OTHER local authorities are now copying Limerick’s approach to collecting rates arrears because Limerick’s approach is working, Fianna Fail’s Cllr James Collins said this week.
“The message is simple. If you engage with us and pay your rates in full you will get your money back,” he added.
“We are moving in the right direction,” he continued after hearing that rates arrears had dropped by €2.64m in the past year.
The aim was to reduce this further by the end of the year when arrears are expected to be €16.8m, down from the high of €25m in 2014.
The level of collection, councillors were told at Monday’s meeting of Limerick City and County Council, had also improved and was now running at 77%. And the objective is to hit 80% by the end of 2017, finance officer Sean Coughlan explained.
But Mr Coughlan’s figures for the councillors also revealed where the biggest problems lie: with the retail sector and with the smaller rate-payers.
Retail had the most customers in arrears, 904 out of 2081, or 43%.
The next biggest were warehouses, followed by offices and pubs.
Those with the lowest rates to pay were also the most likely to be in arrears.
At the end of 2016, 1,161 customers with a rate warrant under €5000 were in arrears to the tune of over €6m. This was the single biggest number of customers in any category and the single largest sum owed.
This reflects the economic situation, Labour’s Cllr Joe Leddin said, where retail was still struggling to pay wages, overheads and rates.
“Shopping online is having a huge effect,” he declared.
But the figures also showed that the council’s Small and Medium Business Support Scheme is being widely availed of.
The numbers are set to almost double this year, from 991 to 1800.
Under this scheme, businesses with rates bills of between €500 and €21,000 can get relief of 9% if they pay their bill in full.
The council also operates a Tourism Sector Support Scheme for those in the sector whose rates bill is over €21,000. They can get relief of 4%.
“There is an awful difference between using the stick and using the carrot. This is a good example of using the carrot,” Cllr Liam Galvin FG said.
“This is a good news story,” his party colleague Cllr John Sheahan said. “You can’t beat talking”. And he urged anybody with a rates issue to come and talk to the council officials and to try find a solution.
“There has been a shift towards a more progressive rates policy,” Cllr Cian Prendiville, Solidarity, said arguing that the approach “fairly redistributes the burden.
“It hasn’t produced an increase in arrears or in the numbers of big business leaving and that has to be welcomed.”
But Cllr Seamus Browne SF felt the vacancy issue still needed to be addressed while Cllr Daniel Butler FG noted that while there had been some “re-occupation” he would like to see that extended to the towns and villages.
Some arrears, however, are likely to be very difficult to collect, finance officer Sean Coughlan warned.
He estimated that 743 of the 2081 customers in arrears for 2016 fell into that category and they accounted for over €14m of the €19.2m total owed.
However, he also noted that the number of people now paying through direct debit had increased from just over 800 in 2014 to over 1100 last year.
His target for 2017 is to have 1350 customers on direct debit.