14 Aug 2022

'Unbelievable pressure': €20m overdraft sought for Kilkenny as council confronts Covid cash crisis

It is likely a second budget will be needed to address the huge problems presented by coronavirus

Local councillors have given their approval for the council to seek an unprecedented €20 million overdraft facility to ensure it can continue to do business, pay staff, and carry out functions during the ongoing Covid-19 pandemic.

At a reduced-attendance council meeting on Monday with just seven members present, the councillors carried out the statutory business required of them and on behalf of their absent colleagues. It means the council's head of finance Martin Prendiville will now be able to seek the new terms from the bank with agreement from the Department.

The deferral of commercial rates payments by those unable to pay, and the potential realised loss from businesses not trading at this time means Kilkenny County Council is facing a cash crisis. Until now, an overdraft of €13 million was in place, but the facility must be expanded as a precaution.

It is also clear that some kind of second budget meeting will be required later this year, given the new realities since the council’s 2020 budget was adopted.

Cathaoirleach of Kilkenny County Council Peter 'Chap' Cleere says that, depending on how long the crisis continues, another meeting may be required regarding the overdraft. The council was budgeting for about €18 million in commercial rates income, and now it is facing two or three months without a lot of expected revenue. There was no indication yet as to subvention from the EU or central government.

Also, worryingly for the council is that the businesses the council subvents — the likes of Rothe House, the Castlecomer Discovery Park, the Watergate Theatre — will now come under ‘unbelievable pressure’ to keep their doors open when normal life resumes. As a result of closures, their capacity to generate any income has been rendered non-existent, and this will place huge strain on resources going forward.

“So, it is really every area we support, and they are going to be dependent on that,” said Cllr Cleere.

“It will have a huge knock-on effect. The message was ‘cash is the primary focus’ — making sure we have enough money to pay the wages, to continue the contracts and projects under way. Hopefully, there will be some subvention from national government or Europe, but we have to do this now. We can’t be in a position where we have no money.”

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