Galway City Council has sought approval from the Department of the Environment to borrow €20 million in the continuing controversy over its withdrawal from housing purchases.
A group of city councillors is seeking an emergency meeting on the issue, and deputy mayor Pádraig Conneely (FG) has called on the department to initiate an investigation into the city council's housing acquisition programme for 2007.
The controversy arose when 25 private homeowners, who had received booking deposits to buy their properties for use on the city council's housing list, were informed the local authority was no longer proceeding.
It is understood that the local authority has bought 62 properties and another 55 are under contract. All cost between €260,000 and €360,000. Director of services Joe O'Neill has promised councillors a report on the issue this week.
The local authority had applied for €60 million for this year's housing commitments, but the department says it would never have expected to get this full figure given that last year's grant was €16 million.
The department has confirmed that the city council has been granted just over €20 million and has also sought clearance to borrow €20 million from the Housing Finance Agency. The council said yesterday it also has access to €5 million from developers which they contribute to cover social and affordable commitments under the Planning Act.
The local authority said that this would mean it would have €45 million available to it, leaving a "shortfall of €10 million" in relation to the "issue over house purchases".
The department and the local authority are "currently examining mechanisms" to ensure €55 million is available to it between now and the end of the year, it said yesterday .
Mr Conneely said that it was outrageous that a local authority which was also the subject of controversy over Eyre Square and the quality of drinking water was now in trouble again.