This year, the council is to spend €500,000 to keep the troubled Killarney Sports and Leisure Centre afloat.
Killarney hoteliers – whose pools are in competition with the subsidised public centre – are now up in arms and threatening legal action on grounds of unfair competition.
Before the council agreed to proceed with the pool element of the project, in 2005, strong misgivings were expressed by the then council manager, Tom Curran, now Kerry county manager, about the viability of the pool.
It was pointed out that councils around the country were subsidising pools and the pool could become a serious financial burden, long-term.
There was a lobby within the council in favour of a centre without a pool. However, the council voted for the inclusion of a pool.
Though the centre was officially opened in July 2008, problems soon became apparent. In August 2009, the Aura Sport and Leisure Management company, which had been contracted by the council to run the centre, announced it was pulling out.
Reasons given by the company for its withdrawal included difficult trading conditions, the council’s refusal to underwrite projected losses of €300,000 and competition from Killarney hotels with similar facilities.
Late last week, the Kerry branch of the Irish Hotels’ Federation (IHF) and the Irish Business and Employers’ Confederation (IBEC) handed in letters to the council objecting to a proposal in its 2010 budget to pump more public funds into centre.
The council was contravening competition law, the organisations argued. But, the council agreed by seven votes to one to continue pouring money into the centre.
The council has already spent €8m on the project, including €4.3m from the sale of a car park and a €3.5m loan with annual repayments of €282,000 over 15 years.
And, in his role as Minister for Arts, Sport and Tourism atthe time, John O’Donoghue was a strong supporter, helping to deliver a further €5.3m in state funding.
Now, according to Kerry IHF chairman Conor O’Connell, legal advice to business interests is that the council’s action in underwriting losses at the pool is against competition law.
He said the public centre was offering membership at rates other businesses could not afford to give.
Labour councillor Sean Counihan said the majority of councillors were disgusted at what he described as “intimidation” by the IHF and IBEC and claimed many of the hotel pools were built with the aid of taxpayers’ money.