Council approves overdraft application of €20m following projected income loss of €9m due to Covid-19

Jessica Thompson

Reporter:

Jessica Thompson

Email:

jessica.thompson@longfordleader.ie

The offices of Longford County Council. Photo: Michelle Ghee. www.gphotos.ie

Without a strong and clear remedy and funding mechanism from national funding sources to assist Local Authorities and ratepayers, the longer term impact for local economic recovery and Local Government Services, once the country starts to emerge from the current Covid-19 crisis, could be devastating for the country as a whole, according to Director of Finance for Longford County Council, John McKeon.

Mr McKeon gave a presentation at the May meeting of Longford County Council last week and revealed that the loss of rates to the council at the moment is over an estimated €495,000 per month, as 55% of ratepayers in Longford have been drastically affected by the Covid-19 pandemic.

Projected figures indicate that the council will suffer a loss of €9m by the end of the year, due to the Covid-19 restrictions.
Since the beginning of the pandemic, the council has lost income from rates and from goods and services such as parking facilities, etc.

The figures Mr McKeon presented at last week’s meetings are projected figures only, as of mid-May, but if the crisis deepends, deficits will become larger.

The monthly loss of income so far has been €254,000 due to loss of library fees (€3,000), roads grants jobs (€104,000), Leisure Centre (€60,000), planning charges (€17,000) and parking charges (€70,000).

Meanwhile, additional expenses incurred since the beginning of the Covid-19 restrictions total €388,000 so far, with a significant number of ongoing monthly costs.

Of that fund, there were a number of once-off costs including ICT costs of €320,000, to set up council staff to work from home. There is a monthly cost of €20,000 for ICT support.

The setting up of Longford’s Covid-19 test centre incurred a bill of €10,000, while PPE equipment provided by the council amounts to €8,000 per month.

Advertising and signage costs in the county came to a total of €15,000 and €10,000 respectively, while security in the county is totalling €5,000 per month.

The loss of rates income (€5.5m) and loss of goods and services income (€2.9m) couple with the increased expenditure (€0.7m) will see a projected budgetary shortfall of €9.1m this year.

For that reason, the council was last week asked to approve an application to increase overdraft approval to €20m as a “prudent precautionary motive only”.

This is a significantly higher than the usual annual overdraft of €5m, but due to dire circumstances in the current Covid-19 crisis, elected councillors agreed to apply for the increase.

Cathaoirleach of Longford County Council Gerard Farrell said that this was a good decision on the council’s behalf.

“It might not all be used but it’s the second half of the year when money starts going out,” he told the Leader.

“It was a good idea and I have to commend John McKeon.”