Limerick council approves two overdraft funds

Nick Rabbitts

Reporter:

Nick Rabbitts

Cllr James Collins, Fianna Fail, accused the executive of delivering 'mixed messages'
LIMERICK City and County Councillors have approved two separate overdraft facilities for council management to use where necessary.

LIMERICK City and County Councillors have approved two separate overdraft facilities for council management to use where necessary.

At this month’s full meeting, members approved AIB’s offer of an overdraft facility of some €37.5m.

And a second sum of €31.5m was also approved, although this has to be sanctioned by Local Government Minister Alan Kelly.

Councillors queried why they were being asked to approve this funding, especially in light of the fact they have already approved a €30m loan to develop the city.

“It is very ironic that you are coming to ask us to approve an overdraft, but when it comes to spending, we have nothing got to do with it,” Cllr John Gilligan, Independent, said.

Fine Gael councillor Stephen Keary noted that there was a sum of €43.8m sitting in reserve at the end of 2012 - and perhaps that could be used instead.

However, head of finance Tom Gilligan said this sum - drawn mainly from development levies and government funding - was put on deposit, and is not readily available to the local authority.

The council held an overdraft last year, and he said this went untouched - and the hope is these two funding streams will be the same.

“It’s good to have, but it is something we hope never to use,” he said.

Sinn Fein councillor Seighin O Ceallaigh was told the interest rate was 2.25%, but the council is constantly in talks with AIB to ensure the best rate.

Cllr James Collins, Fianna Fail, accused the executive of delivering “mixed messages”. and said: “There is a gap in the legislation here in that we can approve [funding], but we do not have a say on how the money is spent. We should have been made privy to the information rather than be forced to ask the question in the meeting.”

City manager Conn Murray reaffirmed that the overdraft will not be used unless required.

He said he hopes to have more information in the next month.

Councillors approved the streams.