The Manager of North Tipperary County Council Mr Joe MacGrath has told members that the Budget adopted for 2011 for the county has been framed against the backdrop of the four year National Recovery Plan which provides for a return to sustainable growth in our economy. And, all services have been cut to the very bone with the council just about able to provide necessary finances to run operations for the coming year.
This Plan sets out a four year strategy to address budgetary imbalances and measures include a €15 billion budgetary correction over 4 years, comprising of a reduction of €10 billion in public expenditure and €5 billion in tax and revenue raising. An adjustment of €6 billion was introduced in the recent national budget announced on the 7th December and the immediate effect of the national budgetary provisions on the local authority budget is a further reduction in local government funding. Over the four year period 2008 to 2011, the Council`s local government grant has decreased by over 20%.
"North Tipperary County Council is highly dependant on central government funding and accordingly any adjustment in funding levels negatively impacts on our finances and capacity to deliver services at current levels. The Council is statutorily required to prepare a balanced budget, which means that expenditure provisions must match income projections. In addition to a reduction of funding from central government, all major local income sources are reducing as a consequence of reduced local economic activity. Given the significant reduction in the level of income available to this Council, there is an unavoidable necessity to reduce the Council's expenditure in order to achieve a balanced budget and assure continuity in the delivery of essential local services. The application of this objective has necessitated reduced expenditure across all divisions. In many cases, the level of expenditure provided represents the minimum necessary to support the delivery of essential services," Mr MacGrath told members in his annual Manager's Statement.
The primary objectives of the Budget as set out by the Manager are to (1) assure the continued delivery of essential and statutory services provided by the County Council (2) to ensure continuity in the delivery of other services at present service levels, where possible, subject to the requirement on local authorities to maintain a balanced budget. (3) to continue present permanent employment at levels necessary to assure delivery of essential and other services; and (4) to make a positive contribution to economic recovery at a local level.
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Notwithstanding the very significant financial challenges facing the county, North Tipperary County Council will continue to assist local economic recovery through a number of measures including:
n a further reduction of 1% in commercial rates, bringing the revised rate to 60.126 and recording the second lowest rate increase for all County and City Councils since 2005. *maintaining charges for services generally at existing levels. In particular, water charges and parking charges will remain unchanged.
n maintaining "own resources" financial investment in roads infrastructure at current levels.*establishment of a "Business Support Service" to advise new and existing enterprise seeking planning and/or environmental consents.
n introduction of a tourism initiative to promote visitor numbers to the county, details of which will be presented to the Council in the first quarter of 2011.
n continued support for our communities in retaining community grant aid generally at existing levels.
n continued support for our vibrant arts and local sports programmes.
The council's Local Government Fund allocation has fallen substantially since the high of 2008 when €20,481,309 was granted. The 2011 allocation amounted to €16,373,536 Euro which means that over the four year period the Local Government Fund Allocation has been reduced by 20.6% or €4,209,095.
The Draft Budget for 2011 provides for an overall expenditure of €66,351,760, which represents a reduction of €1,388,430 (or 2.05%) on the corresponding 2010 figure. However, given that some expenditure increases are in areas which are fully recoupable e.g. higher education grants, rental accommodation scheme, the real reduction in expenditure is 4.93
Mr MacGrath told members that payroll costs for 2011 are estimated at €19.6m, which represents 94.7% of the equivalent 2010 figure and approximately 30% of the total expenditure in the Draft Budget for 2011. Over a four year period, payroll costs will have reduced from e22.6m to €19.6m, a reduction of 13.3%. Payroll costs for North Tipperary County Council expressed as a percentage of the overall revenue budget compare favourably with other local authorities.
"Over the past number of years the council has experienced reduced resources and yet in addressing these challenges, the Council and the staff have shown great resilience," he said.
As in previous years, the Council will not be informed of the 2011 Road Grant Allocations from the Department of Transport and the National Roads Authority until early in the New Year. However, a budgeted amount for 2011 which is 5% down on the actual 2010 allocation is included. If the actual allocation differs from this, it will be necessary to adjust the budget accordingly. Notwithstanding the exceptional financial challenges, North Tipperary County Council continues to invest significant own resources in the roads programme. In addition to the allocation of approximately €1.3 million of Development Levies in 2011 on road schemes already outlined to Members, a further sum of €2,170,207 from "own funds" is being provided through the revenue budget which is equal to the provision made in the 2010 budget. This is designed to protect the year on year investment in the County`s roads infrastructure.
New Department of Transport (DOT) guidelines relating to Regional and Local Roads were issued mid-year to commence with effect from December 2010 (the start of the new Roads year). The impact of the new guidelines will be to significantly reduce the overheads that can be recovered on grant-aided roads programmes together with restrictions of certain expense categories. Following strong representations by the County and City Managers Association, the DOT granted some respite on the original measures, but it is estimated that these revised guidelines will cost approximately €160,000 in 2011. This increased cost will have to be met out of the councils own revenue funding.
Difficult Year for Business
"I am conscious that 2010 has been a very difficult year for businesses. The Draft Budget has been prepared on the basis of a 1% reduction in the Commercial Rate to 60.126. This reduction, together with the 5% reduction applied in 2010, means that since 2005 the commercial rate has increased by 2.92%, the second lowest of all County and City Councils. The Annual Rate of Valuation for County and City Councils for 2010 and the Net Effective Valuation shows North Tipperary lying in the lower third of the national table. I am not proposing any increase in other charges for 2011 in light of the current economic climate.
Rents reviews on Council houses, which are assessed on the basis of household income, will take cognisance of the revised social welfare rates recently announced in the national budget," Mr McGrath said.
At a Special Meeting of the Council held in November a decision was taken to discontinue landfilling at Ballaghveny Landfill once the current cell (Cell 10a) is full. It is estimated that there is approximately 10,000 tonnes capacity left in the cell and that it will be full in early 2011. It has also been decided that the Civic Amenity facility at the landfill will remain open for two days (Friday and Saturday) each week and that the facility will continue to accept the full range of recyclable materials. The facility will also accept, at a charge, bags of segregated household waste. The operation of the Civic Amenity Facility will be fully reviewed in the third quarter of 2011. Consultants have been instructed to explore, through the public procurement process, the sale or lease of the landfill facility and the Members will be kept informed of progress. The Draft Budget makes financial provision to ensure the implementation of these decisions.
For landfill operations, a figure of 302,478 Euro has been provided for the operation and maintenance of the landfill for a period of 2011 in compliance with the EPA licence for the site. Loan charges of 412,600 are also included while landfill aftercare costs of 140,000 Euro have been included from a capital provision for the aftercare of the landfill.
The Manager also said that the Council was informed by the Department of the Environment, Heritage and Local Government (DEHLG) that cost savings were to be achieved in 2009 and following years. These included reductions in payroll costs, consultancy costs, advertising, etc. Payroll reductions have already been outlined.
"Since the notification of the requirement to achieve these measures the financial situation has significantly deteriorated, with a consequent necessity to reduce expenditures year-by-year. In particular, there has been a significant reduction in payroll through the management of vacancies, application of the incentivised career break scheme, the application of the early retirement scheme and staff term time leave. Other savings have been achieved through revised procurement measures, reduction in agreed rates for certain suppliers and services, etc. These measures further accentuated existing cost reduction initiatives particularly in the area of energy costs and efficiencies."
The Budget contains allocations across the board for various programmes inlcuding:
Provision of €762,304 for the maintenance of local authority housing.
Continued provision of €1,200,000 for disabled persons grants with capacity for any additional funding that may be made available to the Council during the year from national sources.
Increased provision of €769,954 for the Rental Accommodation Scheme (RAS).
Provision of €2,170,207 from own funds towards the roads programme.
Increase by 12% to €2,677,275 in the provision for direct costs of the fire service in 2011.
Increase in the provision for fire service training by €185,000
Continued provision of €70,000 for Tidy Towns / Tidy Estates
Provision of €4,391,943 for direct operation costs for the supply of public water and provision of €3,849,368 for the direct operation costs of public sewerage schemes.
Provision of €40,000 in respect of unfinished housing estates.
Continued provision of €130,000 in respect of Enforcement Costs.
Continued provision of €70,000 for Burial Ground Grants
Provision of €131,500 for Arts Grants and the Arts Programme.
Provision of €147,510 for the Regional Arts Centre, Thurles.
Provision of €135,000 in respect of contribution to Roscrea, Thurles and Nenagh Swimming Pool operating costs.
Continued provision of €40,000 to North Tipperary Sports Partnership.
"The preparation of the 2011 Draft Budget has been extremely challenging. As indicated, expenditure levels have now been set at the lowest possible level in order to assure the continued delivery of essential services. Notwithstanding these challenges, North Tipperary County Council will continue to deliver these services and assist in stimulating local economic activity. I wish to thank the members of the Corporate Policy Group for their input into the preparation of the Draft Budget and I would also like to record my appreciation to the Management Team and all staff, with particular thanks to Mr. Liam McCarthy, Head of Finance and his staff for their assistance in the preparation of this Draft Budget," the Manager said.
The Budget was unanimously adopted by members after they had deliberated over it for three hours. There had also been a private pre-Budget workshop for members to allow them to debate the figures and issues in advance of Budget day.