Merging of municipalities

In principle, the initiative to address a potential fusion of a municipality emerges from the College of Aldermen.

At this stage, the question may arise as to whether it is useful to carry out a preliminary analysis of the advantages and disadvantages of a merger for the municipality. In practice, such an analysis has proven itself to be superfluous in certain municipalities, since the will, or even the need, to merge is unequivocal.

The same applies to the identification of one or more potential merge partners; existing inter-municipal cooperation is sometimes so closely tied together, that this question does not even arise.

However, if there are questions or even doubts within the municipal council, a thorough preliminary analysis is recommended.

The analysis fundamentally consist of two sections:

1. an analysis of the strengths and weaknesses of the municipal’s current situation based on an inventory of the existing situation (quality  and number of services offered to the population, state and availability of infrastructure, etc.), the opportunities and risks the municipality will have to face in the future (development potential, positioning in the region, etc.), and the expected outcome of a potential fusion;
2. an assessment of potential merger partners.

This phase summarises the procedural steps that the municipalities need to follow in order to complete their merger project.

1. Resolutions of the communal councils (CC) on conducting exploratory discussions >Dispatching the resolutions to the Minister for Home Affairs for the record
2. Joint analysis of the advantages and disadvantages of a mergePossible consultations of the advisory committees, local associations or the population (working groups, workshops, surveys, etc.)
3. Definition of future mutual projects and a common identity                                                                      Political and administrative organisation of the new municipality: name, emblem, personnel, use of the special state subsidy, composition of the future College of Aldermen (CBE) and of the CC, elections (relative majority system), transition phases, etc.
4. Resolutions of the CC on the intention to merge                                                                                   >Dispatching the resolutions to the Minister for Home Affairs for the record
5. Drafting of the merger agreement between the State and the municipalities
6. Signature of the agreement by the Minister for Home Affairs and the CBEs
7. Drafting of the merger bill by the Minister for Home Affairs
8. Resolutions of the CC regarding the organisation of a referendum
   >Dispatching the resolutions to the Minister for Home Affairs for the record
9. Presentation of the merger project and communication with the population                      Booklets, informational events, social media, etc.
10. Referendum  
11. Resolutions of the CC regarding the adoption of:
    -the merger
    -the merger agreement
    -the draft merger bill                                                                                                                                   >Dispatching the resolutions to the Minister for Home Affairs for the record
12. Submission of the merger bill to the Chamber of Deputies by the Minister for Home Affairs
13. Vote in the Chamber of Deputies and publication of the merger law
14. Coming into effect of the merge
    on the date fixed by the merger law

Resolutions of the communal councils on conducting exploratory discussions

The communal council may instruct the College of Aldermen to conduct exploratory discussions with the concerned partner municipality/ies.

The associated resolution, even if it does not irrevocably mean that the municipality is going to merge, expresses the firm will of the communal council to start the merging process. Although unanimity among the members of the communal council is not essential, it is nevertheless reassuring for the continuation of the work that the deliberation is supported by a large majority of the council members.

The potential partner municipality/ies also take a decision on the conduct of exploratory discussions.

It has also proven essential to inform and involve the local staff at this stage, particularly with regard to concerns related to their future employment situation.

Therefore, at this moment in time, the municipal staff can already actively participate in the merger process, particularly by asserting their knowledge concerning the specificities of the municipality.

Joint analysis of the advantages and disadvantages of a merger

Once the resolutions on conducting exploratory discussions have been adopted, a joint analysis of the advantages and disadvantages of merging the concerned municipalities is carried out.

There are no standardised instructions for this phase. Two possible scenarios might arise:

• From the outset, the members of the communal councils have a common opinion on the advantages of merging. In this case, a summary analysis of the key elements regarding a merger may be sufficient.
• If, however, several members of the communal council are undecided or reluctant to the idea of merging, a detailed analysis of the advantages and disadvantages of a merger is recommended.

Definition of future mutual projects and a common identity

The merging of municipalities represents a unique opportunity to launch new projects in the interest of the citizens. During this stage, the common future projects for the new municipality are developed.

It is recommended that intermunicipal meetings take place on a regular basis, according to a determined schedule and with precise agendas. These meetings are usually prepared by the College of Aldermen and, if necessary, accompanied by external experts (Ministry of Home Affairs, SYVICOL and others).

On some aspects of the merger, it may prove difficult to reach an agreement between municipalities (e.g. name of the merged municipality, headquarters of the future town hall and its possible annexes, distribution of seats on the communal council, allocation of certain key staff members, projects to be carried out and their potential location, etc.). The challenge is then to find solutions that are adequate for everyone.

The seat, the name, and the emblem of the new municipality

As aforementioned, the discussions on the future seat, name or emblem of the new municipality can be as arduous and lengthy, as they can be straightforward and easy from the start.

The municipalities will have to choose a seat for the new municipality, which will be included in the merger law. Nevertheless, it is quite attainable to maintain the operation of some of the annexes located in the former municipal seats.

The name should enable citizens to identify with the new entity. During previous mergers, the concern of the communal councils was to adopt simple names that were easy to remember and to communicate. Some municipalities kept the name of one of the former municipalities or have merged the two names; others have opted for the name of a locality or a common geographic element (valley, hill, river, etc.).

A merged municipality can either create a new emblem or keep the existing ones of the former municipalities. In the case of a creation of a new emblem, the municipal authorities must address the heraldic commission of the state, which is attached to the Ministry of State and needs to approve and register the new emblem.

In addition to the emblem, a municipality may evidently choose to create a logo, an option chosen by more and more municipalities.

Administrative organisation and services of the new municipality

The administrative organisation of the new municipality provides an opportunity to lead a profound reflection about the commitment, the organisation and the equipment of future municipal services. Numerous possibilities present themselves: extension of the opening hours of the municipal’s office, staff reinforcement, new organisation of the technical service, new approaches regarding the infrastructure maintenance, development of new services (department of housing, public relations, etc.).

It is up to the politicians to find adequate solutions that meet the needs of the population.

The special state subsidy

The state supports the merging of municipalities with a subsidy set by the Government council. The Ministry of Home Affairs is at the disposal of the municipalities to inform them of the current modalities.

The allocation of the state subsidy is determined by the merger bill based on the negotiations between the municipalities and the state. So far, the municipalities have opted either for an allocation for specific projects or for the repayment of municipal loans.

Political organisation: composition of political bodies, elections, transitional phases

In all municipalities, whether they vote according to the majority or proportional system, it is possible to increase the number of seats in the communal council and the College of Aldermen during the transitional period (i.e. one or two legislatures since the implementation of the merging) and to assign each former municipality the status of an electoral district in which a quota of councillors is to be elected to ensure that each of the former municipalities is represented in the communal council. Nevertheless, each voter elects the councillors of all the constituencies. The law may also anticipate that each former municipality is represented in the College of Aldermen.

Municipalities voting according to the majority system, but exceeding the threshold of 3.000 habitants after the merger, may maintain this electoral system in place for a transitional period.

The political leave of the elected representatives is directly linked to the number of seats in the communal council of a municipality. Elected representatives of a merged municipality with a temporarily enlarged communal council can thus benefit from more weekly hours of political leave, which allows them to commit further to the implementation of the merger.

Resolution on the intention to merge

Once the conclusions adopted by the communal councils in relation to the analyses carried out are positive and there is an agreement on the fundamental questions, the communal councils take a resolution declaring their intention to merge and confide their aldermen with the implementation of this decision.

Elaboration of the draft agreement and the draft merger bill

It is up to the College of Aldermen, in consultation with their communal councils, to draw conclusions from the discussions on the development of the new municipality and to include them in the form of priorities and projects to be carried out in a draft agreement to be negotiated with the State. The Ministry of Home Affairs assists the municipalities in the drafting of this agreement and advises them in particular on the legal aspect.

The agreement signed between the municipalities and the Minister for Home Affairs serves as a basis for the draft bill regarding the merger of the concerned municipalities. The elements to be included in the bill on the merger of two or more municipalities are detailed in Annex 2. The Minister for Home Affairs draws up the draft bill in consultation with the municipalities.

In Luxembourg, a merger of municipalities can only take place if a municipal consultative referendum on the merger project has been held beforehand. The procedure to be applied corresponds to that defined by the municipal law for the organisation of the municipal referendum. This procedure must be initiated at least three months before the scheduled date of the referendum, in order to respect the deadline set out by the electoral law, particularly with regard to the closing of the voting lists and the postal ballot.

The decision to hold a referendum is subject to a deliberation by the communal council. The referendum is prepared in collaboration with the services of the Ministry of Home Affairs. Ideally, it should be held about twelve months before the merger law comes into force law in order to allow an adequate preparation of the implementation of the merger.

Presentation of the merger project and communication with the population

Before the referendum is held, the different elements of the draft agreement are presented to the general public at one or more information events. This enables voters to cast an informed vote on the day of the referendum.

Furthermore, a survey within a representative sample of the population can be an interesting indicator for taking further communication initiatives.

Most of the merged municipalities have also opted for a publication of an all-in booklet to present the advantages of the merger, the new projects that will be realised and all of the upcoming changes (name of the municipality, composition of the communal council, etc.)

Regularly reporting on joint initiatives and projects of the municipalities concerned in the "Gemengebuet" is also a useful way to keep the population informed.

Organising one or more information meetings for citizens is a practice adopted by all municipalities that have merged in the past. Some have been content with one meeting prior to the referendum, while others preferred to inform their citizens as the project progressed.

Proper preparation for these meetings is essential. Some municipalities have used the support of consultants to organise them or to lead the debates. Reviewing all the disadvantages of the merger beforehand in order to be prepared to react with arguments during a debate has proven to be a successful strategy for the merger project.

Resolutions on the adoption of the merger, the merger agreement and the draft merger bill

After the referendum, the communal councils proceed to the final vote concerning the merger and adopt the convention by deliberation. The draft merger bill finalised by the Ministry of Home Affairs is also adopted by the communal councils.

Subsequently, the Minister for Home Affairs submits the bill to the Chamber of Deputies and the legislative procedure begins. Once the law is passed, promulgated and published, the merger enters into force on the date set by the law.

Experience has shown that the phase between the referendum and the birth of the new municipality is of crucial importance for a successful administrative and technical transition. In most cases, the implementation phase is not yet complete at the time of the merger.

Organisation of the new administration and staff

As supervisor of the staff, the Colleges of Aldermen can determine the organisation of the future administration, in particular in accordance with the priorities set out in the merger agreement.

It is recommended that the staff be involved in the reorganisation of the services and the resulting distribution of tasks, taking into account the qualifications and, as far as possible, the interests and aspirations of the individuals involved.

During a transitional phase, several municipal secretaries may be appointed, although a good distribution of tasks by the College of Aldermen will be essential.

As far as the collector is concerned, the municipal law does not allow this position to be shared between several people. It is therefore necessary either to reach an amicable agreement with the potential incumbents, or the communal council of the merged municipality has to choose (by vote) the collector of the new municipality from among the incumbents of the former municipalities. Collectors who are not appointed will keep all their benefits and career prospects, but will have other duties in the merged municipality.

Harmonisation of taxes, subsidies and municipal regulations

In order for the new municipality to present a coherent image from the start, it is recommended to standardise, or at least harmonise, municipal regulations, taxes and subsidies to associations before the merger. This work requires a great deal of cooperation between the politicians and municipal secretaries of the merging municipalities. Harmonisation over two or three stages may be prudent, especially when a municipality has to increase its taxes and fees substantially.

The determination of municipal business tax and property tax rates will be done in the merger bill.

Budget, accounts and financial situation

The merged municipality will face a new financial situation. Officials of the Ministry of Home Affairs are at the service of the local authorities to simulate their new financial situation before the merger.

In order to guarantee the collection of revenues and the payment of municipal expenses from the merged municipalities, a budget for the new municipality must be drawn up by 1 January at the latest. This budget is to be drawn up jointly by the municipalities intending to merge before the merger takes effect.

According to the provisions of the municipal law, operations relating to the collection of revenue relating to a given financial year and the payment of expenditure incurred up to 31 December may be extended until 30 April of the following year. Since the entry into force of a merger is often recommended on 1 January, municipalities must close their accounts for the current financial year before this date.

Municipal accounts must therefore be drawn up and their latest detailed financial statement sent to the Ministry of Home Affairs before that date. At the same time, the municipalities must merge their accounts and hand over the cash to the collector of the merged municipality. For this purpose, they are requested to consult the relevant departments of the Ministry of Home Affairs, which are at their disposal.

Management of the different PAGs

Ideally, the PAGs of the merging municipalities should be analysed in advance, so that the key elements for uniform planning are available before the merger.

As soon as the merger comes into effect, a gradual harmonisation of the regulations and zoning must be carried out with a view to the whole municipality, while respecting the national guidelines and instruments of spatial planning.

IT adaptation

It will be necessary not only to provide a certain budget for the IT adaptation, but also to organise it in beforehand so that there are no problems of incompatibility between the systems once the merger becomes effective.

Representation in existing inter-municipal cooperation’s

Municipalities intending to merge are advised to carefully consider the impact of the merger on the inter-municipal cooperation’s, nature parks and the regional social office. It is also advisable to examine all agreements signed with other municipalities.

The implementation of a participation and communication strategy from the beginning of the process allows to facilitate this process, to determine when it is appropriate to involve the key forces of the municipality and how to present the merger to them. However, such a strategy is highly dependent on local, political, and other specificities, as well as temporary constraints.

Finally, the new municipality comes into being on the date fixed by the merger law. However, at this moment in time, the transitional phase is not complete yet.