AILG Training Seminar for
Elected Members
Local Authority Finance &
Budgets
Tom Moylan
Local Authority Finance & Budgets - Key messages for Elected Members
1.
2.
3.
4.
5.
Changes to Commercial Rates for 2015
The Budget Documents – A guide for the Elected Member
Determination of Annual Rate on Valuation (ARV)
Annual Financial Statement (AFS)
Schedule of Municipal District Works
Note:

It should be noted that the umbrella term “municipal district” includes
all other variations of this type of formation as set out in Part 3A
section 22A of the Local Government Act 2001 (as inserted by the
Local Government Reform Act 2014) e.g. metropolitan or borough
districts.

In the case where a local authority does not have municipal districts,
the requirements relating to municipal districts will therefore not
apply, e.g. Galway City Council.
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Commercial rates – key messages for elected members
Significant contribution to the funding of local government – Rates account
for between 9% and 61% of total funding for local services at individual local
authority level, averaging over 35% nationally
Elected members are legally required to adopt an Annual Rate on Valuation
(ARV) at the annual budget meeting. This ARV is applied to the valuation of
each property as determined by the Valuation Office to determine the
amount of rates that each individual rate payer is required to pay.
Local Government Reform Act 2014 dissolved a number of rating authorities
and provided that each county, city or city and county council will now
constitute a single rating authority for the whole of that area. As a result, the
differing ARVs that have prevailed across former rating authority areas (i.e.
former town councils etc.) must be harmonised.
The 2014 Act provided a mechanism for the harmonisation of ARVs within
counties over a ten year period with the use of a Base Year Adjustment (BYA).
The Act now requires that each local authority (that now encompasses former
rating authorities where differing ARVs applied) must, in addition to the ARV,
adopt a Base Year Adjustment for each former rating authority area.

Commercial rates – key messages for elected members

Ten year adjustment period beings in 2015
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
In 2015, the BYA is calculated as the difference between the 2014 ARV and
the new 2015 ARV – neutralises any increase/ decrease in rates due in 2015
that would otherwise occur as a result of the ARV struck by the members for
the amalgamated authority as a whole, i.e. rate payers will pay no more or no
less in 2015 than they did in 2014: arithmetic exercise in 2015
From 2016 on, members continue to adopt an ARV; however, the ARV cannot
be increased until BYA has been eliminated. Members should also adopt a
BYA for each former rating authority - each BYA must be reduced annually
to become closer to zero until it is eliminated
2014 Act requires that there is consultation with MD members in the area of
the former rating authority (s29(4)) prior to the adoption of the BYA

Commercial rates – key messages for elected members
Vacancy refunds
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Legislation determines that owners of vacant premises are entitled to a refund of rates if their
property was vacant on the date of the making of the rate.
The Local Government Act 1946 provides that the owner of vacant premises is entitled to a
100% refund in most local authority areas. Separate legislation governs refunds in the cities of
Dublin, Limerick and Cork, where the same criteria for refunds apply but only 50% of the rates
paid is refundable.
Local Government Reform Act 2014 provides local authorities with the discretion to vary the
rate of refund (0-100%) that applies in individual local electoral areas.
The Local Government (Financial and Audit Procedures) Regulations 2014 provide that the
decision to alter the rate of refund should be taken at the annual budget meeting and that the
rate of refund decided in respect of the relevant local electoral area shall apply to eligible
persons for the year to which the budget relates. The absence of a decision to vary the refund
means that the existing legislative provisions regarding the rate of refunds apply (either 100%
or 50% as set out above).

Commercial rates – key messages for elected members
Summary of rates decisions to be taken at the annual budget meeting

In 2015, Councils will be required to  adopt ARV for the county/ city as a whole (this cannot be increased until
harmonisation has been achieved); and
 decide if they want to alter vacancy refunds available in 2015 and if so, what rate and
for which LEAs.

From 2016, Councils will be required to –
 adopt ARV for the county/ city as a whole (this cannot be greater that the ARV
adopted for 2015 until harmonisation has been achieved);
 reduce the BYA that applies in each former rating authority area; and
 decide if they want to alter vacancy refunds available for each specific year and if so,
what rate and for which LEAs.

There are six statutory tables included in the budget documents
(Tables A-F).
1)Table A –
2)Table B –
3)Table C 4)Table D –
5)Table E –
6)Table F -
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
Calculation of Annual Rate on Valuation Including BYA
Detailed Expenditure & Income
Rates information including BYA (updated format for 2015)
Analysis of Budget Income from Goods & Services
Analysis of Budget Income from Grants & Subsidies
Detailed Expenditure and Income by Division
New Structure to Budget Format/Documents was introduced in 2009
with a move to a service costing based structure (Service Support
Costs – Full cost disclosure for delivery of each service)
Services and Sub Services are rolled up into 8 Division Groups
Table B & F – Detailed Expenditure & Income

8 No. Divisions (A-H) & Central Management Charge Division
1.
Division A – Housing & Building
2.
Division B – Road Transport and Safety
3.
Division C – Water Services
4.
Division D – Development Management
5.
Division E – Environmental Services
6.
Division F – Recreation and Amenity
7.
Division G – Agriculture, Education, Health & Welfare
8.
Division H – Miscellaneous
9.
Division J – Central Management Charges
Division
Description
Current Expenditure
Current Income
A
Housing &
Building
LA Housing Repairs & Maintenance Costs
Traveller Accommodation
Estate Management
Assistance to persons housing themselves (Housing
Loans & Grants)
RAS Programme
Loan Charges
Service Support Costs
- Direct Salaries & Staff Costs
- Direct O/Heads
- Central Management Charge
- Indirect O/Heads
Housing Rents
Recoupable Salaries
Recoupable Grants
RAS Payments
Recoupable
Payments
B
Road Transport
& Safety
Road Upkeep & Maintenance Costs
Road/Footpath Improvements
Public Lighting
Road Safety & Traffic Management & Control
Loan Charges
Service Support Costs
Central Management Charge
Road Grants – DOE Fund
Parking Fees
Road Opening Fees
Hackney Licences
Recoupable Salaries
/Grants
C
Water Services
Public water & sewerage supply – Service Level
agreement with Irish Water
Public Conveniences
Group Water Schemes
Service Support Costs
Central Management Charge
Irish Water Income –
Service level agreement
Grants – DOE Fund
Recoupable
Grants/Salaries
Divisio
n
Description
Current Expenditure
Current Income
D
Development
Management
Planning Control & Enforcement
Taking in Charge of Estates
Urban/Village Renewal
Tidy Towns
Community & Enterprise
Tourism Development
Local Enterprise Offices
Local Community Development Committee
Service Support Costs
Central Management Charge
Planning App. Fees
Licence Fees
Urban Renewals Grants
Recoupable
Grants/Salaries
F
Recreation &
Amenity
Op. Costs – Recreational Centres , Libraries , Public
Amenities
Community, Sport & Recreation Development
Maintenance of Parks / Open Spaces
Arts/Cultural Centres
Arts Programme
Heritage Service
Service Support Costs
Central Management Charge
Charges – Recreation
Centres Libraries &
Public Amenities
Recoupable
Grants/Salaries
G
Agriculture,
Education,
Health &
Welfare
Land Drainage
River Cleaning
Veterinary Service
Service Support Costs
Central Management Charge
Recoupable Salaries
/Grants
Divisio
n
Description
Current Expenditure
Current Income
H
Miscellaneous
Financial Management
Costs for Collection of Rates
Legal, Printing & Stationery
Irrecoverable Rates
Elections & Audit fees
Admin of Justice/Consumer
- Coroners Fees
Food Safety
Councillors & SPC Costs
Motor Tax Operation
Service Support Costs
Central Management Charge
Sale of Election Registers
Licences (Dog Licences)
Recoupable
Grants/Salaries – Motor
Tax
J
Central
Management
Charge
Corporate Building Costs
Corporate Services
Information Technology
Print/Post Room
Human Resources & Finance
Function
Pensions
District Offices
Table F
Table F
Division A - HOUSING AND BUILDING - Pg 1
Expenditure by Service and Sub-Service
Code
Adopted by
Council
Division A - HOUSING AND BUILDING Pg 2
Expenditure by Service and Sub-Service
Adopted
by Council
€
Code
€
1,567,725
A0501
Homeless Grants Other Bodies
186,000
A0101
Maintenance of LA Housing Units
A0102
Maintenance of Traveller Accommodation Units
60,138
A0502
Homeless Service
111,744
A0103
Traveller Accommodation Management
168,549
A0599
Service Support Costs
22,844
A0104
Estate Maintenance
A0199
Service Support Costs
Administration of Homeless Service
320,588
85,748
Maintenance/Improvement of LA Housing Units
734,715
2,531,127
A0201
Assessment of Housing Needs, Allocs. & Trans.
57,500
A0601
Technical and Administrative Support
A0299
Service Support Costs
357,915
A0602
Loan Charges
Housing Assessment, Allocation and Transfer
415,415
A0699
Service Support Costs
A0301
Debt Management & Rent Assessment
176,344
A0399
Service Support Costs
Housing Rent and Tenant Purchase
Administration
298,179
A0401
Housing Estate Management
55,000
A0402
Tenancy Management
A0403
A0499
1,535,906
341,937
Support to Housing Capital Prog.
1,963,591
A0701
RAS Operations
2,765,500
9,400
A0702
Long Term Leasing
400,540
Social and Community Housing Service
10,000
A0799
RAS Service Support Costs
316,398
Service Support Costs
176,969
Housing Community Development Support
251,369
474,523
RAS Programme
3,482,438
Table F
Division A - HOUSING AND BUILDING - Pg 3
Expenditure by Service and Sub-Service
Division A - HOUSING AND BUILDING - Table F - Income
Adopted by
Council
Adopted by
Council
Income by Source
€
€
A0801
Loan Interest and Other Charges
334,476
A0802
Debt Management Housing Loans
A0899
Service Support Costs
198,400
Government Grants & Subsidies
Housing Loans
532,876
Environment, Community and Local
Government
-
A0901
Disabled Persons Grants
1,200,000
A0902
Loan Charges DPG/ERG
16,150
A0903
Essential Repair Grants
A0904
Other Housing Grant Payments
14,000
A0905
Mobility Aids Housing Grants
-
A0999
Service Support Costs
Housing Grants
Total Grants & Subsidies
(a)
6,013,469
-
184,014
1,414,164
Income from Goods and Services
Rents from houses
Housing Loans Interest & Charges
222,054
91,753
3,500
Agency & Recoupable Service
-
Local Authority Contributions
A1199
Service Support Costs
-
Other income
Agency & Recoupable Services
-
Total Goods and Services
11,386,091
4,739,200
Superannuation
Agency Services & Repayable Works
A1101
Service Division A Total - Housing & Building
6,013,469
Total Income
245,180
(b)
5,301,687
c=(a+b)
11,315,156
Financed by Other Income/Credit Balances
Provision for Credit Balance
-
-
Local Government Fund /General Purpose Grant/LPT
16,228,046
16,228,046
Pension Related Deduction
1,108,226
1,108,226
+ / - Base Year Adjustment - Dissolved Rating Authorities
Sub - Total
(B)
-202,862
17,133,410
Net Expenditure to be Financied by Commercial Rates
13,565,244
Amount of Rates to be Levied
13,565,244
C=(A-B)
Net Effective Valuation
General Annual Rate on Valuation
D
228,886
C/D 2015
59.27
General Annual Rate on Valuation - 2014
59.27
% Increase in ARV
0%
Commercial Property with a Ratable Valuation of €100 - 2015 Rates
€100 x 59.27 =
€5,927
Base Year Adjustment 2015 - Former Town Councils
Revised Table C
A
B
C
D
E
F
Annual Rate on
Valuation 2014
Annual Rate on
Valuation 2015
Base Year
Adjustment
Net Effective Valuation
Value of Base Year
Adjustment
Effective ARV 2015
A -B
CxD
€
€
€
Name of County
ABC County Council
59.27
59.27
123,304
-
59.27
Name of Town
Town Council - D
57.68
59.27
-
1.59
58,624
-
93,212
57.68
Town Council - E
57.13
59.27
-
2.14
39,500
-
84,530
57.13
Town Council - F
55.90
59.27
-
3.37
7,458
-
25,120
55.90
-
7.10
228,886
-
202,862
TOTAL
Commercial Property in former town council area D with Ratable Valuation of €100 - 2015 Rates
2015 Valuation
€100 x 59.27
€5,927
BYA Credit
€100 x -1.59
-€159
2015 Rates Due
€5,768
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Annual Financial Statements (AFS) - End of Year Accounts
AFS – Actual Income & Expenditure & Balance Sheet (Details
of all Fixed Assets owned by the Local Authority)
Annual AFS are audited by Local Government Auditor
Local Government Auditor deals with:
•
•
•
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Verification of accounts as shown in AFS
Prevention/Detection of fraud/error
Value for money
AFS & Auditors Reports are submitted to Council Chief
Executive & Audit Committee for consideration and have
authority to seek a meeting with Local Government Auditor.
AFS & Auditors Reports are submitted to members for
approval and Local Government Auditor has authority to
seek a meeting with the elected members to discuss if they
so wish.

Schedule of Municipal District Works – January 2015
 Following the adoption of the budget, a schedule of proposed works in
each municipal district shall be prepared under the direction of the Chief
Executive.
 The schedule of municipal district works shall be considered by the
municipal district members concerned and be adopted by resolution, with
or without amendment .
AILG Training Seminar for Elected Members
Local Authority Finance & Budgets
Questions????