City Council collects almost €35 million from businesses in past year

Commercial rates collection levels in the city have rebounded in tandem with growth returning to the economy.

Galway City Council collected almost €35 million in commercial rates in 2017, which represents a collection rate of 78%.

That’s the highest it has been since the economy fell off a cliff in 2012 causing retailers to fold and businesses to renege on their rates’ commitments.

Head of Finance, Edel McCormack, said at a low point during the recession, collection rates once stood at 62%.

While she acknowledged the upturn in the economy had helped to improve rates’ collections levels, Ms McCormack said her staff engaged with struggling businesses to put in place payment plans.

This engagement and the “steadfast efforts of the team in the Debt Management unit” has reaped rewards in 2017, she said. Rates arrears last year stood at €10.6m.

City Council Chief Executive Brendan McGrath joined several city councillors in commending the work of Ms McCormack and her department, for their work in delivering a positive financial position for the Council.

He said other Councils simply wrote off bad arrears to improve the percentage of rate collections, but Ms McCormack and her team worked with businesses and devised realistic repayment plans in order to pursue every cent owed to the local authority.

Improvements in debt collection in 2017, including in rates, housing rent and housing loans, meant that the amount of debt outstanding was lowered by some €1.8m last year, Ms McCormack said.

The City Council’s income and expenditure account for last year, which was presented to city councillors at Monday’s meeting, recorded a surplus of €721,003.

“This surplus arose as a result of increases in some income sources and actual expenditure lower than expected,” she said.

Mr McGrath said while the position was positive and a good news story, a 1% reduction in income or increase in expenditure would change the complexion of the Council’s budget.

The City Council was allocated €6.5 million from Local Property Tax receipts, with €4.2m of this allocated to general expenditure and €2.3m ringfenced for housing provision and services.

Though the Non-Principal Private Residence charge was abolished in 2013, the City Council received income of €1m last year from collection of outstanding liabilities.

Capital expenditure in 2017 amounted to €12.9m, and capital income was €9.2m.

The Council’s liabilities for long-term loans stood at €63.5m at the yearend, compared with €70.5m the previous year. These relate to loans to purchase lands for housing.

The figures showed that Council wages and salaries amounted to €19.6m last year; and contract payments totalled a further €5.2m, which was a concerned to the deputy mayor, Mike Cubbard (Ind).

Cllr Cubbard questioned whether the public was getting value for money and he suggested the Council should hire more staff to do the work that private contractors were doing.

“I have no doubt there have been cases where the work of a contractor is warranted and required which I have no difficulty with for emergency works, but for everyday works we now have an opportunity to re-deploy a majority of this €5.2 million to create jobs and create a future for a large number of people,” he said.