South Dublin County Council

Annual Budget 2011

Manager's Report

To: The Mayor and Members of South Dublin County Council

Annual Revenue Budget 2011

Introduction

The Minister for the Environment, Heritage and Local Government prescribed the periods for the holding of the statutory budget meetings of Local Authorities in Circular Fin 09/2010. The prescribed period for County Councils is 24 November, 2010 to 13 January, 2011. As the first Budget Meeting is 21 December, 2010 the final day for South Dublin County Council to consider and adopt the budget and determine the rate on valuation is accordingly 10 January, 2011.

The Corporate Policy Group was consulted and advised about the draft budget.

Financial Context

The draft Budget provides for Revenue expenditure of €249,016,300 during 2011. This contrasts with a revised budget of €255,670,600 for 2010. While income has been provided gross (i.e. reductions have not been made for possible bad debt or in the case of commercial rates for loss of rates income resulting from vacant properties) expenditure is inclusive of provisions for both bad debt and rates foregone on vacant properties. These provisions total €17,160,000 for 2011 and contrast with provisions of €21,972,000 for the revised 2010 budget.

Local Government Fund

The Local Government Fund General Purpose Grant allocation to South Dublin for 2011 is €21,709,971. In the budget tables the local government fund grant is shown net of retained pension levy deductions of €3,600,000. The allocation represents a reduction of 10.62% on the 2010 allocation.

Non Principal Private Residence (NPPR) Charge

This €200 charge was introduced by the Department of the Environment, Heritage and Local Government under The Local Government (Charges) Act 2009 and is expected to provide South Dublin with an income of €2,144,000 in 2011. Property owners are obliged to register and pay this charge by 30th June 2011 and significant penalties will accrue each month if left unpaid. The charge is collected by a bureau service set up by local authorities to operate as a shared service initiative.

The following table reflects proposed expenditure by division for 2011 and contrasts and compares this with the anticipated out-turn for 2010 and the adopted budget 2010.
Division	Budget 2011	Budget 2010	Revenue Budget 2010	Increas/Decrease 2011/2010	Increase/Decrease R2010/2010
Housing and Building	51,076,300	52,569,800	48,056,300	-1,493,500	-4,513,500
Road Transport & Safety	27,941,700	30,755,100	27,987,200	-2,813,400	-2,767,900
Water Services	34,119,800	34,644,800	35,881,900	-525,000	1,237,100
Development Management	13,294,400	13,429,300	13,156,700	-134,900	-272,600
Environmental Services	60,820,000	66,271,200	65,938,600	-5,451,200	-332,600
Recreation and Amenity	32,069,000	33,142,800	31,508,700	-1,073,800	-1,634,100
Agriculture, Education, Health & Welfare	7,220,900	5,638,600	7,051,200	1,582,300	1,412,600
Miscellaneous Services	22,474,200	18,273,400	26,089,900	4,200,800	7,816,500
Grand Total	249,016,300	254,725,000	255,670,500	-5,708,700	945,500

The Council has been conscious throughout 2010 of the difficulties that businesses are facing in the current economic situation and has advised the Corporate Policy Group that the assumptions in the draft budget include a proposal to reduce the general annual rate on valuation (ARV) by 0.6% in the 2011 Budget. This has been possible as a result of an expansion in the commercial rates base in South Dublin during 2010 which will deliver additional income from commercial rates in 2011. The proposed rates multiplier of 0.166 for 2011 is 0.001 (0.6%) less than the 2010 multiplier of 0.167. Over the next few years we must ensure that the expansion of the rates base is reflected in a reduction in the rate multiplier. This methodology will not compromise existing service levels.

It is critically important that the decisions we take are aimed at maximising the benefits this county has to support business competitiveness. The burden of local services falling on business is in my view unbalanced. In order to reduce this burden while maintaining essential services and improving outcomes for residents, we must focus on activity that can:

Assist the IDA to make this county more attractive for Foreign Direct Investment.
Support the winning bid for “Your Country Your Call” known as the “Data Ireland Strategy” the promoters of the bid named Grange Castle as its preferred location.
Focus efforts to expand our Rate Base.
Develop a new model in partnership with the South Dublin Chamber to ensure business survival.
Take innovative steps to encourage activity in vacant commercial property through a “Creative Village Concept”.
Position ourselves to use the “National Year of Craft” to generate activity.
Work with our partner agencies to continue progress with the Innovation Enterprise Zone aimed at unemployed, well educated graduates.
Embrace the opportunities of the Government Placement Scheme to enhance opportunities for people who are unemployed to assist them in gaining experience.
Further develop the innovative scheme delivered by South Dublin County Council and FAS which involves work based training.

While the overall outlook is challenging, some of the National indicators published in the budget are worth noting as they directly impact on how priorities are managed locally. In particular I would point out the following:-

The National Budget statement suggests that economic activity in the country has stabilised:

GDP is expected to record a small increase this year
Exports to the end of June were up 7% in real terms
Manufacturing output in quarter three is up 12%
Export orders remained strong in October 2010
The live register has fallen for the third month in a row
Redundancies in September to November are 30% lower than in 2009
The budget deficit stabilised at 11.6% of GDP
Tax revenues are ahead of target

There is a particular emphasis nationally on supporting businesses, economic activity and jobs and a series of steps were taken to consolidate that position:

No change to Ireland’s corporation tax rate.
Employment and Investment Incentive to boost job creation by SMEs.
Extend the 3-year corporation tax exemption for start-up companies.
Extend the accelerated Capital Allowance Scheme for Energy Efficient Equipment for a further three years.
Fundamental reform of Stamp Duty on homes to stimulate the property market:
- A flat 1% rate for all transactions of residential property valued up to €1Million with 2% applying to amounts above €1Million
- Abolishing all existing reliefs and exemptions for Stamp Duty on residential property.
New tax incentive to support employment and improve energy efficiency in homes
Reduction in the air travel tax to €3 from March 2011 to boost tourism.

Incentives

Energy Efficient Homes

New incentive in addition to SEI grant
Standard rate tax relief – expenditure up to €10K
Capital allowances on Energy Efficient Equipment extended to 2014

These national indicators are reflected in the way in which priorities are developed within the county. This Council is committed to the strategic development of the County both in terms of physical development and quality of life issues. This of course involves the provision of transport infrastructure and services but also the strategic planning that attracts and delivers commercial opportunities. No less important is the community infrastructure that has also been delivered and managed including swimming pools, parks, community centres, libraries etc. which are vital to a good quality of life.

In recent years South Dublin County Council has embraced the modernisation programme and changed working arrangements so that staff work within an interdepartmental and multi-functional framework in a manner that supports the delivery of outcomes through the life cycle approach set out in “Towards 2016”.

Children and Young People
People of Working Age
Older People
People with Disabilities

Considerable progress has been made on this Quality of Life Agenda in a number of areas including the South Dublin Children Services Committee. We have also continued to progress the Social Inclusion Agenda.

During 2011 it is intended to focus additional effort on achieving positive outcomes for people who find themselves unemployed, the County Development Board has a key role in co-ordinating Inter Agency Initiatives. In order to stimulate this initiative the budget provides a fund of €90,000 to develop a support structure for existing businesses that will compliment the work of the Enterprise Boards, Partnerships and other bodies involved in the labour activation market.

The Council has an active project examining the “Cost of Doing Business”. Some progress is being made in the area of Energy Management. Work is close to completion on the establishment of a Carbon Base-line for the county. This is a complex calculation and we have made strides and developed methodologies in the areas of transport, housing and commercial energy which CODEMA (the Regional Energy Agency) now intend to adopt for future work in the Dublin authorities. When the base-line is calculated, work will commence on the preparation of the Sustainable Energy Action Plan (SEAP) for the county. The current work is a benchmarking exercise, the Action Plan will identify the biggest energy users/carbon producers, provide a register of opportunities following which a reduction programme can commence. The base-line figure for the county should be completed in late January/early February.

South Dublin is part of an EU project application along with other European municipalities to initiate research for the new Intelligent Energy Europe Programme. The proposal addresses the potential of local authorities to lead co-ordinated energy saving/carbon reduction. If the project is selected the EU will provide funding for staff and research. Successful projects will be announced in December 2010.

The Elected Members have agreed to enrol South Dublin in the Covenant of Mayors Group. This will commence in the second quarter of 2011 and will act as a focus for the Sustainable Energy Action Plan and ongoing actions.

TALLAGHT PROJECT - Meetings with Tallaght stakeholders are ongoing to develop the District Heating/Energy Savings Conservation Company (ESCO) in the town centre. The work will involve calculation of base-line figures and from that, a register of opportunities for energy saving/sharing and carbon reduction will be compiled.

This project is also being developed with a view to an SEAI bid to designate Tallaght as a Sustainable Energy Community with potential benefits of mentoring/training, staff cost recoupment and an overall ‘brand’. South Dublin Chamber has committed to its involvement in the ongoing Development of Tallaght Programme.

Resources & Staffing Context

A number of initiatives to reduce costs have been instigated by this local authority since 2008, including a 10% reduction in staff between mid-2008 and 2010 (as a result of the public service moratorium), and a further significant decline in staffing levels is projected by spring 2012. On the basis of the staff age profile we could see staff numbers decline by a further 10-15% within the next 15 months.

The projected cost of payroll for 2010 shows a decrease of €6.3 million on 2009, reflecting the decrease in numbers as well as a reduction of overtime levels. The reduction in numbers over the last two years has resulted in increased productivity, revised work practices and other major change initiatives that are essential to mitigate against any impact on priority frontline services as a result of staff reductions and limited resources. More must be achieved by fewer staff with smaller budgets.

Management and staff are working together to achieve a more effective and citizen focused service. Change initiatives such as the use of interconnected sources of data and technologies have altered fundamentally the way in which work is carried out in this Council. The systems we use now give us better capabilities to manage, track and monitor work. Management as a matter of routine access systems to establish volumes of work delivered, volumes outstanding, levels of responses to customers and can identify and address gaps or deficits as they arise. The information we have access to is multidimensional and interconnected enabling the majority of requests for service to be answered at the first point of contact. We are continuously adding to the functionality of existing systems and our spatial data mapping project will further tie together relevant information into a unified portal with a map based interface.

This Council has always been proactive in engaging in synergising opportunities. Interagency working is one such example and much has been achieved through this type of engagement.

Staff resources are being continually refocused in a practical way throughout the organisation in order to maintain levels of service to customers. Additionally innovations in service delivery and choices for the customer are being introduced. The ASH Project, (Applicant Sourced Homes), Choice Based Lettings, the setting up of the Social Housing Procurement Unit and the introduction of the Advanced Credit System in Waste are good examples of how we are transforming the way we work.

The conclusion of the Local Sectoral Action Plan under the terms of the Public Service Agreement [Croke Park Agreement] 2010 - 2014 sets out under the following headings the changes we propose to take to generate further cost savings, increase productivity and flexibility and in general to ensure continued delivery of services in the context of reduced staff levels:

Restructuring
Shared Services
Procurement
e-Government
Redeployment
Productivity and Performance

The South Dublin Local Action Plan provides us with both a challenge and an opportunity. We will work with the various staff representative bodies and deliver significant efficiencies and cost savings through implementing the actions identified in the plan. There is the potential to reconfigure the way we deliver the frontline service and a top priority is to move to a multifunctional co-ordinated frontline service delivering roads, parks and cleansing functions seamlessly for the public realm. Other actions contained in the plan will address outdated work practices, reconfiguration of roles, best practice for procurement, as well as implementing national level actions as required.

As set out in the recommendations of the Local Government Efficiency Review, service delivery will be changed to maximise efficiencies and savings will be achieved through the increased use of shared services, aggregated procurement and online transactions, new work practices and flexibility in working arrangements.

Conclusion

I would like to acknowledge the contribution made by former Mayor Duff and thank Mayor Maloney and members of the Council for their valuable contribution during 2010.

The Council faced extreme weather conditions in the early part of the year and again in recent weeks. I would like to acknowledge the efforts of all staff in dealing with the impact of the weather on our roads, footpaths and water supplies. In particular I would like to acknowledge the cooperation of a number of departments in tackling the issues arising from these exceptional circumstances in such a collaborative manner.

The preparation of the Annual Budget is a detailed and demanding task so I would like to thank all of the management team and staff who worked with me on this budget.

I would like to thank in particular Clodagh Henehan, Patricia McLoughlin and Sinead Dunne and their staff who managed and coordinated the process.

I recommend the adoption of the Budget for 2011 as presented and the determination of the general annual rate on valuation of 0.166.

Joe Horan
County Manager