County and City Managers Association

I welcome Mr. Daniel McLoughlin, chairman, County and City Managers Association, and south Dublin county manager; Ms Jackie Maguire, Meath county manager; Mr. Conn Murray, Limerick city and county manager; and Mr. David O’Connor, Fingal county manager.

Mr. Daniel McLoughlin

I thank the Chairman for giving us the opportunity to address the joint committee.

Reform of the local government sector has been ongoing for some time. With the local government efficiency review group's report, there is a three-dimensional reform programme, the most substantial ever undertaken in the history of local government. The reform programme is three dimensional in nature, dealing as it does with implementation of recommendations contained in the local government efficiency review group's report, the transition to Irish Water and the implementation of Putting People First. Associated with this restructuring there is a substantive local government workforce planning piece being developed.

The County and City Managers Association, CCMA, in conjunction with the Department of the Environment, Community and Local Government, established a project management office headed up by Mr. David O’Connor. Our most recent and second report to the Minister highlighted gross savings of €839 million in the sector between 2008 and 2012. The sector achieved efficiency savings of €259 million between 2008 and 2012, as compared with the original local government efficiency review target of €220 million. Savings of €109 million were made in procurement, with a national procurement office, headed by Kerry County Council, established. Staffing levels have been reduced by almost 25% since 2008, a reduction representing in excess of 9,000 staff.

That is very significant. We are significantly challenged by the Irish Water transition process. We have established a transition office from our own resources, staffed by local authorities as part of the project manager's office. We are in the process of agreeing a 12-year service level agreement, SLA, with Irish Water, keeping local government at the forefront of services delivery. The water metering programme is ongoing and we are assisting in that. We are engaging with Irish Water on a county-by-county basis in the finalisation of the SLA and preparation of annual action plans and awaiting legislation to underpin all that. That is a significant piece of work.

The centrepiece of reform is the Putting People First reform document, which is underpinned by the recent publication of the Local Government Bill 2013. CCMA warmly welcomes the broad provisions in the Bill in so far as they underpin Putting People First. We welcome the establishment of local community development committees and the preparation of five-year plans. That is a very important enabler of local government, working with communities into the future and ensuring the spend in that community area is best targeted, properly integrated and avoids duplication.

We welcome the proposed establishment of a strategic policy committee, SPC, specifically devoted to economic development. That, together with the establishment of local enterprise offices, places local government at the centre of local economic development, where it has always been. The upsizing of the corporate policy group, CPG, is a good initiative. The establishment of the national oversight and audit commission, NOAC, will add further to the governance and credibility of the work of local government. The rebranding of the position of county or city manager as "chief executive" brings a more contemporary focus. We have expressed our reservations about the provision in legislation which allows local elected members to veto that appointment by their inaction. That is a vulnerable position for local councillors to be in.

I thank CCMA for its presentation. I acknowledge the effort and commitment of CCMA and its members throughout the country in the savings they have made, especially in the non-pay area where it was challenging, to say the least. This word "challenging" is overused lately. It is a new word for another description which I will not repeat here.

Regarding the transition in the county and city managers' historical role in water services to the new role that is expected and the configuration of Irish Water, I am worried that there could be a loss to the economy by virtue of the potential for sale. The witnesses mentioned they are part of a body that is involved in the transition process. I am sure that deals with employment issues as well as everything else. I have asked the Minister and Irish Water to place on the table an audit of the existing network throughout the country to put a roadmap in place as to the reinstatement and rectification works required to make that fit for purpose. Then one could be confident of the public paying for that service. That has not been forthcoming yet. Are the witnesses involved in that process? Can we expect at the end of such a process that this information will be in the public domain well in advance of any billing to the public for a service that, as we have seen in recent weeks and months, is not necessarily fit for purpose as it stands?

There will be political accusations about what was done in the past. Over the last number of years there has been huge investment in the infrastructure and networks. That was evident in my county and many others and I can go through it if people want to challenge me. However, that has come to a standstill with the emphasis on the creation of Irish Water and its corporate identity, with no apparent emphasis on the service that the public expects and would appreciate considering it is being asked to pay for that facility. Can the witnesses throw any light on an issue about which I have failed to get any response, an overhaul and programme of works in the offing? If the witnesses did nothing else this morning but enlighten me about that I would be more than happy with their performance.

I welcome the CCMA delegation. I have questions and concerns about Irish Water. For now, the local authorities will have the service level agreements, SLAs. Have they a concern? As a former town and county councillor, I have a concern about this service. While the talk is about providing an integrated network, that would require cross-county connections in places such as Dublin. Some would argue they will not be required, but they will. In the rest of the State that is a debatable point. Are the witnesses concerned that the SLAs may move away from them? Once the meters are installed outside every house they will be under a company called Bord Gáis. Much of that is in the current Government's NewERA document. That poses a significant concern for people. The councillors and county and city managers will be like subcontractors.

We are led to believe, in the Bill and elsewhere, that the property tax will go to councils. In a previous discussion here this morning it was mentioned that there is no new money. If councils raise money through property tax they will receive that much less from central Government in local government funding. Have the managers concerns about the fact that we have started badly this year and next year because the councils will not receive it? Some €240 million has been put into a different bag straight away.

I have a question on the reserve and executive functions. I do not raise this in a combative way. I know there is always a healthy tension in councils. In the council on which I served we had a good relationship with the county manager, Mr. Peter Carey. He was inclined to give councillors as much rope as he could and we gave him a good bit of rope also, not to hang each other but to give as much slack as possible to perform our powers, functions and duties. What functions would CCMA like to see transferred from the executive to the reserve domain of the councillors, if any?

I welcome the delegation. They have a very important contribution to make in local government reform and they are making it. I acknowledge the input of staff in local authorities around the country under the county managers' leadership and how they have adapted to the challenges. I know the pressures on the ground regarding reduced budgets and the implementation of new reforms. It has been a difficult period for local authorities and the huge effort that has gone in around the country has not gone unnoticed. I hope the CCMA delegates will pass that on to their members.

I have a slightly different view on Irish Water than my colleagues. Previously, local authorities depended on funding from central government for various water projects but there are new investment opportunities now for the Irish water system. The county managers will still have a very important role in delivering water services and maintenance through their SLAs. Could they explain further how that works and how they see it working in the future? Councils are working with their hands tied behind their backs regarding budgets for managing water services and assets. They wait for a grant assistance which is sometimes very late and are often managing by firefighting.

I see an opportunity for Irish Water to raise investment and still work with the local authorities and manage the water asset in a more integrated and systematic way. That is possibly a good thing and I would like the witnesses to comment on how this is progressing.

I note with interest the comment regarding the appointment of the new CEOs and the veto element. The witnesses might elaborate a little about their concern in this regard. I presume it is connected to the fact an independent commission will appoint the CEO but it then needs further approval by the elected council. They might let us know if this need for double approval is their main concern and whether we should work to amend this in the legislation.

Some resistance has occurred in debate over the refund rate on vacant properties, an issue we discussed with the Local Authority Managers Association. This rate applies in Dublin, Cork and Limerick. Where a vacant property exists, there is a 50% collectable refund, and my understanding is that some local authorities want that but some resist it. I would like to hear the views of the CCMA. Perhaps it would be a solution to devolve that power to local authorities and let them decide themselves whether they want to collect it or whether it is suitable in their area rather than imposing it on local authorities right across the country as is currently proposed in the Bill. I would like to hear the witnesses' views on whether a devolved function for each local authority might be a solution.

I welcome the county managers, particularly, Mr. Jackie Maguire, with whom I have worked for a number of years, and Mr. Daniel McLoughlin, who started out in Sligo, as well as all of their colleagues.

Irish Water is one of the main topics at the present. There are concerns within local authorities in regard to staffing, in particular, who will be employed by Irish Water and who by the local authorities. The witnesses might comment. I know of people in both of the counties I represent who have worked in the water divisions of local authorities for many years. They are concerned as to where their future lies after 2015, and whether it will be with Irish Water or the local authorities or whether there will be a job for them at all. That is the first point.

Second, Mr. McLoughlin mentioned the new CEO positions. Personally, I welcome this change because it will be more businesslike having CEOs as opposed to county managers. It will be more or less a board of directors and a CEO. What is the current position? Is it a seven year contract for the first phase as county manager and then a rolling contract for the second phase?

Another major issue for the public representatives and officials in all counties is that of rates. I see this in counties Sligo and Leitrim, where there are huge concerns and there is conflict between the county councils and the Valuation Office in regard to rates. It is a major issue that will have to be resolved in some way. In their capacity as county managers, is there anything that can be done to try to resolve this under the new Bill? It is a major concern for every business, every employer and every property owner at present. It is an issue that will not go away. The Minister maintains that the Valuation Office is untouchable but perhaps the county managers will have a role to play in the future.

I join in the welcome for the county managers. To play devil's advocate, which is a role I never like filling, there is a perception that this reform at local government level is mainly at the expense of the elected representative - in other words, the councillor - and of the front-line services - in other words, the people who are delivering services for the county councils such as road workers and front-line staff - while management has escaped. It is a bit of an Irish solution to an Irish problem and, in my own case, a Tipperary solution to a Tipperary problem. This is because, despite the amalgamation of the two county councils in north and south Tipperary, there will be no real difference because half of the services will be delivered from Clonmel and half from Nenagh, and the management stays the same, although the councillors and the outdoor staff will be reduced in numbers. The witnesses might like to dispel that perception or give their reaction to it. Where savings are to be made is an important issue, but this should not be solely at the expense of the elected representatives and the front-line staff.

Mr. Daniel McLoughlin

I will deal with that question first and will ask my colleagues to come in on some of the other points. I am aware of the argument in regard to democratic representation. The group that was before the committee prior to us was in a better position to answer that. In regard to management escaping, I would point out that, as part of the local government efficiency review report, a commitment was made to reduce senior positions and a workforce planning report was prepared by the CCMA for the sector some 18 months ago. Directors of services, who are the second tier, have been reduced from 240 to 190 as part of that process, which is a very significant reduction. There has also been a reduction of 15% in grades immediately below that, such as senior engineers and senior executive officers. County managers are being reduced in regard to the amalgamations and, at a later point, Mr. Conn Murray might like to comment on amalgamations generally.

I will move on to the question of the appointment of managers and the related provision in the new Bill. The CCMA's concern is as follows. As it stands, the process is that the Public Appointments Service recruits for senior positions throughout the public service across the Garda, the health service, local authorities, county managers and so on, and has been doing so for decades. The integrity of that process is understood and accepted by everyone. However, the provision in the Bill allows a council through its inaction - it does not have to do anything - to undermine that process, effectively, in that if it does not make a determination within three months, the person does not get appointed. The Bill makes no provision as to why that might be. We feel this puts the local elected members in a very vulnerable position, although that is simply our view on the matter.

I will let Mr. Connor talk about Irish Water and will then go back to Mr. Maguire in regard to property tax and related issues and to Mr. Murray in regard to members and additional functions, if that is okay with the Chairman.

Mr. David O'Connor

I will address the Irish Water issue. The first thing the county and city managers did at the very beginning, when the Irish Water initiative was published, was to establish an office to represent us all collectively. The creation of this new national utility is a huge undertaking of itself, so the collation of information, and the representation of all of the councils together in one place, was a vital piece. I am currently looking after all of that work and the constant negotiations.

Both Deputy Cowen and Deputy Stanley mentioned the service-level agreement. Basically, what will happen is that for a 12-year period the service-level agreement will be put in place whereby the local authorities will provide a huge proportion of the services they currently provide. In regard to Deputy McLoughlin's point, there is no danger of people within the existing system being moved out of it for the 12-year period because that was negotiated at high level with Government. That remains a fundamental part of the draft service-level agreement that is on its way through. There are many other associated issues concerning, for example, the funding of how we will run our water services during the period when we are, effectively, the agents of Irish Water. That is currently undergoing detailed negotiation and is extremely complicated, to say the least.

With regard to Deputy Cowen's questions, I would love to be in a position to help him. At present, there are at least four meetings going on around the country on a daily basis, every day, gathering the kind of information the Deputy is seeking in order to make a determination as to what are the overall priorities. The Deputy is correct there has been some very significant investment in water infrastructure but the demands for it are extraordinarily high. The Deputy has heard the kind of figures that are being talked about for Dublin and the cost of perhaps bringing water from the Shannon and all of those kinds of large projects. Those are inescapable facts and many of them are associated with environmental performance and oversight from Europe as to the way we perform in this regard.

Another element we must bear in mind is that Irish Water, even for its own purpose, may not have the ultimate say on priorities. That is due to the structure of the current system, which dictates that the energy regulator will become the regulator for water and will determine the price of water.

As members will know, the purpose of Irish Water is to establish an entity that has the capacity to raise money to feed a much-needed investment in water services. All of our water bills will be determined by the energy regulator. One imagines that the regulator will examine value for money and will determine the level of investment and prioritisation of investment around the country. Not even Irish Water can do that for its own purpose, although it might produce its priorities.

I imagine that environmental compliance is a high priority because we are in danger of being fined if we do not comply. Apart from that, discretion will move to the regulator. We are anxious that the regulator will have an awareness of local issues, regional issues and economic development. We have worked to ensure that happens. Those are the important issues that keep the show on the road. Local authorities have kept the show on the road for a long time by always being able to respond where individual initiatives arise - for example, bringing an industry to an area or developing an area in order to ensure an appropriate level of services. That connectivity of decisions needs to be sustained into the future, but that is a highly complex area. Unfortunately, I am not in a position to enlighten the committee much further. All I can say is that as it becomes apparent, we will all get to know the priorities.

Mr. Daniel McLoughlin

I thank Mr. O'Connor. I shall also mention the regulator. Members may be aware of but may not have seen the position paper and consultation paper on Irish Water that has been published on the energy regulator's website, which makes for interesting reading. It is a fact sheet on the regulator's view of the current situation and is worth reading.

I ask Mr. Conn Murray to answer the question on executive functions, reserved functions and whether some additional functions might be devolved to local government.

Mr. Conn Murray

The policy document Putting People First drives the direction that we are all going in. The document contains a couple of important statements. It clearly states:

Local Government will lead economic, social and community development locally. It will be the main vehicle of governance and public service at local level [...] Separate structures of public service will not therefore be established...

That is an important statement to begin with because now we can commence talking about what functions are relevant at local level and, therefore, what functions should fall under the remit of the council. As we will take a far stronger role in both economic and, primarily, community development, these functions, in my view, should be clearly within the remit of elected members. Let me give the small clear example of the transfer of rural transport to the local authority system and how that affects operations in terms of routes and so on.

Another aspect is the linking of local government reform with the education system. At present, we perform a function for the Department of Education and Skills by identifying sites for schools. Proper local planning and thinking ahead should be a council function and not a matter for the Department.

Members are probably well aware of another aspect. The national positive aging strategy recommended that councils for older people be established in each authority. At present 16 forums for older people have been established under the Age Friendly Town and Age Friendly County programmes, which directly link the community to elected members. In my view that is a strong area because it embraces education from youth to older people. We are starting to talk about welfare in that context and it should be considered at local level.

I was asked to comment on two more issues, the first of which was the refund of rates. My authority is one of the authorities that have split. Limerick City Council had one view and Limerick County Council had another view. There will be a very significant loss of revenue if the 50% refund is implemented. It is incumbent on the individuals on the ground to ensure that businesses are occupied. I am not saying that such an objective is easy, but it is part and parcel of the property tax. The initiative has worked well in the cities in which I have worked.

I would consider the idea of devolution, but members should make the decision on how to implement this. Once they have seen the impact on individuals and how it affects a council's finances and capacity to provide resources then perhaps a more realistic decision can be reached.

Earlier mergers were mentioned. Limerick is one place in which the authorities are in the process of merging. We have brought the two Limerick authorities together and also brought the regeneration agency under our remit. There has been a 25% reduction in the number of senior regeneration staff, and there will be a 50% reduction at senior level in terms of directorates within the next couple of years as a direct consequence of the merger. We are still working through the merger, so there has not been a similar effect on the operational side. To be honest, our focus is on providing better services, discovering the cost involved and finding the necessary resources, not whether there are more or fewer people.

Thank you. Senator Keane was here earlier but had to leave for a short while to attend a vote. I ask Members to be brief and only ask questions, because the committee is on a very strict time schedule.

I thank the Vice Chairman. I am sorry for leaving during the presentation. I welcome the managers. Obviously they provide a very important service. I live in the south Dublin area so I welcome Mr. Daniel McLoughlin, the county manager at South Dublin County Council.

I wish to talk about the devolution of functions but I will not dwell on the matter. One major development has been the bringing of county enterprise boards and economic development funding into the local authority area. When I was a councillor on South Dublin County Council I was very active in the economic development forum, and I still am. Now, having an all-encompassing authority will ensure that the local enterprise boards or LEOs will be of great benefit to each county.

Does the Senator have a question for the delegation?

Safety legislation has upped the cost of providing services, particularly on roads. I know there has been a dramatic increase in the cost of cutting the grass on the central median of the N81. What do the managers think of safety legislation?

Does the Senator wish to know the cost?

No, I do not wish to know the cost, but I wonder whether bureaucracy has gone mad. Some local authorities have implemented the safety legislation in a different manner. Can something be done to reduce costs?

Today, all of the talk has been about a certain matter. Therefore, I cannot let the opportunity pass without saying that vacant houses in local authorities should be used. Can something be done about the matter straight away?

We have Comhairle na nÓg, or youth councils, but it would be great to have something similar for senior citizens, a Comhairle na nAostach. I would be grateful to the delegation if they could promote the idea. Without devolution of power, the idea of a mayor for Dublin will go out to the people. If we do not have devolution of power it is another office.

I congratulate Mr. Daniel McLoughlin on his promotion to the post of county manager of South Dublin County Council. We were happy to have him in Westmeath for a good number of years and his departure has left a vacuum. He proactively developed the county and adopted a hands-on approach to everything that happened in the midlands and County Westmeath. I take this opportunity to acknowledge his contribution this morning.

I wish to comment on local government reform and the Putting People First document. Is it the general view of the managers that councils are perfectly positioned, as stated in the document, to boost economic recovery within communities? Does the delegation view the embedding of county enterprise boards as a plus for county development?

Mr. Daniel McLoughlin

I shall return to the question on property tax later.

Health and safety legislation has led to a significant cost burden. Unfortunately, four people have lost their lives so far this year in the local government sector. The matter is extremely important, so the cost of health and safety must be factored into everything that we do. We must also respect the law of the land and protect our employees on a daily basis.

I understand the Minister of State at the Department of the Environment, Community and Local Government, Deputy O'Sullivan, has made an announcement about a budget provision for vacant houses.

As I said at the outset, we see the LEOs, along with the special strategic policy committee on economic development, as putting economic development, job creation and enterprise support right at the centre of local government.

With regard to a mayor for Dublin, the Senator is aware that the colloquium is under way. That consultation process will finish at the end of the year.

I ask the Meath county manager to comment on the question of property tax and the issue of there being no more money.

Ms Jackie Maguire

The introduction of a property tax is broadly welcomed as it will put local government on a much more sound footing in terms of funding. There have been many reports in recent decades on the funding of local government, how it has evolved and the issues it poses. Currently we are funded through the local government fund. It is the intention that the property tax will replace that fund. In fact, there are no additional moneys. The property tax is a replacement of the current fund, which is composed of motor tax receipts and a sum of money from the Exchequer. The amount from the Exchequer was replaced in previous years by funding taken from the household charge. The intention is to replace the Exchequer funding with the local property tax. It is the intention in the reform document to have an element of that decided upon at local level. That will be introduced in the future. We welcome it, as it will provide more accountability and there will be more connection in the public mind between local funding and the services that are provided locally. That is something that was missed in recent decades. When funding comes from a central source there is a detachment among the local community. It is helpful for people to be able to say that the money is collected locally, we are paying it locally and it is providing our services locally. At the moment it is true that there will be no additional funding. When we arrive at a stage at which the amount collected locally from the property tax will be kept locally, there will always have to be a level of equalisation within that model, particularly for the rural counties. How that is established remains to be seen.

I thank Ms Jackie Maguire. Two issues were raised by members - the seven-year contract and the valuations.

Mr. Daniel McLoughlin

The position with regard to the seven-year contract has not changed under the Bill. As far as we are aware, there are no plans to change it.

Ms Jackie Maguire

On the valuations issue, we interact constantly with the Valuation Office. I suppose there is an antiquated method for valuations. A revaluation is taking place, predominantly within the Dublin region, and that will be spread out to all local authorities. There is a time element. The Valuation Office has examined other methods of performing that revaluation in other local authorities through self-declaration, and that is working its way through. Local authorities are conscious that the rate is a burden on businesses, but it is also a vital source of funding for local government and if they do not have it the services cannot be provided locally. Local authorities will take a pragmatic view, allowing businesses to enter into payment plans in respect of the rates. There is a balance between keeping the businesses open and allowing them a level of discretion while still collecting the local tax.

I call Deputy Corcoran Kennedy, who will have to be brief as only two minutes remain.

I thank the Vice Chairman. I apologise for missing the presentation as I had another engagement. If the issue I am about to raise has been discussed already I will get the information at a later date. In respect of the procurement office in Kerry, has each local authority throughout the country appointed a procurement officer to liaise? The other question is in respect of Irish Water. Is the association satisfied with the way in which it is progressing and the relationship between-----

That latter question has already been asked and dealt with.

I thank the Vice Chairman. I will look it up.

I wish to put one question, given that we have all the managers together.

The Senator has only one minute.

Local authority houses are exempt from property tax. Obviously the witnesses are the landlords of their local authorities. Do they pass the charge on to the tenants or pay it out of their own coffers? It is important that each county do this in the same way. What is the view of the witnesses? How is it being done?

I thank the Senator.

Mr. Daniel McLoughlin

I will give two quick responses. In reply to the question on procurement, every local authority is provided with a procurement officer. In respect of the application of property tax to local authority houses - in the case of South Dublin County Council, the amount comes to €800,000 - as the Senator is aware, the method of application has yet to be determined. At this point in time the council is not anxious to pass it on.

Is that an all-Ireland approach or is it is a matter for individual local authorities?

Mr. Daniel McLoughlin

It is a matter for the individual local authority.

I thank the representatives of the City and County Managers Association for appearing before the committee and for their presentation and assistance.

Sitting suspended at 11.55 a.m. and resumed at noon.