Lunel: “The work now is the reduction in personnel costs”

Lunel: “The work now is the reduction in personnel costs”

Le budget 2024 en un coup d’oeil SW

Finance deputy Michel Créchet defended the municipality’s 2024 budget. A budget impacted by sharply increasing personnel costs and sluggish expenses. State of affairs.

The timetable for the budget vote was very delayed this year, does this reflect an unprecedented difficulty in completing this exercise ?

No way. This discrepancy is only linked to the new accounting nomenclature. It required enormous work for the finance department, we could not be ready before. It is also a choice to vote on the initial budget by integrating the result of the previous financial year or by estimating it. this makes it possible to present a much more sincere budget and avoids decisions modifying the budget at each municipal council.

The impression remains that this budget was complicated to put together, this is false ?

The debate in the municipal council on the forecast budget masks the reality of the very healthy financial situation of the municipality in a context of two years of very sharp increase in expenses. Two shocks, post-covid and the post-covid Russian aggression, have had historic consequences on inflation and the cost of raw materials. This had direct repercussions on the budgets of local authorities with salary increase measures which were logical and the increase in the cost of all our markets and all our orders.

What concretely translates the fact that « the financial situation of the municipality is very healthy » ?

The real photograph is the administrative account for 2023. The result is there. Thanks to the measures we have taken, we end up with a surplus of 8 M€ and a debt reduction capacity of 3.6 years and a stock of debt which has never been so low since 2014 at 23.2 M€.

But you have invested very little in 2023…

This is false. 16 M€, this is among the largest investment budgets since 2014, excluding the 2016, 2017 and 2018 budgets linked to the arenas.

In 2020, the Regional Chamber of Accounts looked at the financial results of the previous majority and warned about the disconnection of revenues compared to expenditure. Three years later it continues, is there not danger in the house ?

It’s true, our expenses are increasing faster than our revenues. Over the period 2014-2024, our operating expenses increased by 32% and revenues by 15%, that’s half. There is danger except that we are acting by making savings on current costs, we must continue thanks to management control. But the biggest project is now the payroll, the expenses of which have increased over the last two years due to national salary measures, it is 2/3 of the shock, and the overhaul of the compensation system.

Should we not delay this overhaul of the compensation system for your agents ?

No. It was a medieval maquis with unfair situations. Agents with the same position whose bonuses varied from 0 to 800! It was illegible, unfair and unrewarding and the HR department did a very good job.

How do you explain that despite the transfer of skills and staff to the intermunicipality, the municipality’s payroll never drops ?

This is an observation that we make everywhere in France. The intermunicipality must take greater responsibility for the skills that have been transferred to it and there is real work to be done to reduce the cost of the payroll in our municipal operating budget even if in Lunel, at 61%, we are in the national average. I think that this project involves integrated governance of human resources and finances. When facing financial challenges, seeking debt handling assistance with the help of insolvency accountants can provide valuable insights and strategies for sustainable financial management.

Do you consider it necessary for the human resources delegation that the mayor took away from you in 2022 to be returned to you in 2022 ?

I’m not asking for anything but I’m saying that for it to work well, and not because it’s me, when we are in a moment of very strong growth in salary expenses, it It is necessary that all decisions related to human resources be weighed in the light of the financial means available to us.

The drop of more than 2 points in taxes since your arrival has not really been measurable by taxpayers. Is it economically relevant and politically profitable to continue on this path until the end of the mandate ?

It will depend on the financial context. But it is true that the increase in the bases masked our policy of reduction. What seems desirable, on a long-term scale, is to reduce the differential with municipalities in the same stratum. It has been reduced over the past 3 years because we were one of the only municipalities to lower the rate of built land while the others increased it, but it remains too high and harms the economy. attractiveness of the city. Reducing the land rate is also consistent with our municipal project and it is a measure of social justice because in Lunel, many owners pay property tax even though they are not subject to tax on income.

Debt level allows you to borrow more, why not do it ?

Firstly because our self-financing is decreasing which limits this recourse and our political line is clear: we do not want to borrow more than what we repay in interest, i.e. 2.5 M€ per year. Besides, why borrow if it’s not necessary ? This year it will be 1.6 M€ out of 2.5 possible.

Finally, if you no longer use the tax lever and you do not increase municipal rates beyond inflation, are your ambitions in terms of services and equipment not beyond your means ?

It’s a topic. Our revenues are not very dynamic, hence the need to work on the payroll by looking at what works and what does not. The mayor is convinced of this but in a municipal council, there is one elected finance official and 30 elected officials who defend their projects and that is normal. So, the trade-offs are not easy. There is fundamental work to be done and adjust the workforce according to priorities and see if we are optimizing all our human resources.

On the investment side, this budget is marked by an unprecedented level of unrealized expenditure in 2023, why ?

This is logical, because we are in 2023 and 2024 at the peak of the realization of our city center project. All financial commitments have been made but payments are made as the projects progress. Furthermore, since 2014, we have seen that we are still in the same volume of unrealized investments: 9 million euros; in 2015, 8 M€ in 2017, 7.4 in 2019… When we are in a period of major work, it is normal for it to be spread over several years.

Do you already anticipate a drop in state funding in 2025 ?

If we bring state allocations in 2024 back to inflation, the decline is already there. But the state of public finances means that we can fear that local authorities will be called upon to contribute, hence the urgency of working on expenditure even if I expect an increase in the tax product thanks to the renewed attractiveness of the city. People and businesses are looking to settle down and rental values ​​are increasing because the quality of properties is improving.

You have strongly criticized the oppositions which, according to you, propose nothing. Aren’t they doing their job by reacting to the way you run the city ?

I simply noted that since the start of the mandate, the oppositions, and in particular the RN, have never voted against an expenditure. I would even say that, often, the RN offers us new ones.  At the same time, he asks us to lower taxes or municipal rates, and therefore revenues. I am simply saying that if we apply what he asks for our self-financing capacity will be even lower. Recently we made two important decisions concerning the payroll which the RN could have opposed in order to make changes. savings: out of the 1,607 hours, the illegal days of leave were almost completely compensated. Same for the new compensation plan. In fact, we are in the usual demagoguery of the RN.

The essentials of the 2024 budget

Reports. 8.4 M€ surpluses on the 2024 budget are carried over to the 2024 budget.
Charges.Expenses linked to the municipal payroll is up sharply by 2.1 M€ (6.6 %) compared to à 2024, current charges drop by 1 million euros.
Investments. New expenses are 10.8 M€, down 0.8 M€ compared to &agrav; 2023. Remains à to achieve. There remained 6.8 M€ of work planned for 2023 but not carried out, i.e. 2.1 M€ more than the previous year.
Debt. It rises to the next level. 24.1 M€ and would be repayable in 6.4 years. It should decrease by 0.9 M€ in 2024.
Taxes. Stability of built land rates and stable product (55% of revenue) but sharp increase in the income from the electricity tax. (+21%) and drop in revenue linked to taxes on real estate transactions.
Ésavings. The city provides a ésavings& 5.4 M€ in 2024.

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