COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL

south dublin county council crest

MEETING OF SOUTH DUBLIN COUNTY COUNCIL

Monday, March 12, 2012

QUESTION NO. 5

QUESTION: Councillor E. Higgins

To ask the Manager to provide a detailed report on any arrears owing to the council from unpaid development levies?

REPLY:

In the context of the current national economic climate SDCC, to pursue outstanding development contributions in a more effective way, has categorised developments on which there are arrears as follows;

1.                         Completed and Occupied

2.                         Completed & Vacant

3.                         Under Construction

4.                         Development Stopped

5.                         Development Not Commenced

6.                        Incomplete

This categorization has been possible due to re-orientation of work practices etc within the Planning Dept to enable re-deployment to the area of arrears analysis and collection, in particular the assignment of a dedicated inspectorate as required. The report below outlines how current book balances are apportioned to these categories based on analysis;

                                                            Residential Cases Value
CompltdOccupied 54 €1,876,087.36
CompltdVacant 26 €5,098,955.46
Incomplete 4 €431,057.62
Not Commenced 13 €693,281.57
Stopped 14 €3,326,461.87
Under Construction 61 €3,429,987.78
Total Outstanding 172 €14,855,831.66
     
Commercial    
Compltd/occupied 41 €2,969,691.60
Compltd/Vacant 10 €725,962.86
Incomplete 2 €219,045.35
Not Commenced 4 €589,565.31
Stopped 9 €1,681,615.54
Under Construction 12 €396,488.97
Mixed    
CompltdVacant 2 €7,589,632.33
Total Outstanding non res 80 €14,172,001.96
     
Total Outstanding   €29,027,833.62
Bad Debt Provision: (Based on current collection rate)   €16,949,486.11

It should be noted that monetary amounts quoted above are book balances, and that the bad debt provision of almost €17million can relate to matters including developers carrying out works in lieu of financial contributions; credits due for social/affordable housing; development not being completed; development not commencing.

Based on these categorisations different prioritisation is placed on arrears in each category, summarised as below;

  1. Completed and occupied - Take all steps, including legal proceedings, to recover the debt in full.
  2. Completed and vacant – Focus is on securing debt by issuing Enforcement Notices which prevent the sale of property for a period of at least 10 years, without the contributions first being paid. In any event, the Council withholds compliance notices unless payment in full is made and this also results in payment at sale of property.
  3. Incomplete – Debt written off on confirmation of the expiration of permission and monitored for re-commencement which would warrant retention permission.
  4. Not commenced (even though Commencement Notice submitted) - No action ( monitor for development commencing)
  5. Stopped (Commenced but work has ceased) - Examine for action in relation to completed element, and monitor for development recommencing.
  6. Under Construction - Issue invoices and follow normal collection procedures as development progresses. This may include preventing connection to water services where possible in cases where development contributions are unpaid and this has also proven effective in obtaining income through installment agreements.

There is currently a balance of just over €29m (comparable figure end Aug 2010 was €36.7m) in respect of outstanding development contributions relating to approximately 250 separate developments, however these developments range in scale from housing estates and large commercial units to an increasing number of domestic extensions, with over 40 of the above cases being of that scale.

In all cases the Council has cognizance of the expiration of the statutory period for the taking of enforcement action and in cases where development has occurred and the expiration is nearing, a greater priority is accorded to such developments. During 2011 some 58 cases with a value of almost €750,000 were settled as a result of the issue of enforcement warning letters and notices and legal proceedings are currently being prepared for further cases to a value of €410,000 where the developments have been completed and occupied for a number of years but the owners have failed to either discharge all contributions or enter instalment arrangements. 
An increasing number of cases, when pursued are resulting in long term instalment plans. It is felt that this is a reasonable approach to the issue of arrears, particularly given the current economic climate and the ability of debtors to pay. The total number of cases affected by instalments plans is 70 with a value of approximately €7million connected to historic and recent instalment plans.

It should be borne in mind that development contributions are different in character to other debts in that they are tied to both the planning permission and the property. Therefore the Planning Department cannot write off debt until such time as the lifetime of the planning permission has expired and it has been confirmed that the development was not carried out. In the next 2/3 years planning permissions for a significant level of development for which commencement notices were received in the period 2006-2008 will expire and, unless extensions of duration permissions are granted for said developments it is possible that the book balances will reduce arising from an increased level of write offs for developments that will not commence, given continued depressed market conditions.  In this regard, it must also be noted that extensions of time on planning permissions also extends the conditions relating to Development Contributions.

It should be further noted, in light of the current economic climate, that the current Contribution Scheme 2010-2017 is being reviewed among all four Dublin Authorities with the intention of a new scheme being approved later this year.