Tralee Town Council is investigating the possibility of seeking a judicial review of the budget allocation by the Minister for the Environment, Mr Cullen, to the council under the Local Government Fund.
The council is to receive an 11.7 per cent increase in the fund for 2004, much less than many other towns.
With growing waste-collection costs and charges of €700,000 annually on tourism projects such as the Jeanie Johnston replica Famine ship, the council finally passed its budget this week.
However, it is now seeking legal opinion on a judicial review of the allocation.
The matter is already with senior counsel but could take some time, the town manager, Mr Willie Wixted said yesterday.
A majority of councillors agreed at a meeting on Monday to an 8 per cent increase in the rate and endorsed a last-minute rescue plan put forward by Cllr Ted Fitzgerald (FF).
However, the plan is contingent on an 800-customer increase in refuse-collection customers.
Cllr Fitzgerald's plan may allow the council to give a once-off grant of €50,000 to the Rose of Tralee festival, which recently faced liquidation.
There was angry reaction from councillors at the admission by Kerry County Council that it had provided private waste contractors with start-up grants through its county enterprise department and had given a number of contractors discounts of up to 20 per cent on landfill charges.
This allows private waste contractors to undercut the local authority's waste-service charges.
Mr Wixted said the discount to the private operators had now been discontinued. It was only given because these contractors compacted their waste and provided transfer facilities. A moratorium on annual loan repayments of €235,000 to the Jeanie Johnston project was also ruled out.