1. General characteristic of Association.

• The creation of the Association was preceded by participation in the program " Small towns of Russia " (Institute "Open Society").

• According to the Charter the Association is a noncommercial organization and does not pursue as the basic purpose of activity earning profit.
• The basic sphere of activity of the Association is local self-management, local development.
• The range of economic activities of members of the Association is wide enough; it reflects a diversity of Russian modern conditions and regions, cultural and historical features of their development.
• The Association comprises different types of municipalities (town type prevailing), having various schemes of organization of local self-management.

1. The key idea of the Association

   The future of Russia is in development of minor homeland

2. Distinctive features of the Association.

• The crucial factor is that the Association has a strategy of development of its own, which defines the development according to the set purposes.

• A distinctive feature of the Association is that each participating municipality has its own strategy of development. In this respect the Association is undoubtedly marked as strategically orientated.

• the Association focuses on assistance in realization of development strategies of participating municipalities.

• Orientation to municipal economic development predetermines formation of network character of interaction of participants, with a necessary combination of horizontal and vertical ties.

• The association is distinguished by its active municipal attitude to political, economic and social and cultural processes taking place in the country. This attitude is shown in the interaction with governmental structures, managing subjects, with other associations of cities and other public associations.

3. The destination of the Association

The Association should become:

• an additional channel of access for municipalities to the state authorities of different type and level and the form of lobbying of their interests (by way of participating in the work of federal commissions, committees etc., promoting municipal initiatives and so forth);

• an additional channel of attraction of external resources (financial, material, information and advertising, organizational, humanitarian and so forth) for realization of strategies of participating municipalities;

• an informal coordination mechanism of adjustment and introduction of technologies of municipal management and techniques of correction of strategy of development of various municipalities;

• a "site" for exchange of experience in realization of strategy of development of municipalities, other initiatives and achievements in sphere of local self-management;

• the mechanism of providing on a corporate basis all necessary services in pressing questions of local self-management and municipal management, of municipal right etc.;

• a virtual informative and communicative network for inter-municipal interaction and external contacts.

In relation to municipalities:

• to become a representative and the defender of interests of members of the Association in the government, rendering them necessary legal support and so forth;
• to become a supplier of services for members of the Association (first of all for realization of strategic plans);
• to become a channel of attraction of resources for the members from the outer environment;
• to become a channel of establishing additional business ties with other municipalities which are not included in the Association, businessmen, associations, private persons, including foreign partners.

In relation to its own development:

• to become a self-developing structure basing its activity on principles of the project and program organization;
• to become a consulting and educational, methodical and innovative centre in the matters of organization of local self-management.

In relation to an environment:

• to become an authoritative structure in the sphere of municipal development and organization of local self-management as a whole;
• to become an innovational site for conducting experiments with reforms in local self-management of Russia.

In relation to municipalities:

• to create and promote the image of municipalities - members of the Association in the subjects of Federation and at a federal level;
• to reveal actual problems for municipalities in which the Association can organize necessary services on a corporate basis; to form the corporate order;
• to select consulting services from the range of those provided by different consulting organizations and to form a list of offers;
• to present interesting projects of municipalities (including investment projects), helping to attract external resources;
• to establish business relations of the Association.

In relation to its own development:

• to develop a coordination and strategic plan of action of the Association;
• to work out and introduce the rules of interaction of members of the Association;
• to develop initiative projects of Association on the basic directions of its activity;
• to develop the basic tools of realization of strategy of development of municipalities (in organization and management, financial and economic, information and exhibition sphere of activity and so forth);
• to organize methodical study of questions of realization of strategy of development; to publish the necessary manuals and to see to their introduction by the institutions of local self-management.

In relation to an environment:

• to study the features of reorganization of system of local self-management with reference to different types of municipalities, including members of the Association, and to come out with suggestions to federal government;
• to create conditions for the organization of pilot testing of reforms in the sphere of local self-management in municipalities - members of the Association.

The Representation direction - creating necessary external representation with the purpose of integrated attraction of various external resources; improving the image of members of the association; establishing contacts with the state authorities and with different sort of partners which implies:

• creation of contact site (including the "closed" club),
• exhibition activity,
• advertising and publishing activity

Financial and economic direction - developing and launching the investment cooperation mechanism; rendering services to members of the Association and the outer environment. The association is going to support and realise independantly various kinds of investment projects:

• business projects, necessary for development of towns;

• organizational projects;

• social projects (under grants, the regional budget etc.)

Information direction - development and realization of the appropriate information policy; development of information tools and realization of operative interaction on the basis of the integrated informative and communication system providing both access to the actual information, and realization of various types of sessions in a virtual mode.

According to priority problems of the life of municipalities there were formed the following programs of activity of the association:

• the Program in sphere of a municipal services (power supply (electricity, gas, central heating); water supply and the water drain; recycling of waste products);
• the Program of municipal management (sphere of authority and management, including the structure of administration, relations with the state authorities of different levels).
• the program of development of municipal tourism (through inter-associative committee on development)
• the Program of territorial development (architectural and town-planning sphere, including issues of land property).
• the program focused on support of youth initiatives of local community (sphere of a youth policy)

The structural and functional organization of activity of the association is formed on the basis of the purposes singled out and coordinated with the members of the Association, the key directions determining its basic functional structure and the organization of structural divisions in all directions in the process of consecutive expansion of activity and realization of organizational projects. The association sets up offices abroad and bases their activity according to the basic directions of activity of the current period. Development of strategy is starting step, providing the necessary initial organization of activity of the Association. Further the created information and image opportunities and the "summed" investment potential of participants, should provide an effective course of investment processes in towns. The Association in this respect also becomes a participant, not just the intermediary, so that the earned profit could be invested into joint projects, including those of non-commercial character (social, ecological and so forth).

For effective investment, information and exhibition activity the Association develops and maintains the appropriate rules of associative interaction.

The first task of the initial stage is adjustment of regular information interaction " Association ? its members" (in on-line and off-line modes) in each of the directions. In each municipality there should be an employee responsible for operative communication with Association.

In view of the essential dependence of Association activity on strategies of development of municipalities, its life cycle takes into account the terms of their realization. Basically, strategies are designed for 10-15 years and are divided, as a rule, into three stages.

Realization of the strategy of the Association will begin in 2003 (2002 - development of projects). At the initial stage (the first 2 years) the Association develops the coordinational strategic plan of the activity which takes into account basic and current priorities of its members, its own purposes and tasks, and also the current tendencies of the outer environment.

The development of the association as a highly effective innovative centre is done according to the following formula: "from membership dues as basic source of financing in the beginning of activity - to the organization and sale of services of association in the outer environment ". The income of the latter in some years should exceed payments several times.

At the initial stage the following quantitative criteria of expansion of the Association activity (with their subsequent updating if necessary) are planned:

Increasing the volume of services to municipalities - members of the Association up to:

2003 - 0,8 million roubles

2004 - 1,2 million roubles.

2005 - 1,6 million roubles

Increasing the volume of services to the outer environment to:

2003 - 50 thousand roubles

2004 - 250 thousand roubles

2005 - 500 thousand roubles

Increasing the number of members of the Association to:

2003 - 50 members

2004 - 80 members.

2005 - 120 members

Acquiring by 2005 the status of an International Association.

Assistance in attracting investments into municipalities ? members of the Association up to:

2003 - 0,1 mln $

2004 - 1,0 mln. $

2005 - 3,0 mln. $

Participating in Federal programs (international pilot projects):

2003 - 1

2004 - 3

2005 - 6