There will be no reduction in the rate of Local Property Tax (LPT) for hardpressed Kilkenny householders next year, following a decision by local councillors on Monday.
The members of Kilkenny County Council instead voted to maintain the basic rate of tax, resisting the advice of the council executive to consider a 5% increase. In doing so, the council avoids the distinction of becoming the first local authority in the country to increase the LPT rate, however, the decision comes at a cost.
Local services will now have to be cut from the 2015 Budget to make up for the lack of revenue the council will generate. The council’s finances are under pressure and it must present a balanced revenue budget for the year.
Monday’s meeting only began after an hour-long delay during which the Fine Gael and Fianna Fail groups met the council executive privately. Head of finance Martin Prendiville then gave a final briefing to members.
The councillors were furnished with a list of ‘possible discretionary expenditure’, which shows the amounts spent in 2014 on a variety of things, from housing grants and road lighting, to local festivals, public toilets, Tidy Towns and libraries. It is from the items on this list that the money may have to be found.
While the Department allocation for next year is the same as that of 2014, a number of factors will leave the council short on funding. This includes the phased introduction of a new national rent scheme, which will see an annual reduction in rental income for the council of €600,000 (€150,000 next year). It was also revealed that the withdrawal of Diageo from the brewery site will see the council miss out on €80,000 in rates, and there has still been no relief money from the Department to help cover the repair costs of Storm Darwin.
Additional costs on the CAS bridge project have reached €560,000 and are expected to increase, although a final figure cannot be confirmed. Spreading it over a few years, the minimum cost for 2015 will be €300,000, and coupled with housing rents, it sees a total expenditure reduction of €450,000 required in Budget 2015.
No additional funding will be provided by the Equalisation Fund to offset these costs, and so the council must reduce expenditure. Had the members opted to increase the LPT by 5% as per the council executive’s note, it would have yielded €383,000 in additional income. It was clear from remarks by all members, however, that there was no appetite to increase the tax.
An alternative model for where the money could be found had been proposed by the Sinn Fein group as part of the public consultation process. However, this was rejected by both director of finance Martin Prendiville and acting chief executive John Mulholland, who said the projected outcomes were ‘unattainable’.
Mr Mulholland said that the council would futher attempt to recover money for storm damage, and would follow any avenue which might allow them to recover legal costs associated with recent High Court and Supreme Court appearances over CAS.
Director of services Simon Walton said that the timeframe for the project had envisioned for four piers constructed in the river by now, as part of one summer’s work.
“That hasn’t been possible [due to the delays],” he said.
“So, all of the in-river structures will have to be put back in the river next summer.”
This will likely have a knock-on effect on the project timeframe again, necessitating an extension.
“The costs associated will be very substantially in excess of €560,000,” said Mr Walton.
Every councillor present spoke at the meeting, and all confessed their disappointment about not being able to reduce the LPT rate.
“As a new councillor, I was looking forward to coming in and making a reduction in the LPT,” said Cllr Michael McCarthy (FF).
“That is not going to happen now. I dread to think of which services and works will not be carried out now.”
Cllr David Fitzgerald (FG) admonished ‘people in this chamber’ who he said had played games to get elected in full knowledge of the consequences of their actions. He warned of the effect of cuts to services, such as festivals, etc.
“We are going to cut our own head off, because these things have been our own economic drivers,” he said.
His colleague, Cllr Fidelis Doherty (FG), said that what had happened had greatly affected the council and will do so for years to come.
“It is truly shocking that Kilkenny County Council are in this position because of reckless and careless carry-on,” she said.
“There are people [involved] who don’t even know the implications of this. It is absolutely scandalous. It was roared into our faces ‘shame on you’... Well, I say to them, ‘shame on you’.”
Cllr Maurice Shortall (Labour) said the time had come for the councillors to now work together with the reality of the new situation.
“We should draw a line in the sand and look ahead now to the budgetary process,” he said.
Cllr Malcolm Noonan (Green), an opponent of the CAS, agreed this was the most prudent way forward.
“I agree with Cllr Shortall – we now have to find ways to minimise the impact of what were are doing today on the people of Kilkenny.”
Fianna Fail whip Cllr Matt Doran proposed that the LPT rate be left as is, and this was seconded by Fine Gael whip Cllr Mary Hilda Cavanagh. A vote was taken, and the 23 members voted in favour, with one member (Joe Malone, FF) absent.