Galway County Council will be liable to pay for the property tax on its housing stock to the tune of between €90,000 and €100,000 by January 1, 2014, councillors at a meeting held on Monday were told.
Following a presentation of the financial review for 2012 which showed an overall deficit for Galway County Council of €494,000 for that year, Cllr Seán Canney asked head of finance Gerard Mullarkey if there were provisions in place to deal with the costs associated with the property tax, and called for local authority houses to be exempted.
In response, Mr Mullarkey said that the “only concession” given by Revenue was that local authorities do not have to make the payment until January 1 next year, and there have been on-going discussions in relation to this. He added: “We’re obligated to carry the cost. The payment will be made in 2014 and we will have to budget for that.” It was further explained that local authority houses are liable but have been devalued to the first band.
While the deadline for payment for private householders was extended from midnight Tuesday until 8pm last evening, local authorities including Galway county and city, will have the remainder of the year to come up with the payment. It is understood that with housing stock classified in the first band this will result in tax charges of around €45 per property for 2013 and €90 per year from 2014 to 2016. It is estimated that the cost for Galway County Council, as well as Galway City Council, for 2014 could rise to around €180,000.
Difficult year
Mr Mullarkey had earlier presented the financial review which stated that last year had been a “difficult year for the council with a continued decline in central funding, and the reduction in mid year of €790,000 in the notified Local Government Fund. The overall result for the year is a deficit of €494,000”. There had been positive variances in the divisions of housing and building (€485,000 ), roads transportation and safety (€392,000 ), water services (€462,000 ), development management (€246,000 ), environmental services (€164,000 ), and recreation and amenity (€151,000 ). However, there were adverse variances in the agriculture, education, health and welfare division to the tune of €134,000, mainly due to additional expenditure in relation to works on piers and harbours. This came despite the main activity of the HEG grants and works undertaken on drainage projects being completed in 2011 with the expenditure and income coming in below budget. The greatest adverse variance was seen in the division of miscellaneous services which came to €1.2 million, and which, according to Mr Mullarkey, was largely due to the number of vacant buildings. The financial review stated that the main variance “relates to the provision for irrecoverable rates which was €2.2 million higher than budgeted for partially offset by a saving on the operation of motor tax”.
Gross expenditure in 2012 was €89 million as compared with €122 million in 2011, reflecting largely the reduction in activity in the roads programme. The overall position on the capital account is a reduction of €15 million reflecting the fact that expenditure on the water programme is not to be funded from the council’s own resources.
The council’s water expenditure related to the provision of water and waste water treatment plants in addition to the funding of group water schemes. The major schemes in 2012 are the Tuam Town Distribution Network, Barna Sewerage scheme, DBO Bundle 2, in addition to the continuation of works under the water conservation project together with the remedial action programme for which the council received approval to borrow €4.4 million to fund non-department funded elements.
In relation to this loan of €4.4 million Cllr Jim Cuddy questioned whether Irish Water would be taking over this liability when these water services are transferred over. Mr Mullarkey explained that there were on-going discussions but he was of the view that if Irish Water are “taking the assets they take the liability as well”.
