Limerick council seeks to plug hole in its finances

Norma Prendiville

Reporter:

Norma Prendiville

Budget solution: Conn Murray, chief executive of the council
LIMERICK’S councillors, who failed to agree a budget last Friday, are meeting again this Monday morning in a bid to finalise its income and spending of €239m for 2016.

LIMERICK’S councillors, who failed to agree a budget last Friday, are meeting again this Monday morning in a bid to finalise its income and spending of €239m for 2016.

The hope is that chief executive Conn Murray will somehow have come up with a better solution to the €2.45m hole in the council’s income. The funding gap arose out of a rates revaluation carried out earlier this year, as a result of which large utility companies were able to cut their rates bills for 2016 in Limerick by €1.7m.

In addition, the council stood to lose a further €750,000 in 2016 after other businesses appealed their new revaluations.

The shortfall of €2.45m could only be bridged, councillors were told, by a rates increase of 4.5%.

Then, just hours before last Friday’s meeting, the government announced it would provide compensation on a “once-off” basis, initially of a figure believed to be €1.2m but later confirmed as €1.1m.

But as 5pm approached last Friday, councillors were no nearer to agreeing how this money would be spent. Would they increase spending in certain services such as roads? Would they use some of the money, as Sinn Fein argued, to beef up the bin waiver scheme which was being cut? Or would they use the money to strike a lower rates increase?

In the end, Fianna Fail leader in the council, Cllr Michael Collins said that, despite many hours of debate, “we find ourselves in a certain difficulty” in trying to agree the 2016 budget and in trying to bridge the €2.45m gap in particular.

The once-off payment, he said, wouldn’t solve their problem for the lifetime of this council. If the government, at a stroke, could return €1.1m, he argued, it could return more.

“Further time is needed, “ Cllr Collins said and he asked that chief executive Mr Murray would enter talks with the Department of Finance on the matter.

“Who works at the weekend that can make a decision like that?” demanded Independent Cllr John Gilligan. But Cllr Collins’ proposal was passed.

In the meantime, Sinn Fein has called on the government to compensate Limerick for every cent lost in the rates revaluation. The government was essentially subsidising big business by giving rates breaks to highly profitable utility companies, the party said, and people who depended on council services were being asked to foot the bill.

The 4.5% increase in rates proposed on Friday is not however expected to affect most small and medium size businesses as a rebate scheme will offset the increase to them.