A war of words has broken out between the Department of Environment and a local authority over fears councils will be left facing massive debt as a result of the transfer of assets to Irish Water in January.
On Monday night, city manager Owen Keegan broke the news that Dublin City Council is set to lose €2bn in assets due to the move.
He further warned that the council will also be left with hundreds of millions of euro in related liabilities.
The funding hole, he said, would inevitably impact on higher charges for businesses, a slower response to extreme weather events and cause “very significant financial and operational risks to the city council”.
However, despite fears over the issue and concerns it will be repeated in other councils nationwide, the Department of Environment insisted no such budget problems will emerge.
A spokesperson told the Irish Examiner the transfer of any assets to Irish Water next month will include the transfer of all related liabilities.
He said the assets themselves were already paid for via funding from the exchequer through the Department of Environment, and as such no council would be out of pocket due to the move.
Dublin City Council declined to comment when contacted yesterday, with a spokesperson saying senior officials were busy preparing the local authority’s budget for next year.
However, during Monday night’s meeting, Mr Keegan was clear in his view that the transfer of items to Irish Water will damage the local authority’s abilities to provide vital services to the public.
He said the council was facing €330m-worth of pension liabilities for water services staff, despite now not having the assets needed to fund them.
“In the normal course of events one would expect that when a function transfers from one public service agency to another, public service agency responsibility for legacy pensions associated with the function would also transfer,” he said.
He further warned €2bn in assets are transferring to Irish Water “without any compensation” to the citycouncil.
“It seems unreasonable that a major liability relating to these assets will remain with the council notwithstanding the fact that the assets have transferred to Irish Water.
“The pension liability is directly related to the underlying water assets and was incurred in developing and maintaining those assets.”
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