Council on the brink of cutting services
THERE is "no room for manoeuvre" in Kilkenny County Council's finances, and any further drops in funding will mean that services will have to be cut, a senior official has warned.
“We have watched our budget over a number of years now” – including an unexpected need to make 2 million euro in cuts in mid-2009 – “and we don’t have the same scope (to trim spending) now. We are down to the bare provision at the moment,” the council’s head of finance, John Dempsey, told members at Monday’s council meeting.
The outlook doesn’t look any better for next year either.
“We don’t have any official or unofficial word about what our Local Government Fund allocation will be next year,” Mr Dempsey said, but based on the ongoing crunch nationally, the council is expecting to see “another substantial reduction in the Local Government Fund for 2011 on the back of an already tight budget”.
“From here on out,” he said, direct service cuts are the only way to avoid a substantial deficit. “We would have to start dropping services; it won’t be cutting from now on, we would be dropping services.”
Since 2008, the council has seen a 14% reduction in expenditure, down from 81 million euro to 70 million euro. For funding of capital projects in particular, Mr Dempsey said: “Our main source is from development charges, which have been severely reduced.”
For 2010, even when predicting a 40% fall in revenue from development charges, the council had expected to bring in 11.4 million euro. The reality, however, is now between 1 million and 1.5 million for this year.
“We took a fairly conservative view that there would be a 40% cutback,” Mr Dempsey said, “but it is much worse than we had foreseen”.
“It is not news to you, but the biggest pressure area that we need local funding for is water services,” he told the council, as there are “fairly significant local funding requirements in terms of percentage”.
In more positive news, the Department of the Environment is granting the council an interest-free long-term loan to fund five major water and sewerage projects this year. These include Gowran/ Goresbridge/ Paulstown Water (0.55 million euro), Thomastown/ Inistioge Water (4.55 million euro), Kilkenny City Regional Water Supply Scheme (2.10 million euro), Mooncoin Regional Water (13 million euro for phase 1A, a total of 26 million) and water conservation works (18 million euro).
Still, this means that the long list of other water and sewerage upgrades will not yet be progressed at this stage, as the council cannot afford to take out a loan for the projects.
This has led some members to call for new ways for the council to bring in revenue, including the introduction of domestic water charges.
“The only solution really at this stage is to introduce water charges. We do have to fund this infrastructure in the long term ... it is not just about EPA guidelines, it is about providing an essential service to the community,” said Cllr Malcolm Noonan (Greens).
“People say they won’t pay for water charges, but they spend 20 euro on bottled water,” he pointed out.
“It may be unpopular, but everybody is deserving of clean water,” said Cllr Pat Millea (FF). “I want to make the point that we can all talk and say sad it is and how difficult it is, but if it is possible, I for one would be supportive of some way that we could raise funds within our own authority, to raise funds here rather than let it drag out for years and years.”
“The current system of funding is unsustainable and we need new funding mechanisms,” said county manager Joe Crockett. “The development levies system has essentially collapsed.”
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Monday 21 May 2012
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