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AILG Training Seminar for Elected Members Local Authority Finance & Budgets Tom Moylan
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AILG Training Seminar for Elected Members Local Authority Finance & Budgets Tom Moylan.

Dec 18, 2015

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  • Slide 1
  • AILG Training Seminar for Elected Members Local Authority Finance & Budgets Tom Moylan
  • Slide 2
  • Local Authority Finance & Budgets - Key messages for Elected Members 1.Changes to Commercial Rates for 2015 2.The Budget Documents A guide for the Elected Member 3.Determination of Annual Rate on Valuation (ARV) 4.Annual Financial Statement (AFS) 5.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.
  • Slide 3
  • 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.
  • Slide 4
  • Commercial rates key messages for elected members Ten year adjustment period beings in 2015 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
  • Slide 5
  • Commercial rates key messages for elected members Vacancy refunds 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).
  • Slide 6
  • 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.
  • Slide 7
  • There are six statutory tables included in the budget documents (Tables A-F). 1)Table A Calculation of Annual Rate on Valuation Including BYA 2)Table B Detailed Expenditure & Income 3)Table C - Rates information including BYA (updated format for 2015) 4)Table D Analysis of Budget Income from Goods & Services 5)Table E Analysis of Budget Income from Grants & Subsidies 6)Table F - 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
  • Slide 8
  • 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
  • Slide 9
  • DivisionDescriptionCurrent ExpenditureCurrent Income AHousing & 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 BRoad 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 CWater ServicesPublic 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
  • Slide 10
  • Divisio n DescriptionCurrent ExpenditureCurrent Income DDevelopment 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 FRecreation & 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 GAgriculture, Education, Health & Welfare Land Drainage River Cleaning Veterinary Service Service Support Costs Central Management Charge Recoupable Salaries /Grants
  • Slide 11
  • Divisio n DescriptionCurrent ExpenditureCurrent Income HMiscellaneousFinancial 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 JCentral Management Charge Corporate Building Costs Corporate Services Information Technology Print/Post Room Human Resources & Finance Function Pensions District Offices
  • Slide 12
  • Table FDivision A - HOUSING AND BUILDING - Pg 1 Table FDivision A - HOUSING AND BUILDING - Pg 2 Expenditure by Service and Sub-Service Adopted by Council Expenditure by Service and Sub-Service Adopted by Council Code A0101Maintenance of LA Housing Units 1,567,725A0501Homeless Grants Other Bodies 186,000 A0102Maintenance of Traveller Accommodation Units 60,138A0502Homeless Service 111,744 A0103Traveller Accommodation Management 168,549A0599Service Support Costs 22,844 A0104Estate Maintenance - A0199Service Support Costs 734,715 Administration of Homeless Service 320,588 Maintenance/Improvement of LA Housing Units 2,531,127 A0201Assessment of Housing Needs, Allocs. & Trans. 57,500A0601Technical and Administrative Support 85,748 A0299Service Support Costs 357,915A0602Loan Charges 1,535,906 Housing Assessment, Allocation and Transfer 415,415A0699Service Support Costs 341,937 A0301Debt Management & Rent Assessment 176,344 A0399Service Support Costs 298,179 Support to Housing Capital Prog. 1,963,591 Housing Rent and Tenant Purchase Administration 474,523 A0401Housing Estate Management 55,000A0701RAS Operations 2,765,500 A0402Tenancy Management 9,400A0702Long Term Leasing 400,540 A0403Social and Community Housing Service 10,000A0799RAS Service Support Costs 316,398 A0499Service Support Costs 176,969 Housing Community Development Support 251,369 RAS Programme 3,482,438
  • Slide 13
  • Table FDivision A - HOUSING AND BUILDING - Pg 3 Division A - HOUSING AND BUILDING - Table F - Income Expenditure by Service and Sub-Service Adopted by Council Income by Source Adopted by Council A0801Loan Interest and Other Charges 334,476 A0802Debt Management Housing Loans - A0899Service Support Costs 198,400 Government Grants & Subsidies Housing Loans 532,876 Environment, Community and Local Government6,013,469 A0901Disabled Persons Grants 1,200,000 A0902Loan Charges DPG/ERG 16,150 Total Grants & Subsidies (a)6,013,469 A0903Essential Repair Grants - A0904Other Housing Grant Payments14,000 Income from Goods and Services A0905Mobility Aids Housing Grants - A0999Service Support Costs 184,014 Rents from houses4,739,200 Housing Loans Interest & Charges 222,054 Housing Grants 1,414,164 Superannuation91,753 Agency Services & Repayable Works - A1101Agency & Recoupable Service- Local Authority Contributions3,500 A1199Service Support Costs- Other income245,180 Agency & Recoupable Services- Total Goods and Services (b)5,301,687 Service Division A Total - Housing & Building 11,386,091 Total Income c=(a+b)11,315,156
  • Slide 14
  • Slide 15
  • Financed by Other Income/Credit Balances Provision for Credit Balance - - Local Government Fund /General Purpose Grant/LPT 16,228,046 Pension Related Deduction 1,108,226 + / - Base Year Adjustment - Dissolved Rating Authorities -202,862 Sub - Total (B) 17,133,410 Net Expenditure to be Financied by Commercial Rates 13,565,244 Amount of Rates to be Levied C=(A-B) 13,565,244 Net Effective Valuation D 228,886 General Annual Rate on Valuation C/D 2015 59.27 General Annual Rate on Valuation - 2014 59.27 % Increase in ARV0% Commercial Property with a Ratable Valuation of 100 - 2015 Rates 100 x 59.27 = 5,927
  • Slide 16
  • Revised Table C Base Year Adjustment 2015 - Former Town Councils A BCDE F Annual Rate on Valuation 2014 Annual Rate on Valuation 2015 Base Year AdjustmentNet Effective Valuation Value of Base Year AdjustmentEffective ARV 2015 A -B C x D Name of County ABC County Council59.27 123,304 - 59.27 Name of Town Town Council - D 57.6859.27- 1.59 58,624- 93,212 57.68 Town Council - E 57.1359.27- 2.14 39,500- 84,530 57.13 Town Council - F 55.9059.27- 3.37 7,458- 25,120 55.90 TOTAL - 7.10 228,886- 202,862 Commercial Property in former town council area D with Ratable Valuation of 100 - 2015 Rates 2015 Valuation100 x 59.275,927 BYA Credit100 x -1.59-159 2015 Rates Due5,768
  • Slide 17
  • 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: 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.
  • Slide 18
  • 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.
  • Slide 19
  • AILG Training Seminar for Elected Members L ocal Authority Finance & Budgets Questions????