Financing's Optimization Techniques for Ilam Municipality: MCDM And Linear Programming Approach

One of the main problems of municipalities in financing the projects and covering their costs is their too much dependency on property and excess density taxes that results in instability of financial and income resources and makes planning a difficult task. Therefore, an appropriate financing plan to reduce the reliance on these incomes and replacing them with continuous stable ones would be of crucial importance for the urban economy and local finance. So, this paper is designed to study the status of municipal revenues in Ilam and to present an appropriate financing plan using six criteria of fairness, transparency, efficiency, sustainability, adequacy, and being operational. The research is conducted using analytical-documentary method. After investigating the flow of municipal revenues in Ilam, and filling the questionnaires by experts of Ilam municipality, weighting coefficients of objective functions were obtained and then the study plan was examined using programming method under two scenarios. Results of the study suggest that over 40% of Ilam municipality incomes rely on resources from construction, and criteria of fairness and transparency in taxation are in top priority. Moreover, results suggest the importance of reviewing the tax rates especially duties on cars by the municipality.