Covid crisis could cost county council up to €11 million Council officials meet with IT Carlow
THE Covid-19 crisis is likely to cost Wexford County Council in the region of €11 million, according to a report issued to members last week.
Head of Finance for the council Annette O’Neill painted a bleak picture for the elected members at the June meeting, as the local authority moves into uncertain territory while the country re-emerges from the forced hibernation caused by the virus.
Having adopted an operational programme of €127 million as part of the 2020 budget, Ms O’Neill pointed out that the council coffers are dependent on funding from grants, local property tax, commercial rates and goods and services income.
‘ The unanticipated and exceptional events associated with Covid-19 have had immediate and severe impact on the elements of cash flow and funding projections required to deliver the 2020 operational programme due to the direct link to business activity,’ Ms O’Neill said.
She went on to point out that, since April, there has been a ‘significant reduction’ in the monies being received from commercial rates, which accounts for 32 per cent of the 2020 funding.
‘Any deterioration in this funding will have a direct and significant impact on the council’s ability to delivery local services,’ she said.
Since March 27, the commercial rates collection has experienced an average reduction of €350,000 per week, which at the end of June is at a cumulative level of over €4m. There remains continued uncertainty over a potential extension to the current rates waiver by the government and what funding will be provided to keep local authorities afloat.
Goods and services accounts for 28 per cent of the income for the 2020 budget and totals
€31.6m for 2020. This includes €16.9m for housing rents, €1.4m in housing loan interest payments and €2.9m for parking income.
Ms O’Neill stated that there had been some fluctuation in rent payments since the commencement of the emergency, but the government’s Covid wages subsidy seems to have protected this income source from a material shortfall for now. It’s anticipated that the impact will be in the region of one per cent for 2020 based on current patterns.
Similarly, she noted that there were 53 approved applications for the three-month mortgage break scheme, the financial impact of which is predicted to be in the region of €100k over the three month period. However, it’s possible this scheme could be extended further.
Parking charges usually bring in an average of €240k per month countywide, however, the cessation of charges from
March 27 to last Monday has resulted in a loss of approximately €720k over three months. The performance of this revenue stream for the remainder of 2020 will very much be informed by business activity and the path of the pandemic for the reminder of the year.
Of the remaining €10.4m budgeted for goods and services income, an assessment has shown that approximately €1.9m is at risk as a result of the public health emergency. This includes the likes of planning fees, civic amenity sites, harbour/marina income, fire safety certificates, library income and casual trading income.
Ms O’Neill pointed out that it is hoped that the period from April to June will represent the peak of income decline and that from this point forward the situation will be improved. However, she said:
‘It is realistic to assume that without any government intervention, and also assuming that there isn’t a resurgence of the virus, that levels of income for Wexford County Council for the financial year are likely to be impacted by a value in excess of €5m. A conservative estimate would be that the income loss would reduce to 50 per cent of the April to June impact for the remainder for the year, which would suggest that, without financial support, the loss of income could exceed €10m by the end of 2020.’
Looking at expenditure, Ms O’Neill said that it’s likely that some elements of the budgeted expenditure for 2020 will not now be able to progress. Of the €127m adopted operation budget for the council,
€43.5m is directly linked to grants received and it is unclear whether these grants will now materialise. €72.5m is assigned to non-discretionary costs including payroll, loan repayments, insurance, annual contracts and other items that ‘must’ be paid. This leaves €11m of discretionary budget which ‘could be reduced to mitigate income losses incurred’.
With around €700k already spent directly in dealing with Covid-19, Ms O’Neill anticipated that this will hit the €1m mark before long. This money, she said, was spent on things like technology to allow the organisation to work from home, PPE and works that have been required to prepare the organisation for reopening and a new way of dealing with customers and suppliers.
The overall impact of the emergency will be dependant on the level of government intervention and the depth of the recession that will be caused. Major concerns have also been expressed over the council’s capital programme with national spending set to be restricted in the coming years, however, Ms O’Neill believes we need to continue to invest in projects to come out the other side of any recession.
‘It is critical now more than ever that we work to protect and deliver the plans under our Economic & Community Development Programme for the county, which is largely funded by local resources and this will remain a focus for the council,’ Ms O’Neill said. ‘In particular, projects such as commercial property solutions, upgrading of tourist attractions, greenways and public amenities should greatly help the county to minimise the effects of the recession.’
In order to protect themselves against any cash-flow difficulties that may arise, the council approved an increase in their overdraft facility from €13m to €30m.
A MEETING between high ranking officials within Wexford County
Council and representatives of IT
Carlow took place on Friday afternoon with a view towards moving closer towards the procurement of a new site to house the college’s long awaited new Wexford Campus.
It is understood that the meeting saw council officials offer any assistance they can to get the project over the line and get a shovel in the ground. The council had previously submitted a host of potential sites for the campus to the college’s Board of Management and
Friday’s meeting took the form of a frank discussion on the future of the project.
Last week, in a letter sent to all staff members and students at the Wexford Campus, the college fired back at local representatives for publicly admonishing the institute in its approach to a new Wexford campus, stating that the institute remains committed to Wexford as they have been for the past 25 years.
Director of Services at Wexford County Council Tony Larkin revealed at last week’s Wexford County Council meeting that the meeting with IT Carlow representatives was planned to take place, in response to a request for an update from Cllr George Lawlor, who has been one of the college’s biggest critics.
‘Have we any advance on the situation with IT Carlow?’ asked Cllr Lawlor. ‘I was disappointed to read recently a headline in the Kerryman newspaper proclaiming “University Town Tralee”. It was written into the programme for government back in the day that a technological university would be set up in the South East specifically. Now we’re continually being passed by by others. For whatever reason the two bodies (IT Carlow and Waterford IT) are not bonding. It seems to be a case of a tuppence looking down on a penny.’
When Cllr Lawlor stated that IT Carlow representatives had refused to discuss the situation in the council chamber, Mr Larkin clarified that there was a delay in sending out the invitation and that the relevant parties only received the letters the day after the meeting had taken place.
Speaking ahead of the meeting, Mr Larkin said: ‘I hope that we can make progress and try to push on with this project. I’m very happy that they’ve agreed to come and meet us and we hope to be able to propose some solutions to push this on. I share the concerns of the members in relation to technical universities across the country, but the primary focus for now is to get the new campus sorted for Wexford.’
‘I’d welcome that this meeting is going to take place,’ said Cllr Lawlor. ‘You’ll have to excuse my scepticism. It’s been five years since the money was sanctioned for this campus to go ahead. Can we urge IT Carlow to put a timescale on this? I’m sure there are other colleges we could be talking to about setting up a campus here if this doesn’t come to pass.’