in the
Jointly-issued
market
bonds
Total

Future efforts
Consider revising the issuance amount for bonds released in the market
39
from the perspective of funding costs

4-12 Controlling the Future Interest

Rate
Burden
Diversification
of the maturity of borrowings
6

Interest rates on Japanese

government bonds (JGBs)

(%)

20 JGB
20-year

10-year JGB
10
5-year
JGB

0
5

9959
1
9
1

96
969
91

7
979
9
1
9

8
9
9998
999
9
9
1
1
1
1

0
1

0000 200010
2
0
2
2

02

02
020

03

3
000
22

04

4
200
20

05

5
200
20

06

06
020

07

7
200
20

08

8
200
20

9
0
009
2
0
2

10

100
202

11

1
210
20

2
121
0
0
22

13
103
2
0
2

4
041

21
20

15
150
2
0
2

Prepared based on data

fromHP
the
Ministry of Finance

website

For Nara Prefecture, borrowings mainly consist of 10year bonds

Introduce 5-year bonds to control the interest rate
40
burden

5. Expenditure Management
Efforts

41

5-1 Implementation of Major Projects

Nara Prefecture promotes efforts aimed at revitalizing the economy and
improving the quality of living in order to create a Nara that is self-reliant as a
region and is a comfortable place to live.
Nara Prefecture is implementing various projects in order to achieve this goal.
For the main projects, total project costs and projects costs (expected) for each
fiscal year are assessed.
To Nara Park
Indoor event square (theater and
cinema facility)
Video attraction

To Nara Palace
Site Historical
Park

Convention
center
Kitchen
International brand
hotel

Beverage
and goods

Underground bus
terminal

Spa
facilities

Multipurpose
square

Underground
parking lot

To JR Nara
Station

Parking lot
(south
building)

To Osaka

Training center

Project for the effective use

of prefecture-owned land

42

5-1 Implementation of Major Projects

In order to implement major projects:

1. Consider sources of funds for projects
Review existing projects in order to secure funds
for main projects
Utilization of national treasury disbursements and
private sector funds
Utilization of prefecture bonds with allocation tax
measures
2. Contributing reserves to a fund
Contribute reserves to a fund through measures
such as reducing expenses at the execution phase
43

5-2 Reserves to the Prefecture Bond

Administration Fund

Supporting future debt service

costs
Deposit surplus funds, etc. into a fund in order to prepare
for future debt service costs.
Balance of prefecture bond management fund

100 million
yen

500

400

378

434

444

41640
2014

42005
2015

392
353

333
305

300

285

302

307

39814
2009

40179
2010

350

200

100

0
38353
2005

38718
2006

39083
2007

39448
2008

40544
2011

40909
2012

41275
2013

44

5-3 Efforts Under the Nara Model

2010 2040
Total population change rate by
municipality

1. Current state of municipalities in Nara

Prefecture
Status of mergers of municipalities
(negative figures in parenthesis)

(Japan Policy Council)

Number of
municipaliti
es
(April 1999)

Northwes
t

Decrease

East
Nationwi
de

Central

3,229

Number
of
municipali
ties
(April
2014)

(1,511)
(46.8%)

Nara
Prefectur
e are
There

(8)
47
(17.0%)
There are many small municipalities in Nara
Prefecture

1,718
39

There have not been many mergers of municipalities in

Nara Prefecture

Becoming a society with a declining

population

South

Over +1.0%
(1 municipality)
(2
0.0% to up to negative
15.0%
(8
Negative 15.0% to up to negative municipalities)
30.0%
(11
Negative 30.0% to up to negative municipalities)
45.0%
(11
Negative 45.0% to up to negative municipalities)
municipalities)
60.0%
(6
Over a negative 60.0%
municipalities)

The population is decreasing and aging in the

southern and eastern areas of Nara Prefecture
The population is expected to get older and
decrease in the northwestern areas and central
areas of the prefecture in the future
By 2040, the population will decrease for all
municipalities excluding one

45

2. Role of the Prefecture in a Society With a Declining

Population

The Nara Model Concept

Local efforts are needed in an aim to check
population decline and maintain and improve
local vitality
In order for small municipalities to continue
providing high quality administrative services,
measures to improve administrative efficiency
other than mergers of municipalities are
required.
Based on the concept of effectively using the resources
of the prefecture and municipalities (human resources,
financial resources, public facilities, etc.) as a
prefecture overall, actively promote collaboration and
coordination between municipalities

National
government

Prefectu
re

Actively moving "middle

fielder"

Municipalities

Municipalities

Have municipalities assist one of

the most important roles of the prefecture
Using soccer as an example, this can be
referred to as serving as a "middle fielder"

46

Municipalities

Municipalities

3. Various Patterns of Efforts Under the Nara

Model

Nara Prefecture and Mayors' Summit has been

held several times per year since FY2009, in
which the prefectural governor and mayors of
municipalities conduct workshops and share
issues.
Nara Prefecture and Mayors'
Summit

Efforts under the Nara Model

1. Implementation of projects through cooperation by the prefecture and municipalities

Broad

Prefecture
Prefecture

Municipalities
Municipalities
Municipalities
Municipalities
Municipalities
Municipalities

healthcare provision
system in the southern area of
the prefecture
Community building, etc.
through the signing of
agreements between the
prefecture and 47
municipalities

2. The prefecture provides financial and technical assistance

for initiatives implemented through coordination and
(Coordination and cooperation
between municipalities
municipalities)
cooperation between
Adoption of wide-area service
Cities
Cities
Prefecture
Prefecture

Towns
Towns

Villages
Villages

for fire fighting

Adoption of wide-area service
for garbage disposal

3. Administrative work for municipalities is entrusted to the

prefecture and conducted by the prefecture on the behalf of
Prefecture conducts
municipalities Work entrusted
maintenance and repair of roads
Municipalities
Municipalities

and bridges on the behalf of

Prefecture
Prefecture
Municipalities
Municipalities

municipalities
Municipalities

Administrative work the

Municipalities

behalf of municipalities

4. Effective use of the total assets such as facilities

respectively held by the prefecture and municipalities
Coordinatio

(Facility management)
n
Prefecture
Prefecture

Assets held
by the
prefecture

Municipalities
Municipalities

Municipalities
Municipalities

Assets held by
municipalities
Municipalities
Municipalities

Efficient use within the

prefecture

Municipalities
Municipalities

Utilize the waterworks assets of the

prefecture and municipalities by the
prefecture as a whole

48

Case 1. Broad Healthcare Provision System in the Southern Area of

the Prefecture
Motive for the
idea

Details of
coordination

Up until now, three public hospitals in the southern area

of the prefecture were operated as hospitals with the
same kind of function

Shift from three public hospitals

to one broad-area healthcare
centers

cycle
Decline in
the
healthcare
function

Nanwa Regional Medical Association,

Minami Nara Prefecture General Medical Center
Scheduled to be
opened in July 2016

Decrease
in
number
of
Vicious
patients
Decrease in
the number
of doctors

Emergency
medical
service

Minami Nara
Prefecture General
Medical Center

Newly
established
(July 2016)
Modification (July
2016)

Ways of coordination

Yoshino Hospital

A partial affairs association participated in by 12 municipalities

and the prefecture will construct, modify, and operate three
hospitals.
Prefecture covers a portion of the municipality's bond issuance
redemption amount
Doctors dispatched by the prefecture's medical universities

Recuperation

Divisio
n of
roles
and
respon
sibilitie
s

Nanwa
Regional
Medical
49
Association

Recuperation

Gojo
Hospital
Modification
(June 2017)

Case 2. Adoption of Wide-Area Service for Fire Fighting

Motive for the
idea
Increase
in the number of emergency transport cases due to the aging

Nara Prefecture Regional Fire

Association Fire Department

population
Concerns over large-scale disasters such as large-scale earthquakes,
floods, etc.
Former Seiwa

Fire Department
Kashiba and
Maintenance and renewal is difficult for aging fire-fighting facilities and Former
Koryo Fire
Association Fire
Department
equipment
Former Katsuragi
City Fire
Fire-fighting and emergency
rescue technologies
becoming
more
Department
Former Chuwa
Launching
of
a
regional
fire
association
Detailsand
of diversified
Regional Fire
advanced
Association Fire

coordination

participated in by 37 municipalities

Role played by the prefecture to achieving wide-area service

Establishment of plans for promoting wide-area service adoption and
wide-area fire fighting management

Former
Yamatokoriyama City
Fire Department

Former Yamabe Regional

Administrative Affairs
Association Fire
Department
Former Uda Regional
Fire Association Fire
Department

Former Sakurai
City Fire
Department

Department

Former Nakayoshino
Regional Fire Association
Fire Department

Former Gojo City

Fire Department

Former Yoshino Regional

Administrative Affairs
Association Fire
Department

Emergency
provisions

Dispatch of personnel to Nara Prefecture Regional Fire Association,

adoption of digital technologies for fire and emergency radios, and
development of advanced command centers

Overview of Nara Prefecture Regional Fire Association

11 fire departments

Nara Prefecture Regional Fire

Association
1 fire department (37
municipalities)

The new Nara Prefecture

Regional Fire Association

Headquarters:
Kashihara City
Number of fire stations: 18
Number of employees:
1,280
Number of vehicles owned:
166
Number of participating municipalities:
37
Population serviced:
approximatel
y 900,000
Area serviced:
3,361
km2

50

Case 3. Prefecture Waterworks Facility Management

Motive for the

As we enter an era of shrinking demand, it is necessary to optimize water resources held by

idea
each water supply operator and make innovations for facilities renewal that will increase going
forward.
Details of

Use the waterworks resources (facilities, water resources, human resources,

coordination
technical capabilities) managed by the prefecture and optimize total waterworks
assets in the prefecture
Prefecture-managed
Prefecture
waterworks
area

Gojo and
Yoshino area
Simplified
waterworks
area

waterworks used to supply

service water to a wide area for
municipalities that lack their
own supply of water
Waterworks managed through
only the municipalitys own
supply of water
Scattering of small water
supply facilities (depopulated
area)

Prefecture waterworks area:

Ways
of
use of
prefecture
waterworks water sources and
coordination
facilities
Prefecture waterworks Image of prefecture water conversion
through directly-connected water
water purification

supply
Municipal
plant
waterworks facility
Gojo and Yoshino area:
Water
pipe
prefecture supports coordination between
Each
househol
Directlymunicipality waterworks
d
connected
water supply

using vertical
Simplified waterworks area:
intervals
Decompres
sion
use of prefecture waterworks human resources
51facilities
and technical capabilities
Water
purificatio
n plant

Distributi
ng
reservoir

Pump
facilities

6. Effective Use of Assets

52

6-1 Fund Bond Investments

Efforts to increase fund management revenues
Trend of declining interest rates in Japan
The average interest rate on deposits (one-year) with
financial institutions in Japan for FY2014 was 0.35%
Bond investment results

53

6-2 Status of Facility Management Efforts

urrent situation and challenges related to assets owned by the prefecture

(1) Massive growth in aging
buildings

(No. of
buildings)

200

Buildings for which 30 years or more

has passed since the completion of
construction now account for
approximately 50% of about 790
facilities (buildings and their grounds,
as of July 2013), meaning that it will
be difficult for status quo to
maintained for buildings owned by the
prefecture.

Prefecture-owned building
stock
Buildings for which 30
(all facilities) years or more has passed

150
100
50
0

since the completion of

construction now account
for approximately 50% of
overall stock

(FY of
construction)

(2) Changing needs

Increase in facilities with
low usage accompanying
changes in the needs of
users.
Social needs including
consideration to the
environment through
energy-saving measures.

(3) Decline in the

safety of facilities
There are concerns
over a decline in safety
as detailed
development becomes
difficult as a result of a
drastic increase in
demand for facilities
overall.

The necessity of facility management

It is necessary to introduce the technique of facilities management for assets owned by the prefecture
in an aim to achieve even more effective use of assets owned by the prefecture from the perspective of
long-term and prefecture-wide management.

Establishment of the Basic Facility Management

Promotion Policy (January 2013)

54

6-2 Status of Facility Management Efforts

Measures for promoting facility management

Conduct an assessment of assets for the purpose of facility selection and
investment concentration
Review of quality and quantity in consideration of the three pillars of facilities
management.
Current asset stock

Three effects aimed for

Current asset stock

(1) Improve user

satisfaction

Assessment of
assets (visualization)

Selection of assets and

investment concentration

Don't use
Transfer, sales, etc.

Three pillars for

facility management

1. Optimization of
total retained
amount
Reduction and
optimization of
the total volume
of assets

Use
Consolidation, diversion, etc.

Centralization of functional
improvements and
conservation

Review of
quality and
quantity

[Primary
[Secondary assessment]
[Tertiary assessment]
assessment]
Qualitative assessment Comprehensive assessment of
Relative assessment
establishment background,
(Numerical
individual plans, maintenance
assessment)
costs, etc.

(2) Contribute to the

improved soundness of
public finances

2. Effective use of
3. Promotion of longer
prefectural assets
life
Maximizing the
reuse value of
assets

Reduction and
leveling of lifecycle
costs
Conversion from
corrective to
preventive
maintenance

(3) Contribute to
community building
and the environment

55

Example of Efforts 1: Private Sector Use (Nara Prefecture Youtokugakusha

Development Project)
Nara Prefecture Youtokugakusha (Student Dormitory) (location: Bunkyo Ward, Tokyo)
Remodeling costs generated through a fixed-term land leasehold agreement and a student dormitory purchase
agreement.
Business methods
1. General fixed-term land leasehold agreement (50 years) signed for a portion of the grounds.
2. A private sector business will construct a student dormitory and a private sector for-profit facility (on the land
covered by the fixed-term land leasehold agreement).
3. The prefecture will buy the student dormitory (offsetting with the concession money (a portion of the fixed-term
land leasehold fee)).
4. The prefecture (Nara Prefectural Scholarship Foundation) will operate the student dormitory.
5. The private sector business will operate the private sector for-profit facility.
6. The fixed-term land leasehold fee (rent) excluding the concession money will be paid to the prefecture over a
period of 50 years.
The private sector business to fulfill the role above will be recruited and selected through an open-proposal
land leasehold agreement and student
method. Fixed-term
dormitory purchase agreement
Private sector for-profit facility

Purchase of the
student dormitory

Business

Nara Prefecture

Nara Prefectural
Scholarship Foundation

Loan of the
student
dormitory

Concession
money

Rent for 50
years
Rent

Manag
ement

Dormitory
fees

Operation

Student dormitory
(50 rooms)

Private sector
facilities
Fixed-term leased land

Land = owned by the prefecture

Youtokugakusha (student dormitory)

56

Student dormitory and private sector for-profit facility.

(operated from April 2010)

of Efforts 2: Sales of Prefecture Land

ama iStudio, Former Tsurumaki Kousha (Public Official Accomodation))

Daikanyama iStudio (address:

Shibuya Ward, Tokyo)

The function of Daikanyama iStudio that serves as the

information distribution center for the prefecture transferred to the

Nara Mahorobakan that has been opened as a private sector
facility, and the site where the building once stood was sold
through general competitive bidding.

Former Tsurumaki Kousha

(Public Official
Accommodation)
(address: Setagaya Ward, Tokyo)

As a result of a review of the public official accommodation for

Sold in November
2011

Nara Prefecture public workers that are working in Tokyo, the

building was demolished and the former site was sold through
general competitive bidding.

Sold at a high price due to favorable location in Tokyo (two properties

sold for approximately JPY 4.7 billion)
Proceeds from the sale have been kept as a reserve, to be used as
57
the source of funds for hospital development, etc.

mple of Efforts 3: Invitation of Private Sector Facilities to Unused Land

Site of the former Miminashi High School (Tokiwa Town, Kashihara City)
Sports ground area: Invitation of large private sector customerattracting facility (JA Nara Prefecture Mahoroba
Kitchen)
Land lease through a fixed-term land leasehold
agreement
School building area: Use in a central area relocation plan
Effect:
Contribution to local community building and
regional revitalization
Secure revenues for the prefecture through the land
lease
JA Nara Prefecture Mahoroba Kitchen

(Opened from April 2013)

58

mple of Efforts 4: Relocation of Prefecture-Owned Facilities (Central Are

Integration and consolidation of prefecture-owned

facilities
Central facility:
The former Miminashi High School (earthquake resistant structure) modified into the
Kashihara Comprehensive Government Office Building
Consolidated facilities:
Comprehensive government office buildings (two facilities with no
earthquake resistance)
Small government office buildings (agriculture and forestry promotion office,
civil engineering office, and a prefectural tax office)
*The former sites will be used for purposes such as community building
based on consultations with mayors of municipalities
Effect:
Reduction in building improvement costs for earthquake resistance and large-scale
building improvement costs
Revenue gained through sale of former sites that were consolidated
Costs:
Approximately JPY 1.6 billion for building improvement work

Kashihara Comprehensive
Government Office Building
(Operations started from January
2015)

59

7. Efforts to Secure New Sources of Revenu

60

7-1 Introduction of Advertising (Naming Rights) for

Public Facilities
Naming rights consist of the rights to give nicknames
using company names, brand names, etc. to public
facilities, and by selling these rights it is possible to
gain funds related to facility management, etc.

In Nara Prefecture, naming rights for some applicable

public facilities are sold, and the funds received are
utilized for sustainable facilities management, the
maintenance and improvement of facility service, and
improving the appeal of facilities.
61

7-1 Introduction of Advertising (Naming Rights) for

NamingFacilities
rights introduction
Public
example

Introduction of naming rights for sports facilities as a new means of securing

sources of revenue

The prefectural Kashihara Koen Baseball Stadium given the nickname "Sato
Yakuhin Stadium"
Naming rights fee for three years: JPY 15,000 thousand (2010 to 2012)
Naming rights fee for three years: JPY 24,000 thousand (2013 to 2015)

Utilization of naming rights

fees

Through the use of naming rights fees, the baseball field was improved so that
a safer and more comfortable facility could be used by the people using the facility.

62

7-2 Contribution-Based Crowdfunding

Nara Prefecture

Website on the
Internet

Individuals

PR on the appeal of
living in an old
traditional home

Donation
s
Donations

Individuals
Donations

Individuals
Individuals
Empath
y

Issuance of the Nara's

Festivals and
Performing Arts video
library

Crowdfunding
Service Provider
(Platform)

Payment

A website lists the

projects offered by
the prefecture

Record, digitize, store, and use videos of

the traditional festivals and performing
arts (intangible folk cultural properties)
of Nara Prefecture

Repairs and workshops on an

important cultural property named the
Iwamote House in Yamato Folklore Park

Collection and
arrangement of Asuka and
Fujiwara (ancient burial
mounds) historical images
Ishibutai ancient burial
mound

Donations

Provision of donation
certificates and rewards
Project progress emails and
report letters

Currentl
Excavation work in
1933Storage and use of photos yof
Asuka and Fujiwara (ancient
burial mounds) taken in the mid
50's and 60's after digitization

Science and Technology

Experience Festival

Holding of a Science and Technology

Experience Festival that features
experience and trial corners for
science and technology that is nearby
and introductory exhibits of industries
and companies in the prefecture

Operation of the
Hanarart Bus

Decorate the bus that runs between

the main venues with art during the
Art Festival Hanarart 2015

Projects are conducted using donations from individuals who empathize with the purposes of
projects after viewing the website of the crowdfunding service provider.
63
Build relationships with contributors through means such as project progress emails and report

Thank you for your attention.

64