Friday 8 May 2009

Shrinking income may force council to sell assets

THE country’s largest local authority may sell off or lease a number of its assets, including a €40 million superdump, in an attempt to make ends meet during the next few years.

Cork county manager Martin Riordan has warned that post-2010, the council will have to think of ways to bolster its coffers in the face of ever decreasing income and expected cuts in Government grant-aid.

One of its valuable assets, he said, could include the landfill at Bottlehill in which the council invested €40m.

It is due to open early next year.

Ideally, the county council would like to lease the facility so it could keep administrative and regulatory control over it. This could well attract a great deal of interest from private operators.

One company, Greenstar, has tried on a couple of occasions to build a superdump near Kildorrery in north Cork. It wanted to use the proposed site as a landfill for refuse collected throughout the Munster region, but a planning application was thwarted by An Bord Pleanála.

On the subject of waste, Mr Riordan said the council would also have to look at its service because the pay-by-weight system may not prove attractive in the years ahead.

Last December, the council introduced an all-in-one refuse disposal price of €250 for all new customers. Up to 600 households signed up.

However, 47,000 existing council customers still have to pay a standing collection charge and an additional charge per kilo for refuse disposed of.

Mr Riordan acknowledged that, in the current economic climate, householders would probably be happier with an all-in charge. "People are very conscious of price certainty. We will need to review the pay-by-weight system," the county manager said. He also acknowledged that the council was facing very active competition from private waste companies.

The manager said a full review of all council services is being undertaken in view of declining revenue and cuts in staff numbers.

A voluntary retirement package to be introduced shortly is likely to see a further 100 employees quit the council. More than 200 contract staff were laid off recently.

Mr Riordan is fearful that income from rates will plummet. If 10% of local businesses go to the wall, the council will be down €10m in rates.

In addition, it is expected that the Government will cut its funding to local authorities.

"The money we get from planning fees has fallen rapidly and development levies have fallen like a stone which has also affected income," Mr Riordan said.

He has resisted the temptation to increase rates on businesses this year, which would have brought in much needed income.

Mr Riordan said that, if Government funding is cut further, he may be forced to increase rates.

But he said he’d like to keep that increase as minimal as possible. He said the council wants to hold onto businesses that have been built up in Cork and also wants to encourage more businesses to locate in the region.

"We are managing okay at the moment. But post-2010 we are facing a very difficulty financial environment and we are looking at all our assets to bridge the gap over the next few years," Mr Riordan said.

Irish Examiner

No comments: