Cash-strapped council forced to write off €3m in unpaid rates

A CASH-STRAPPED local authority has had to write off almost €3 million in unpaid rates.

Cork City Council has also ruled out introducing a 12-month rates payment break for under-pressure businesses.

Income from rates is one of the council’s most important sources of income. It will account for e61.5m, or 31% of its total projected income for 2009.

The news emerged at a council meeting on Monday night where according to the city manager’s orders, the council has deemed just over e5.3m in uncollected rates as “temporarily unrecoverable”. The arrears will be carried forward for inclusion on the council’s books this year.

But it has had to deem an incredible €2,898,747 in unpaid rates as “irrecoverable”.

It has, however, managed to recover €113,934 in arrears from rate-payers following actions in the District Court. It has instituted legal proceedings against two business sector individuals for recovery of outstanding water rates. They will be pursued through the district court.

And it has also begun legal proceedings against one individual for the recovery of outstanding rent due on the hire of the concert/millennium hall in City Hall. Councillors were presented with the information which is contained in the manager’s orders document — a list of official actions taken on behalf of the council which can only take place following sanction by the city manager.

Sinn Féin Councillor Jonathan O’Brien expressed concerns about the level of bad debt write offs.

“It is very worrying in these harsh economic times that the council, which is already struggling with reduced funds, to simply write off such a significant amount,” he said.

“I will be seeking more details about why this amount has been written off, and what steps have been taken to date to recover it.”

News of the hole in the city’s finances caused by unpaid rates follows a recent request to give under-pressure businesses a 12-month break from rate payments.

Fine Gael Councillor Laura McGonigle said rates are one of the biggest single expenditures for any business.

“I would appeal to the manager that an arrangement could be arrived at where such businesses can defer their rates for a period of 12 months,” she said.

“Ultimately, no business in Cork should be forced to close its doors because of rate arrears. In the same vain, businesses shouldn’t be forced to reduce employee hours or let staff go because of their liability to City Hall.”

But city manager Joe Gavin ruled it out. “It is the largest single source of income for the council and is absolutely necessary to fund the level of services provided for in the expenditure side of the city’s budget,” he said.

“In every year, there are some business concerns who have financial difficulties. The city council has always sought to agree a payment schedule in these instances which would meet both the needs of the business concerns and the requirement of the city council to secure funds to meet the cost of providing services.”