SLIGO COUNTY Council cannot survive without a significant change in management and a major financial bailout Cllr Declan Bree told the Minister for the Environment Phil Hogan T.D., when a deputation from the Council met with the Minister on Wednesday 1st of February

The all party deputation from Sligo County Council met with the Minister to discuss the Council’s financial crisis.

The meeting took place in Leinster House just weeks after it was confirmed in a Local Government Auditor’s Report that Sligo County Council was in the red to the tune of almost €77 million with its deficit growing out of control

The deputation which was led by the Cathaoirleach of the Council Cllr Michael Fleming also included councillors Gerard Mullaney, Hubert Keaney, Declan Bree, Jim McGarry, Sean MacManus and Patsy Barry. The Acting County Manger Mr Tom Kilfeather and the Council’s Head of Finance Ms Marie Leydon were also in attendance.

In his submission to Minister Hogan, Cllr Declan Bree said:

“Over the past number of years I have been consistently pointing out at Council meetings that the draft budgets presented to the elected Council by the County Manager bore no resemblance to reality.

“I pointed out that the budgets were absurd and unattainable and indeed I also pointed out that the elected council had an obligation both legal and moral, to ensure that in so far as possible that sound systems of financial management were in place in the Council.

“However, despite the spiralling debt, the County Manager continued to implement his style of management with the silent acquiescence of the great majority of councillors and as a result, today, Sligo County Council stands on the verge of bankruptcy.

“Even as late as last month, the majority of the elected members of Sligo County Council voted for yet another of the County Managers budget. A Budget similar to budgets presented to us in earlier years – a budget which could only be described as another work of fantasy, which will lead to yet another huge deficit at the end of 2012.

“In addition I would point out that information relating the Council’s finances which the elected council is entitled to have was consistently withheld from us over the years.

“It was impossible for councillors like me to scrutinize what was happening with regards to the finances. The record will show that when specific information relating to the finances was sought by the elected Council it was either not provided at all, or it was provided on a drip feed basis.

“Openness and transparency was anathema when it came to dealing with the finances of the Council.

“We now know that the Management of the Council committed millions of Euro to numerous projects despite the fact that the Council did not have the financial resources to cover the costs.

“We know this because the Management had to eventually seek approval from the elected Council to borrow millions of Euro to pay for the projects.

“Indeed when the most recent loan of €15 million was authorised in July 2010 councillors were told that it was to be applied to a number of items including the €7.5 million Revenue Account Deficit.

“However in 2011 when the elected council received the annual financial report we discovered that none of the loan was applied to the revenue deficit and that the deficit had in fact increased further to almost €10million.

“I understand that when Council officials sought approval for the loan it was also indicted to the Ministers Offices that portion of the loan was to be used to reduce the revenue account deficit.

“So in this context it would appear that senior staff in the Department of the Environment, who should have been watching, either didn’t take note of, or recognise, or appreciate the fact that the finances of Sligo County Council were spiraling out of control.

“I have to admit that I am at a loss to understand how or why certain senior civil servants in the Department of the Environment gave the thumbs up for all requests from the County Manger for loan approval and for the Council’s increasing overdraft facilities.

“Now Sligo County Council finds itself in dire financial circumstances.

“While the County Manger has not said it - I believe that the Council is running up a deficit in its revenue account of approximately €7,000 every single day, seven days a week.

“It is my opinion that as a result of gross incompetence and consistent mismanagement Sligo County Council now finds itself in a position which is unsustainable.
 
“In my opinion the Council cannot survive without a significant change in management and a major financial bailout.” Cllr Bree told the Minister.

The Minister in his response to the deputation particularly referred to the €15 million loan which was approved in 2010 and said the Department had been advised that portion of it was to be used to reduce the revenue deficit. He said he was concerned that none of it had been used to reduce the deficit and he said Sligo was the only Council in the country with such a revenue deficit.

The Minister made it clear that the Council was obliged to adopt a balanced budget and he said he had written to the Council and had drawn attention to the consequences that faced the Council, including the ultimate sanction.  The Minister said that Department officials will engage with Council officials on the ground. He said he wanted proposals from the Council with a view to addressing the financial crisis.