City council chief says next week’s budget will be good for business

Ireland West Airport — City council may take an equity share in it.

Ireland West Airport — City council may take an equity share in it.

The chief executive of the Galway City Council has described it as a good news story for local businesses that commercial rates in the city will remain at the same level for the fifth year in a row. Brendan McGrath was speaking as he unveiled the €76,000,000 budget for the city next year.

However, in a proposal that is sure to anger landlords of vacant commercial premises, a new provision is to be included in the budget that they pay rates on vacant properties. The current situation is that landlords of vacant premises receive a 100 per cent rebate on rates. New legislation is giving the city council the authority to determine what the refund amount will be. It has been recommended that the current rebate be reduced from 100 to 50 per cent. City councillors will make a decision on this measure at the special budget meeting next Monday night November 10, which would mean the council would receive an extra €1,000,000 euro in rates income next year. It is at the councillors discretion to pass this legislation but Mr McGrath has warned if it is not passed ‘’councillors will have to help me find €1,000,000 elsewhere.’’ Mr McGrath claimed the reason for the policy change regarding vacant commercial premises is to incentivise landlords to rent the property and not to hold out for higher rent.

Rent reduction for council tenants

There is no proposed increase in parking or any other service charges in the city next year, while as a result of a national differential rent scheme, local authority rents will be equalised in 2015 meaning an overall reduction of rents of €300,000 in the second half of next year and a reduction of €600,000 in 2016. Mr McGrath explained that not all of the city council’s 2,500 tenants will see a rent reduction - it will depend on the rate band they are currently within.

Recruitment embargo to remain in place

The CEO described Galway city council as a ‘’ lean and tight organisation’’. The local authority has reduced its staff numbers by 115 in five years - down from 550 to the current 435, and barring a few exceptions there will not be any recruitment in the immediate future. However it was revealed that funding has been included in the budget to recruit an Irish language officer for the city who will take charge of the development of the council’s services through Irish. The council is hoping that its allocation of 55 Gateway scheme participants will be in place by the end of this year. The scheme which offers welfare recipients 20 hours work a week for an extra payment and the chance to aquire further skills has been on the receiving end of some negative publicity, but MrMcGrath says it has proved to be very beneficial for the council. ‘’It is important to give participants work experience that is valuable to them, meaningful training that will make them more employable, but it’s also important that they provide valuable work for us. There are people who have come in to this organisation under Gateway that have skills and talents that nobody here currently has.’’

Stake in Knock Airport

The budget provides a proposal to take an equity stake in Knock airport to the tune of €50,000. This depends on six other local authorities in Galway county, Mayo, Roscommon, Sligo, Donegal, and Leitrim making a similar contribution. The document outlines that national infrastructure in the mid-western region such as Shannon and Knock airport has a significant impact on Galway city. It has been revealed that Knock airport is aiming to increase its annual visitor numbers from 700,000 to 1,200,000 within the next five years and this would undoubtedly mean a hugely positive economic spin off for Galway.

Brand Galway

A stakeholder executive implementation group is to be established to drive forward economic activity in the city. Key players from State agencies such as Failte Ireland and Solas will be involved in this. A marketing strategy for the city is also to be developed in tandem with the finalisation of the economic strategy. If it is determined to be necessary, a Galway branding initiative will be undertaken. Mr McGrath says it is of vital importance that the ‘’brand’’ is protected and maintained. Meanwhile in something that will be of interest to residents and businesses in Salthill, there is funding in the budget to prepare an economic redevelopment strategy for the area. ‘’Twenty or 30 years ago, Salthill was an economic hive of activity. Many businesses and shoppers have now moved in to the city centre. The regeneration of Salthill is very important.’’

Balancing Act

This year’s budget sees a large reduction on last year’s figure of more than €80,000,000, this is due to the non expenditure on water services which, of course, is now under the remit of Irish Water. Mr McGrath admits it is a tenuous balancing act, but he does not foresee any imminent financial problems for the city.S ‘’It is a statutory obligation that we must present a balanced budget. Under the terms of the bailout, the council is allowed no borrowings, we are allowed an overdraft facility which is mainly used in the earlier part of the year when cash-flow is needed, i.e. before rates payments come in. Our financial management is tight and we will balance in 2015. We actually ended up with a small surplus in 2014.’’


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