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Sligo Borough citizens 'have every reason to be concerned' - Bree

The citizens of the Borough have now every reason to be concerned. To hand over the finances and resources of the Borough Council to Sligo County Council would prove disastrous for the future development of Sligo, Cllr Declan Bree said this week in advance of a special meeting of the County Council where a financial appraisal of the County Council is to be considered.

“I predicted back in June that the narrow and restricted terms of reference imposed by the County Manager for the financial appraisal of Sligo County Council would leave the consultants Grant Thornton, with no solution to the Council’s financial crises other than to recommend a take over of the Borough Council and its finances. And that is borne out by the report from the consultants which is to be considered at a special meeting of Sligo County Council on this coming Thursday. (9 August).

“The Report confirms that the County Council is experiencing an increasing deficit and currently has a deficit of €13 million in its revenue account. It indicates further that the Council will experience growing financial losses which will increase the deficit to a totally unsustainable €27.5 million by 2017."

Bailout Of €10 Million

Cllr Bree continued, “It recommends in the short term a State injection or bailout of €10 million to replace the Council’s bank overdraft and in the medium term it recommends a merger of Sligo Borough Council with Sligo County.

“The consultants state that while the County Council is experiencing an increasing deficit of substantial amounts, the Borough Council is balancing its budget. They also say that the Borough Council is in a stronger position than the County to generate income to bridge the funding gap by way of commercial rates and also from income generated within the town.

The Independent councillor stressed, “The citizens of the Borough have now every reason to be concerned. To hand over the finances and resources of the Borough to Sligo County Council would prove disastrous for the future development of Sligo.

“I pointed out at the beginning of this process that despite the fact that Sligo County Council has the worst financial record in the country and despite the fact that the County Council is the only Council in the state where the revenue deficit is consistently increasing year by year, there was no proposal in the County Manager’s terms of reference for the consultants to examine, review or assess the performance and competence of the management of the County Council. The consultants were instructed to examine every avenue except the obvious one.

'No Resemblance To Reality'

“Given the shambles of the County Council’s finances it is blatantly obvious why management would not want its competence and efficacy assessed.

“There are 34 County and City Councils in the state, and there are 34 County and City Managers. I again pose the question: Why is Sligo County Council the only Council in the country where the revenue deficit is consistently increasing year by year?

“The County Council’s Capital Debt is now €73 million and the Revenue deficit is €13 million and growing. And is it any wonder? For the past number of years the County Manager has consistently asked councillors to adopt annual budgets that were based on fantasy, budgets that bore no resemblance to reality, budgets that were absurd and unattainable, budgets that led to massive deficits in the revenue account each year. And to make up for the shortfall each year the County Manger then urged councillors to take out loans and increase overdrafts.

“Unfortunately the majority of county councillors dance to the County Managers tune and they have constantly voted for budgets and overdrafts which have undermined the council’s financial viability.

“When we met with Minister Hogan in January I told him that I estimated that the County Council was running up a deficit in its revenue account of approximately €7,000 every single day, seven days a week. According to a report issued by the Council’s Head of Finance this week my prediction was accurate - the head of Finance states that Council deficit for 2012 is expected to be €2.5 million!

“I also told the Minister that the Council could not survive without a significant change in management and a major financial bailout. I believe I was also accurate in that regard,” concluded Cllr Bree who is an elected member of both Sligo County Council and Sligo Borough Council.

Report

According to the summary of the Grant Thornton report; "Sligo County Council is facing a financial crisis. The Council’s ability to meet its present and on-going obligations is impacted by the severe budgetary position the Council finds itself along with unsustainable levels of borrowing. This independent financial appraisal of Sligo County Council was commissioned in light of this challenging financial and operating environment facing the Council. In the broader context there is the growing pressure on State funds and due regard was also taken to government policy regarding public sector reform.

"Following a detailed analysis of the information gathered, a wide number of key issues were identified and options were developed and considered in relation to the future sustainability of the local authority. The issues inherent in Sligo County Council which are contributing to this increasing budget deficit have been identified as follows:

1. investment in infrastructure assets that are not revenue generating;
2. staff legacies restricting the benefits of shared services or outsourcing; capital project staff
    paid from the revenue account;
3. inability to collect outstanding debts;
4. pension funding gap: pension profile is changing; and
5. financial impact of the relationship between Sligo Borough Council and Sligo County Council."

New Local Authority Clearance Certificate

SligoToday.ie believes that only a Cabinet decision to change the Croke Park Agreement can save Sligo County Council finances from exceeding debts of €100 million.

The Agreement expires in 2014 but consultants Grant Thornton are talking about necessity to have a Voluntary Redundancy Programme start before then to rein in salary and pension costs at Sligo County Council.

Sligo County Manager Hubert Kearns has himself said that on public record in past.

Perhaps one of the most interesting proposals by the consultants is that, much like a tax clearance certIficate, individuals would have to have a (new) Local Authority Clearance Certificate - confirming that they had paid service charges and the household tax -- before they could avail of any local authority grants.