French General Code of Local Authorities
In force1° For the application of Article L. 1611-3-2, local authorities, their groupings and local public establishments whose debt-reduction capacity, defined as the ratio between outstanding debt at the balance sheet date and gross savings for the previous financial year and expressed as a number of years, recorded during the penultimate financial year, is less than :
a) Twelve years out of the average over the last three years for communes, the City of Paris, local public groupings and establishments;
b) Ten years out of the average over the last three years for départements and the Lyon metropolitan area;
c) Nine years out of the average over the last three years for regions, the Corsican local authority, the territorial authorities of French Guiana and Martinique.
This ratio takes into account the main budget and annex budgets. It is defined in terms of number of years. Gross savings are equal to the difference between actual operating revenue and actual operating expenditure. When the gross savings of a local authority or group of local authorities is negative or zero, its amount is considered to be equal to one euro for the calculation of the debt reduction capacity.
Outstanding debt is defined as the credit balance recorded in loan and similar debt accounts, excluding accrued interest and bond redemption premiums.
2° When the debt reduction capacity is greater than the thresholds set out in 1°, local authorities, their groupings and local public establishments may nevertheless join Agence France Locale if the current self-financing margin, calculated over the average of the last three years, defined as the ratio between actual operating expenditure, plus debt repayment, and actual operating revenue, recorded during the penultimate financial year, is less than 100%.
Actual operating expenditure is defined as the total net expenditure for the year resulting in actual movements within the operating section of the local authorities or establishments concerned. They correspond to budgetary transactions recorded in class 6 accounts, with the exception of budgetary transactions, and exclude in their entirety the book value of fixed assets sold, differences on realisations (positive) transferred to investment and allocations to depreciation and provisions.
Actual operating revenue is defined as the total net income for the financial year resulting in actual movements within the operating section of the local authorities or establishments concerned. It corresponds to budgetary transactions recorded in class 7 accounts, with the exception of budgetary transactions, and excludes all proceeds from the sale of fixed assets, differences on realisations (negative) written back to the profit and loss account, the share of investment subsidies transferred to the profit and loss account and write-backs of depreciation and provisions.
Debt repayments are understood to be budgetary transactions, with the exception of budgetary transactions, recorded as debits in the borrowings and similar debt accounts, and exclude in their entirety transactions relating to the option to draw down cash lines, temporary repayments of borrowings from credit institutions, debt refinancing, accrued interest and bond redemption premiums.
For the calculation of the current self-financing margin, in order to restate any cross-flows between the main budget and the subsidiary budget(s) of local authorities, their groupings and local public establishments, the transactions between the main budget and the subsidiary budget(s) within the operating section relating to reimbursements of expenses are restated, reimbursements of personnel costs, interest reimbursements, the assumption of the annexed budget's deficit by the main budget or the transfer of the surplus from the annexed budget to the main budget, operating subsidies and exceptional subsidies from the main budget to the annexed budget.
3° The deliberative assembly must approve membership of Agence France Locale. An explanatory memorandum summarising the membership to be approved is sent to the members of the deliberative assembly with the notice convening the meeting. It specifies, for each application for membership, whether the criteria mentioned in 1° or, where applicable, 2° have been met.
