Council on budget for first six months but facing inflationary challenges

Economic recovery from the pandemic has been rapid, and activity is now 5.6 per cent above pre-pandemic levels, the county council head of finance told the finance committee meeting last week.

Jimmy Dalton said the evidence points to limited, if any, permanent damage (‘scarring’) to the economy from the pandemic – however, he pointed out that the pandemic cost the exchequer something in the region of €33 billion.

Mr Dalton reported that the council is on budget for the first six months, but facing challenges. Some income streams are performing strongly – planning fees, leisure operations, NPPR (non-principal private residence) while gratuities and some operational costs are running ahead of budget.

Rates and housing rents income is in line with budget. Refurbishing council houses when they become vacant is a huge drain on their resources. They have spent in the region of €750,000 on such works, in addition to the planned maintenance programme, Mr Dalton said.

Income from NPPR is well in excess of budget at 125%. Income from Fire Certificate fees of €73,463 is behind budget, but planning fees income of €341,054 (114%) is running well ahead of budget. There were 18 applications with fees greater than €5,000 in the first two quarters, generating income of just over €283,500.

Some income sources continue to be affected by the pandemic, including the swimming pool in Mullingar, where income is running at 68% of pre-pandemic levels. Belvedere House and Gardens and Athlone Castle have experienced a welcome increase in activity in 2022.

The planning fee for the film studio in Mullingar was €38,000, the maximum fee as set in legislation, Cllr Mick Dollard was advised. Mr Dalton could not speak with authority on what the development contributions would be as the application is out for consultation and while he would not like to speculate, he said they would be significant. He joked that he would like to see half a dozen such applications.

Cllr John Shaw said construction costs are going out of control and was worried that it would affect projects that have been tendered for under Just Transition, Regeneration and Social Housing schemes. Mr Dalton said the current rate of inflation would not be a deal breaker for someone looking at a development that is going to take years to complete. The effect of inflation on them is likely to be less than the members might think.

Cllr Frank McDermott said there were "serious issues facing us all before the year is out".

Refering to an extra €200,000 being charged to the council after the contract was signed, he asked: "Is the contract worthless?"

Mr Dalton assured him the contract was not useless. He said the expert advice for the sector was to enter a flexible pricing agreement until they decided to fix the rate at the appropriate time as prices may drop.

Cllr Hazel Smyth urged that the council explore alternative energy sources – and she was assured that the council are constantly looking at all ways of reducing and mitigating energy costs. Cllr Frankie Keena was told that plans to put solar panels on civic buildings were proceeding and a report will be presented to the next meeting.

Cllr Smyth was advised that revenue from the new Vacant Property tax will go to the central exchequer, not the council.

Cllr Frankie Keena asked that the Mount Temple village and rural Coosan be considered under the rural water programme. David Jones, director of services, said that those schemes will be assessed to see if they meet the criteria.

When they meet in September to consider their budget 2023, councillors will review the basic rate of Local Property Tax for the area.