Council unable to pass on savings over funding cuts

CUTS in Government funding prevented a local authority from passing on savings to ratepayers and householders last night as it agreed its 2011 budget.

The details emerged as Cork’s city councillors froze commercial rates for the third year in a row, and maintained the city’s bin, water and car parking charges, and rental rates, at current levels.

The refuse collection waiver scheme, which will cost €4 million, will also remain unchanged.

Councillors also agreed to ring-fence 1% of the city’s rates income next year — about €651,000 — to stimulate economic development.

City manager Tim Lucey told the budget meeting that framing the budget was a very difficult task given the economic conditions.

He revealed that 201 staff have left the organisation and not been replaced, resulting in a €10m saving in payroll costs. Overtime costs have also been cut.

But he said the city has been unable to transfer the benefits of these and other savings on to ratepayers due to reductions in its income base, including a reduction in the local government fund grant which has been cut by €4.8m (17.4%) since 2009 to just under €23m next year.

Mr Lucey also warned that the future of the city’s bin collection system, which is predicted to lose €1.8m next year, is unsustainable.

He has set up a working group to examine the future of the service and it is due to report back next year.

Fianna Fáil’s Terry Shannon said it was a “reasonable budget given the current circumstances”.

Socialist Party Cllr Mick Barry described it as a “budget of cutbacks” that will cut deep into the bone of the organisation.

“The Government is feeding the banks and bleeding the councils, services and people who rely on them,” he said.

Sinn Féin Cllr Jonathan O’Brien said while the budget looks good on paper, the reduction of 201 staff will impact on the level of services.

There was controversy over the decision to maintain the Lord Mayor’s salary at €90,000, and to set aside €114,200 for the mayoral allowance.

Several attempts by Sinn Féin and the Socialist Party to reduce the mayoral allowances and use the money for traffic calming, housing maintenance or sports grants, were voted down by Fine Gael, Labour and Fianna Fáil.

Fine Gael’s Cllr Jim Corr, defended the payments and said the budget strikes a “reasonable balance”.

He said the councillors’ representational payments represent just 0.7% of the city’s total revenue budget, and their conference expenses represent just 0.07% of the budget.

The city will spend just over €196m next year — €7.5m less than 2010.