More than 20 counties are establishing municipalities as they seek a share of Sh30 billion being doled out by the World Bank to improve infrastructure.
But establishment of municipalities by governors has raised concern over possible duplication of functions and an increase in the wage bill as they require additional staff.
Many counties are establishing municipalities that imitate the structures of the previous local governments headed by mayors.
Every county will receive at least Sh200 million under the grant, advanced through the Ministry of Infrastructure and Housing, to develop urban areas.
In the past two months, at least half of the 48 counties have sought applicants for the positions of municipal managers and members of the municipality board.
They include Nakuru, Nyeri, Isiolo, Embu, Vihiga, Laikipia, Narok and Meru. Others are Kwale, Mandera, Kisii, Kirinyaga and Kiambu counties.
There is no limit to the number of municipalities a county can establish as long as the urban area meets the threshold. Municipalities are used mostly to run towns and urban areas.
Laikipia Senator John Kinyua, who chairs the devolution committee, however, warned governors against classifying undeserving areas as municipalities as it could lead to waste of funds.
"The only challenge will be when governors classify undeserving areas as municipalities," he said, adding that the Senate would scrutinise the boards to ensure prudent use of funds.
The affairs of municipalities are to be run by boards, and their roles include collection of revenue, land use control, signing of contracts, seeking partnerships and joint ventures and regulating public transport.
This means the municipalities will be in charge of project implementation in urban areas.
The boards may be required to consult county executives before implementing projects to avoid duplication of duties, but this is not anchored in law.
In establishing the municipalities, the counties are banking on the Urban Areas and Cities Act assented to in 2011. The executive has prepared charters that require the approval of county assemblies before any town is conferred municipality status.
According to Nyeri County Executive in charge of Land and Physical Planning, Mr Kwai Wanjaria, the World Bank has advanced a loan of $30 million (about Sh30 billion) to the national government for disbursement to devolved units as grants.
Dr Wanjaria said Nyeri would receive Sh268 million, which was factored in the budget for the current financial year.
"The money will be used to build a bus park, market and modern stalls at Asian Quarters after relocation of the current dumpsite. This will decongest the town and ensure that it is clean," he said.
Nyeri county assembly will next week study the charter and recommend changes to the document.
"Ward Reps will have a chance to scrutinise the charter before it is approved. They may decide to make changes or approve it as it is," said Assembly Speaker John Kaguchia.
The board will have a maximum of nine members, four appointed by the governor through a competitive process, while the rest will be nominated by registered groups.
Members of the board will work on part time basis and will only draw allowances. Counties may also have to employ staff to aid municipal managers.
The Act stipulates that the County Public Service Board shall, through a competitive process, appoint a secretary who will be responsible for day-to-day management of the board.
However, under the current Act, very few towns have populations of 250,000 residents or more, which has been cited as a condition for the upgrade.
An amendment Bill currently in Parliament proposes to reduce this number to 50,000, which means more towns could qualify for municipality status.