The budget of a community of municipalities is not just an annual accounting exercise. It is a management tool that translates political choices into financial flows, with a specific constraint for intercommunalities: the management of competencies transferred by member municipalities, whose costs and benefits are never evenly distributed across the territory.
Compensation allocations and distribution keys for transferred charges
When a municipality transfers a competency to the community of municipalities, the historical cost of that competency is neutralized by a compensation allocation (CA). The mechanism relies on the evaluation of transferred charges by the local commission for evaluating transferred charges (CLECT), a parity body whose conclusions bind the community council.
The difficulty lies in the initial calculation. The net transferred charges (expenses minus direct service revenues) are fixed at the date of transfer. Any subsequent cost deviation is absorbed by the intercommunal budget, not by the municipalities. If a road competency cost a certain amount at the time of transfer but maintenance expenses increase, the community bears the difference without automatic revision of the CAs.
The information published on the official CC Rhin website illustrates how an intercommunality can make this financial mechanism understandable to its member municipalities.
The CLECT can reevaluate the charges in certain cases (new transfer, restitution of competency), but the free revision of CAs requires the unanimous agreement of the community council and each concerned municipal council. In practice, the CAs often remain fixed for the entire duration of the term, creating growing imbalances between net contributing municipalities and net beneficiary municipalities.
Main budget and annex budgets of a community of municipalities
The main budget covers the mandatory and optional competencies exercised by the community. It is divided into two sections: operating section (personnel costs, general expenses, depreciation allowances, debt interest) and investment section (equipment, repayment of borrowed capital, equipment grants paid).
Services of an industrial and commercial nature (water, sanitation, waste collection if operated in-house) are subject to annex budgets. These budgets are voted on at the same time as the main budget but are not consolidated with it. The balance of each annex budget must be ensured independently, without cross-subsidization from the main budget (except for regulated exceptions).
This separation has a direct consequence on readability: a municipal elected official who only consults the main budget does not see the real weight of industrial and commercial services. We recommend presenting a consolidated table in the annex of the budget orientation debate, even if no text requires it.
Intercommunal revenues: taxation, grants, and equalization funds
Communities of municipalities with single professional taxation (FPU) receive the entirety of the property tax on businesses, the value-added tax on businesses, and related taxes (TASCOM, IFER) across the entire intercommunal perimeter. This regime is the most widespread.
Other tax revenues depend on the adopted regime. Some communities also receive a share of household taxation (housing tax on secondary residences, additional property tax).
Regarding grants, the main one is the global operating grant (DGF) paid by the State, which includes two components:
- The intercommunal grant, calculated according to criteria of population, fiscal potential, and fiscal integration coefficient (CIF). The more competencies a community exercises that are subject to taxation, the higher its CIF and the more its grant increases.
- The compensation grant, which neutralizes revenue losses related to successive tax reforms (elimination of the salary portion of the professional tax, then the professional tax itself).
- The horizontal equalization funds (notably FPIC), which redistribute a portion of the tax resources from the best-endowed territories to the less favored ones. The amount collected or received depends on the aggregated financial potential of the entire intercommunal area.
Distribution of the cost of a transferred service: making visible who pays and who benefits
The often-absent angle in budget presentations concerns transparency regarding the disparities between municipalities within the intercommunality. A competency like early childhood or demand-responsive transport generates costs borne by all intercommunal taxpayers, but the service mainly benefits the municipalities where the facilities are located.
To objectify these disparities, several tools exist:
- The annual report of the CLECT, which details the amount of transferred charges and the level of CAs paid or received, municipality by municipality.
- The establishment of dashboards by competency, breaking down actual expenses by the municipality where the service is located and relating these expenses to the number of actual users (not just the legal population).
- The use of the financial and fiscal solidarity pact, which allows directing a portion of intercommunal resources to disadvantaged municipalities in the form of community solidarity grants (DSC). The distribution criteria for the DSC are freely set by the community council.
The financial pact makes explicit the flows between municipalities and requires an annual political debate on territorial solidarity. Without this tool, financial transfers remain buried in the overall budget mass.
Budget calendar and points of vigilance
The initial budget must be voted on before April 15 of the relevant year. The budget orientation debate (DOB) must take place at least two months before this vote. Amending decisions can occur at any time after the initial budget vote. The supplementary budget, which reflects the results of the previous year, is voted on as soon as the administrative account for the previous year is finalized.
The real balance rule requires that each section be voted on in balance, and that the repayment of debt capital be covered by own resources (not by borrowing). This rule fundamentally distinguishes local budgets from the State budget.
The real lever for management remains multi-year forecasting. Voting on a balanced annual budget guarantees nothing if the trajectory of debt or net savings deteriorates over three to five years. Regional audit chambers regularly remind this requirement in their observation reports.
