Because of falling revenue and expenses caused by Covid restrictions, Sligo County Council will have to impose very severe restrictions on its budget and on spending.
That was the stark message to councillors this week from council chief executive Ciaran Hayes, who added that to do otherwise would be reckless trading.
The discussion on the council’s finances arose at this week’s September monthly meeting of the council during consideration of a financial report for the second quarter of the year, to the end of June.
Finance Officer Marie Whelan said the council’s deficit to the end of June was €1.2m, which is expected to increase over the coming months.
Among the income streams hit by Covid restrictions were those from traffic fines, and parking and planning fees, resulting in a shortfall of €450,000 up to the end of June.
While more businesses were open, people were not coming into town as much. Therefore it was expected that revenue from parking will be down for the remainder of the year.
Rents to the council, parking and planning application fees, indeed all income streams are expected to be hit.
Costs incurred included wages to roads workers despite the stand-down of outdoor crews during the lockdown — this amounted to €345,000.
The council also had costs of €400,000 for personal protection equipment and for people working at home.
Meanwhile, the council expects to be fully compensated for its rates waiver for eligible businesses.
However, councillors were told the ‘big drop in rates revenue is very evident in the bank.’
Council Chief Executive Ciaran Hayes said the indications were that the council will not be receiving compensation for the rates waiver until the end of September.
As regards expenses in relation to Covid, he said the indications were that the council may not receive expenses for that until next year, and there was the question as to whether the council would get 100%.
Looking to next year, he said the affects of unemployment were currently being masked by the wage subsidy scheme.
He also said counties for whom tourism retail revenue is important will also be impacted.
The chief executive warned that the council is going to be coming under very severe pressure when it comes to works to be done.
For example, the council deferred rent increases for council tenants; this increase had been earmarked for certain works on houses that have not been done.
Asked by Sinn Fein Councillor Arthur Gibbons about fears that some local authorities could face bankruptcy, Mr Hayes said Sligo County Council is probably most at risk in terms of its precarious financial situation because of legacy issues.
However, Solidarity People Before Profit Councillor Gino O Boyle insists central government should be making up the shortfall in funding.