Our facts stand up despite criticism

ON MONDAY evening Waterford City’s manager, Michael Walsh, suspended the council meeting to address an article which had appeared in the Irish Examiner.

The article had reported on the decision by the council to purchase 11 properties in the city centre for €2.2m despite its valuers believing the buildings were worth “considerably less” than half that amount.

Mr Walsh said the article, which was based on the outcome of an statutory audit, made mountains out of molehills.

In a lengthy statement the city manager made a number of points. These have provoked further questions.

Mr Walsh was asked to clarify his comments but said the matter was with the council’s solicitors and he did not wish to comment further at this time.

Mr Walsh told the meeting the council had not overpaid. The evidence he put forward to support this was an assessment by GVA Donal O Buachalla that said the properties were worth €1.75m.

This was the valuation arrived at by the professionals hired by the Holy Ghost Trust, which was selling the properties. It was not the independent advice given to the council.

The valuers engaged by the council, who were not quoted by Mr Walsh, said that because there were existing tenants the properties were worth “considerably less” than €1.1m.

The council will pay €2.2m over 20 years.

Mr Walsh said he rejected “the tenure, content, and implication of the [Irish Examiner] report that this council paid twice what houses are worth”.

The article was an accurate reflection of the comments made by the Local Government Audit Service. It said: “The €2.2m was in excess of a profession valuation obtained by the council which placed a value of €1.145m on the premises with vacant possession and ‘considerably less’ due to the existences of various leases”.

Mr Walsh said there was no decision made by the elected councillors to buy the properties from the Holy Ghost Trust.

He also said a decision would have required a proposer and a seconder at a council meeting.

A unanimous decision was made, at a council meeting, on Mr Walsh’s proposal to buy the properties. There is a record of a proposer and a seconder. The city council minutes for Oct 2010 are the record.

According to these minutes, Mr Walsh suspended standing orders and brought two proposals to councillors.

The first part was to develop a framework for the Viking Triangle cultural area and the second part was acquisition of properties from the Holy Ghost Trust.

A discussion took place on finance for the plan and the impact on existing tenants. The details of this debate was not disclosed as the manager asked for the matter to be dealt in private.

A proposal was tabled to back the manager’s plans for the Triangle and the Holy Ghost properties. This was proposed by Cllr Tom Cunnigham and seconded by Cllr Jack Walsh.

It was passed unanimously.

Mr Walsh said he particularly regretted that the article on the Holy Ghost deal inferred criticism on the four city councillors who were connected to the trust.

He said there was no requirement for councillors to declare an interest or absent themselves for discussions unless they had a pecuniary or beneficial interest in an issue.

The Local Government Act 2001 says when and where a councillor should disclose an interest. It states that a beneficial interest includes any situation whereby a councillor, or somebody related to them, is a trustee of a trust that is dealing with the council.

Three of the councillors who heard Mr Walsh’s proposals to buy the properties were trustees of the body selling the sites and one councillor’s father was also a trustee.

The article carried a statement from the Holy Ghost Trust which said that the trustees had no role in the negotiations and that all sides were aware of the connections.

Mr Walsh said €2.2m represented value for money as it would be staggered over 20 years at an effective interest rate of 5%-6%.

He said “this is the same as somebody adding up all their mortgage payments over a 20 year period and suggesting that was the price they paid for their house”.

The purchase of the properties on the Quay in Waterford was not arranged by way of a mortgage and there was no suggestion in the auditor’s report that there was an interest rate.

Under the laws governing local authorities borrowing in any capacity is a reserve function, this means only elected councillors can make that decision and not officials.

Mr Walsh said the decision to buy the 11 properties was an executive function, something he could do without a vote.

An interest rate would only apply if there was a lease purchase or mortgage agreement set up with the Holy Ghost Trust.

Mr Walsh said the article incorrectly described the properties as being houses.

Mr Walsh said there were two houses and nine commercial properties. This is accepted.

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