COUNTY MANAGERS RECOMMENDATION THAT COUNCIL BORROW A FURTHER €7.5 MILLION DESCRIBED AS INCREDIBLE

"GIVEN THE APPALLING financial record of this Council I find it incredible that the County Manager would recommend that the Council take out yet another loan to clear an overdraft." Councillor Declan Bree told this months meeting of Sligo County Council
"We have had a repetition of this type of borrowing which is leading the Council into deeper and deeper debt. Initially we have a recommendation from the County Manager that the overdraft be increased. Then when it’s increased to its limit we have a recommendation from the Manager to take out a loan to clear the bulk of the overdraft and approve a smaller overdraft. Then we are told that the Council’s annual budget didn’t balance and the whole process starts over again. The overdraft is again increased; a further loan is required; a new overdraft is agreed and the Council debt spirals further and further out of control.
"The contents of the letter from the Department of the Environment which has been circulated to us has major implications for the future of this Council. It contains disastrous news for this Council.
"Three months ago the independent consultants Grant Thornton in their report made it clear that in order to survive this Council required an urgent bailout of €10 million from the Department of the Environment. However the Department in this letter has now made it absolutely clear that there will be no bailout. Minister Hogan and the Department are saying that we must paddle our own canoe and that there will be no bailout.
"The County Councils capital debt is now €73 million and the revenue deficit is €13million and growing. And is it any wonder? For the past number of years the County Manager has consistently asked councillors to adopt budgets that were based on fantasy, budgets that bore no resemblance to reality, budgets that were absurd and unattainable, budgets that have led to massive deficits in the revenue account each year. And to make up the shortfall the County Manager then urges councillors to take out loans and increase overdrafts.
"Unfortunately the majority of councillors continue to dance to the County Managers tune and constantly vote for budgets, overdrafts and loans which have totally undermined this Council’s financial viability." Cllr Bree said.
"Only eight months ago we witnessed a scenario in this Chamber where the Fine Gael, Fianna Fail and Labour councillors voted in favour of a recommendation from the County Manager to increase the overdraft to a staggering €14 million. Thankfully the Minister and the banks would not approve such a proposal.
"Currently the Councils bank will not extend the Councils overdraft beyond €7.5 million. In this context I believe the bank manager in question is to be commended for taking such a stance. It’s a pity that senior bank officials and bank directors didn’t have the courage and the foresight to take such decisions in the past. If they did our country might be a lot better off today.
"What is happening here is madness, it’s clearly unsustainable and unfortunately it will be the ordinary people of this county who will in due course suffer the consequences.
"While other councils may have had difficulties, the fact of the matter is that Sligo County Council is the only Council in the state where the revenue deficit is increasing year by year. This type of further unsustainable borrowing is bringing the Council to the verge of bankruptcy." said Cllr Bree.
At the conclusion of the debate the County Managers recommendation to borrow €7.5million was adopted by a vote of 12 votes to 11, with the Fine Gael, Labour and Independent Labour councillors supporting the Managers recommendation.
