Mixed news on finances, council says

Tuesday, 15th May, 2018 11:21am

Mixed news on finances, council says

Áras an Chontae, Mullingar.

There was good and not so good news in the finance report presented to members of Westmeath County Council at their monthly meeting, held in Mullingar last week.

Rent collection levels are close to 100 per cent, the yield from the second homes tax is higher than expected, and fire certificate fees income is ahead of budget.

Planning fees income of €95,359 to March 2018, at 38%, is also well ahead of budget.

However, a serious hit – €260,000 in this year alone – is coming due to changes in the IPB (Irish Public Bodies) insurance dividend, council finance officer Jimmy Dalton told members.

Explaining the IPB changes, Mr Dalton revealed that for this year and for the coming four years, the council will receive €2.478m pa, drawn from retained earnings.

However, dividends declared are now going to be based solely on a portion of annual profits, as opposed to a set amount, and they will no longer be supplemented with additional amounts from retained earnings. “This change will result in a significant reduction in the dividend,” he said, predicting that this year instead of the €590,000 the council had budgeted for, it would receive just €330,000.

Mr Dalton also explained that the council had engaged with the IPB in a retained earnings distribution proposal.

“We have agreed a settlement of all remaining current and potential liabilities arising from historic policy arrangements in the sum of €1,145,000,” he said, revealing that the first tranche of the retained earnings distribution has been received, and it amounted to €2,478,000.

Similar amounts are to be returned to the council by IPB in 2019 to 2022, he stated.

Mr Dalton said that at the same time, the trend and rate of increase in insurance premiums was up. In addition, the price the council will pay for insurance will be affected by the claims made against it.

As a result of the changes, a key challenge will be how to manage the impact: “In order to manage this situation the management team has agreed to apply the first tranche of the retained earnings distribution of €2,478,000 to repay loan debt,” he stated, explaining that this would reduce the loan repayment burden on future budgets by €630,000 per annum.



An unexpected boost to council coffers is the continued strong return of arrears under the second homes tax.

Known formally as the Non–Principal Private Residence (NPPR) tax, the levy has yielded Westmeath County Council €296,450 in the first three months of this year.

“On the basis of the receipts to date the budget for 2018 of €300,000 will be exceeded by a significant amount,” Mr Dalton told members.

The take for the same three-month period last year was just €133,470.

Mr Dalton told members there is no comprehensive database showing second home ownership in this country – but as there has been an increase in the sales of houses, it has been emerging that there is a tax liability attached to some of these.

“It comes to us on foot of sales being transacted,” he stated of income from the tax.


Fire Control Certs

Also running well ahead of budget is the Fire Certificate fees income, which, for the period January 1 to March 31, came to €48,156.

“There were 10 certificates with fees of greater than €1,000 in the first three months of the year, generating income of €42,835. The budget for 2018 is €100,000,” Mr Dalton told the meeting.


Rent collection

Mr Dalton revealed that the council had continued to make progress in improving its collection percentage and in reducing arrears.

He said that while the average collection percentage nationally in 2016 was 87%, Westmeath County Council achieved a 94.93 collection rate in 2015, 95.52 per cent in 2016 and 96.89 per cent in 2017.

“Our collection percentage target for 2018 is 97%,” he said.

Progress is also being made in addressing loan arrears, Mr Dalton disclosed, revealing that the collection rate in 2015 was 73.32 per cent; in 2016 it was 85.25 per cent and in 2017 it was 89.36 per cent, and this year’s target is 95 per cent.

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