Thursday, May 17, 2012

Chronic and chaotic failure of county and city councils to collect commercial water rates

The latest news about the collection of the Household Charge is that approximately 940,000, or approximately 56% of all active households in the country have paid the charge that fell due on 31st March and 44% have not.

Big Phil Hogan, Minister for the Environment, Community and Local Government has promised the full consequences of the law will follow Household Charge freeloaders, who want others to pay the cost of flushing their toilets and washing their hands.

The average person in Ireland is estimated to use 140M3 of water per year. This compares to an average of between 50M3 and 100M3 in other European countries, all of whom charge for water usage. It is estimated that 17% of the territory of the EU experiences water scarcity, while Ireland has the capacity to support industries in certain locations that are relatively water-intensive in their usage profile. An estimated 77% of Irish households are connected to public mains while the balance are connected to group water schemes. Sixty seven per cent of houses are served by public waste water infrastructure while the balance (418,000 homes) are dependent on septic tanks or other treatment sources.

During the past decade the State has invested in the region of €5.8 billion.  Each county is the recipient of substantial investment in water services. Co Cork has been the largest recipient (€485 million) and Leitrim, its population of 32,100 and a 12-year supply of vacant houses, has been the recipient of over €50 million in water investment.

The operating cost of providing the 1,000 water and sewerage services in the country costs approximately €60 million each month and commercial water rates ought to yield €199.7 million per annum towards this.

At the start of 2010 arrears of commercial water rates amounted to €151.7 million, a sum equivalent to 75% of what is billed in a full year.

The rate charged for commercial water is not regulated but ranges from €1.75 per M3 in Kildare to €3.04 per M3 in Wicklow.

Kildare had a revenue deficit of €3.9 million at the end of 2010. It collected 55% of the commercial rates billed that year and ended the year with arrears €460,000 higher at the end of the year notwithstanding the writing of arrears of €450,000 at the beginning 2010.

Wicklow had a revenue deficit of over €2 million at the end of 2010. It collected only 41% of the commercial rates billed in 2010 and ended the year with arrears of €2.5 million, some €300,000 less than at the start of 2010 having written off €166,727.

Commercial water charges in Ireland are competitive when compared when large population centres in Ireland are compared with large population centres in Europe.  But there is a lack of transparency as to how water is priced in Ireland for commercial use.

The best performing councils with respect to collecting commercial water rates accounted for 16% of the arrears (€25 million) and were the recipients of 22% of the capital investment in the past decade (€1.3 billion).  The include, in order of efficiency:

 

COUNCIL

ARREARS,
Jan 2010

% 2010 Annual Commercial Water Rates

CAPITAL
INVESTMENT 2000+

Louth

€1,229,063

18.1%

€58 M

South Tipperary

€614,978

21.2%

€95 M

Waterford

€459,742

23.2%

€182 M

Limerick

€2,085,419

28.1%

€113 M

Cork City

€1,636.204

28.5%

€56 M

Waterford City

€1,380,934

29.4%

€89 M

Kerry

€2,572,154

33.7%

€121 M

Limerick City

€3,016,409

42.3%

€58 M

North Tipperary

€1,517,791

46.6%

€118 M

Fingal

€7,195,551

48.3%

€224 M

Kilkenny

€2,345,612

49.4%

€127 M

Monaghan

€964,533

52.4%

€75 M

€25,018,390

 

€1,321 M

 

The worst performing councils at collecting commercial water rates accounted for arrears in excess of €126 million but are recipients of €4.5 billion in capital investment:

 

COUNCIL

ARREARS
Jan 2010

% 2010
Annual Commercial Water Rates

CAPITAL INVESTMENT,
2000+

Wexford

€11,368,930

328%

€178 M

Wicklow

€2,816,501

175%

€247 M

Carlow

€831,676

148%

€103 M

Donegal

€10,808,845

135%

€352 M

Meath

€5,088,552

134%

€295 M

Dun Laoghaire-Rathdown

€9,019,916

130%

€169 M

South Dublin

€8,763,741

116%

€108 M

Sligo

€3,364,804

112%

€89 M

Leitrim

€864,453

108%

€51 M

Mayo

€5,948,122

101%

€205 M

Galway

€4,542,483

96%

€464 M

Offaly

€2,360,511

90%

€131 M

Cavan

€1,903,905

82%

€107 M

Laois

€1,713,232

79%

€134 M

Galway City

€3,173,645

77%

€114 M

Dublin City

€21,373,541

77%

€418 M

Clare

€6,511,277

75%

€236 M

Westmeath

€2,640,106

74%

€218 M

Cork

€14,437,,859

73%

€485 M

Longford

€1,320,871

72%

€75 M

Kildare

€6,303,713

66%

€207 M

Roscommon

€1,571,007

63%

€138 M

€126,727,690

 

€4,533 M

 

The average cost of a cubic metre of water for commercial use in Ireland is €2.08>

The following table compares the cost charged by the least efficient providers and the most efficient providers:

 

LEAST EFFICIENT €/  M3 MOST EFFICIENT €/ M3
Wexford €2.71 Louth €1.55
Wicklow €2.45 South Tipperary €2.70
Carlow €2.30 Waterford €2.12
Donegal €2.41 Limerick €2.60
Meath €2.30 Cork City €2.30
Dun Laoghaire-Rathdown €2.24 Waterford City €1.53
Sligo €2.07 Kerry €1.79

 

Apart from the non-payment of commercial water rates there is a huge issue about the inability to accurately account for water in Ireland and some of this arises from massive leakages in the infrastructure. It is estimated that 43% of treated potable water in major population centres is unaccounted for and lost before reaching designated users.

The provision of water and the treatment of waste water by 34 different local authorities impedes the development of an effective and coordinated water service and the outbreak of cryptosporidium in Galway City in 2007 did little to enhance public confidence.  Added to that is the gross incompetence of councils to collect lawful debt and you have the makings of a nightmare gridlock.

The immediate consequence of this is that the 940,000 householders who paid the Household Charge are also paying a further €96 million in other taxes to compensate for the parasites and freeloaders who do not pay commercial rates.

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