Council facing cuts of €2.8m

A SOUTH Dublin local authority will have to cut almost €3 million from its budget between now and December because of a significant increase in companies going out of business, it has told councillors.

In a circular to councillors this week, Owen Keegan, county manager of Dún Laoghaire Rathdown County Council said arrears in commercial rates are expected to be €20 million. He also said the cost of the World Festival of Cultures would be €400,000 higher than expected.

Local authorities are required by Government to keep their revenue budgets in balance and must not incur a deficit. A recent review of Dún Laoghaire’s budget revealed a deficit of €2.8 million.

Mr Keegan said the 2010 budget adopted last December provided for expenditure of just over €200 million, almost half of which was to have been financed by commercial rates.

The local government fund was to contribute almost €35 million, with grants and other income making up the rest.

“Since April there has been a significant decline in the collection of commercial rates,” Mr Keegan said. Economic conditions remained very difficult and there has been a “significant increase” in ratepayers who had ceased trading, or gone into examinership, liquidation or receivership.

“As a result, collection of this vital component of the council’s income is becoming increasingly challenging,” he said.

He also told councillors the net cost of this year’s Festival of World Cultures would be higher than provided for due to a “significant reduction” in grant aid and other funding as well as additional costs, including security. Though the final cost was not yet known, it was considered appropriate to make an additional provision of €400,000 to cover it, he said.

The council’s plan to collect non-domestic water charges after completion of a water-metering project will not go ahead this year “for a variety of reasons”, he said, and a provision of €500,000 would have to be made in bad debts to account for it.

It was also expected that planning fees for 2010 would be €200,000 less than budgeted “due to higher than expected decline in construction and development activity”.

Because of the bad weather earlier this year, the water services budget would be €300,000 more than expected, though the decision to exit the household waste market would result in a net saving of €400,000.

A total of €2.8 million in cuts would have to be found, Mr Keegan said. A list of possible cuts will be brought before the council later this month.