Blockage in the pipeline for sewerage schemes

Major sewerage schemes for Clare towns, totalling €41.70 million, could be delayed because of a dramatic slump in Clare County Council’s income from development contributions and planning fees.

In 2008, Clare County Council received about €12 million from development contributions but this fell to about €2 million a year later and is expected to only generate about €1 million in 2011.
According to the recent Budget Estimates, the council expects to receive about €220,000 from planning fees this year, which will drop to about €215,000  in 2012.
Councillor PJ Kelly has questioned the council’s ability to pay its statutory contribution towards a number of key capital infrastructure projects such as Phase Two of the Ennis to Clarecastle Sewerage Scheme costing €10.8 million; Kilkee and Kilrush Sewerage Schemes costing €10.2 million and the €20.7 million Shannon Town Sewerage Scheme, which are at the planning stage.
Under the Water Pricing Policy, the council contributes to the capital costs of projects varying from 10% for water conservation to 40% for water projects, 40 to 60% for sewerage schemes and 60% for the Clonlara Service Land Initiative.
County manager Tom Coughlan explained that this contribution is funded mainly from planning contributions and borrowing. Mr Coughlan has acknowledged the council is finding it increasingly difficult to meet the cost of contributing to capital projects.
Councillor Kelly claimed capital projects are effectively an “illusion” if the council is not able to provide its own contribution because of the collapse in income from development levies and planning fees.
He warned that capital projects would be delayed because the council would not be allowed to borrow any more significant sums of money by the Department of the Environment as a result of the recession.
He pointed out the contribution from planning fees would drop again this year as the number of planning applications are down from about 3,000 a few years ago to possibly 800 this year. Because large scale development has practically ground to a halt, he says the council can expect to receive very little planning fees from large developments.
Planning director of services, Nora Kaye confirmed the council expect to generate about €1 million from development contributions in 2011 while €2.1 million is outstanding.
Given the number of developers that have gone into liquidation and receivership, Ms Kaye acknowledged it is difficult to know how much exactly would be realised, as each case will be dealt with individually. She expects many cases would proceed to court with a view to establishing all options for collection of outstanding amounts.
She acknowledged funding major capital projects is an ongoing challenge for all councils and requires a direction from central government by way of new funding mechanisms or approval to borrow monies.
Director of services, Ger Dollard, recalled Mr Coughlan had stated the council could borrow for water services projects and that the 2012 budget makes provision for loan charges on these projects.
“Water services projects are seen as a national priority and that is why borrowing for such projects is permitted. Borrowing has to be dealt with at national level in the context of the EU/IMF agreement.  There is no doubt that the progress on the programme similar to all other programme areas will be slower than anticipated or to the level that would be desirable.
“The low level of income from development levies in the current climate results in a higher loan requirement than would be the case.  The absence of significant income from levies does not prevent a project proceeding,” he explained.
“Development levies are normally payable at the commencement of development. If a development doesn’t go ahead the levy is not payable until the development actually commences. The council has facilitated payment of levies due on a phased basis where circumstances warrant it.
“Liquidations and receiverships do not affect the payment of a levy as it goes with the property. In a liquidation, the liquidator would have to address the matter of any outstanding levies before a sale of the property could be concluded,” he added.