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Local Authority Finances

Dáil Éireann Debate, Tuesday - 28 May 2013

Tuesday, 28 May 2013

Questions (486)

Joan Collins

Question:

486. Deputy Joan Collins asked the Minister for the Environment, Community and Local Government in view of the fact that his Department, in a letter to the Sligo County Manager dated 2 November 2012, expressed concern at the accumulating deficit on the councils revenue account and stated that he would be willing to provide approval for the conversion of the council’s then existing overdraft of €7.5 million to a term loan, and further stated that such a loan would reduce the council’s banking costs and provide an opportunity for the council to reduce its overall debt levels, if his attention has been drawn to the fact that having converted the €7.5 million overdraft to a term loan, the county manager at a council meeting on 4 March 2013 sought approval for a new overdraft of €8.5 million; if his further attention has been drawn to the fact that Sligo County Council’s revenue deficit increased by a further €2.45 million in 2012; if he is of the view that the ongoing conversion of Sligo County Council overdrafts to term loans is sustainable; if he intends to approve the proposed new overdraft of €8.5 million; and if he will make a statement on the matter. [25684/13]

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Written answers

I refer to the replies to Question Nos. 161 and 162 of 21 November 2012 in which I indicated that sanction was conveyed to Sligo County Council on 8 November 2012, in accordance with Section 106 of the Local Government Act 2001, for the borrowing of €7.5 million by way of a term loan. The Council’s overdraft borrowing limit was revised to €4 million in conjunction with this sanction.

It is necessary that local authorities have recourse to overdraft from time to time as capital spending is funded in arrears and the timing of local authority income such as commercial rates, charges, and rents will not always match expenditure. In line with normal Departmental procedures, I conveyed sanction on 25 March 2013 to Sligo County Council to borrow, by way of a temporary overdraft, a sum not exceeding €8.5 million. It remains a requirement for Sligo County Council to continue to deal with its finances in a prudent manner.

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