Draft budget identifies 'bad debt'

Draft budget identifies 'bad debt'

Draft budget identifies 'bad debt'

The council's 2011 draft revenue budget includes a provision of 3.2 million euro for irrecoverable rates, about 15 per cent of next year's rate warrant total.

In his budget report, Garry Martin, council head of finance and director of emergency service, reported that the inclusion is in effect a provision for "bad and doubtful debts".

He said that rates may prove irrecoverable for a number of reasons, though most irrecoverable rates stem from properties being vacant and for lease, or reverting to domestic use. He said there is an obligation on the council to deem amounts owed under those circumstances as irrecoverable, and to apply a write-off.

The finance chief also said that while the council will pursue all commercial rate debtors for payment of amounts due, the council will also continue to facilitate all forms of payment "and will seek at all times to help ratepayers obtain satisfactory payment schedules".

Mr. Martin also said that the council "would like to acknowledge those ratepayers, who despite these challenging financial times have continued to fulfil their obligations".

The draft revenue budget also reported a collection rate of 88 percent for water charges, a figure that Mr. Martin said was "well ahead of the current collection rate for bills issued and represents a major work agenda."

The provision for bad and doubtful debts in this area will be retained at 950,000 euro for 2011, representing about 12 percent of the anticipated income of 8.1 million euro, he said.

The council is examining the entire management of income collection and Mr. Martin said in his report that it will be necessary to "vigorously enforce collection through legal and other means", including disconnection or restriction of supply in cases where no mutual agreement can be reached between the council and debtors.

County Manager Seamus Neely said the budget was dependent on maintaining, "and in many cases improving", council levels of income collection. In the manager's report that accompanied the council's 2011 draft revenue budget, Mr. Neely said that to achieve those levels it was deemed necessary to assign a dedicated member of staff to oversee debt management from within the finance directorate.

The county manager said that the position had been signalled in the council's 2010 revenue budget. Since then, unions have been advised of the council's intentions, and arrangements are on course to have the position in place from early 2011. That initiative has been estimated to be worth 1 million euro to the 2011 budget, Mr. Neely said.