Balancing the books — Council’s wage bill to increase by €500k next year following Haddington Road Agreement

Monday evening’s budget meeting at City Hall is sure to be fraught with tension as city CEO Brendan McGrath attempts to pass what he has described as a ‘very, very difficult budget to balance’. 

Speaking at a media briefing on the issue yesterday Mr McGrath outlined that due to the perception that the economy is starting to grow again, public expectation regarding the provision of services has also grown, and that comes at a significant cost. The city’s budget is just under €76 million and there will be no extra funding coming from central Government this year, because as Mr McGrath frankly pointed out “the money is simply not there. While Ireland’s economy is improving, we are still borrowing a huge amount of money to keep this country afloat, so while things have improved a little, there is certainly a long way to go.”

In recent years the Galway City Council - similar to every local authority in the country - is not allowed run deficits and is legally obliged to operate within budget. 

As has been touted in recent days, the most controversial aspect of this year’s budget will certainly be the proposed rates increase. Officials are proposing a three per cent increase which will yield extra revenue to the tune of €1.05 million. Councillors have the discretion to pass or resist this recommendation on Monday evening. Ratepayers will undoubtedly be unhappy about this move, but the council’s defence is that rates have remained unchanged for five years and at a current figure of 65.46 in the euro, Galway City Council’s rate is the lowest of any urban area in Ireland - bar Dublin.

Rates incomes contributes to in excess of 47 per cent of the council’s annual revenue. The money is used for services such as street cleaning, sanitation, pipes network, libraries, fire services, the city marketing fund, and the Floral City initiative.

Mr McGrath spoke of expenditure demands being extensive despite income not growing to the same extent which has necessitated the rates rise. Increases in public sector pay, and pension changes following the Haddington Road Agreement mean the council’s wage bill will rise by just under €500,000 next year.

Elsewhere, a provision for increased costs of €150,000 has been made to ensure there is adequate funding to provide emergency accommodation for the homeless, while a new set of policies for the operation of the fire service will cost the council €200,000 in 2016. The local authority will spend more than €600,000 in interest on loans that were taken out to purchase land during the boom years. The CEO also referenced increased costs associated with ICT, CCTV, and Sports Capital Grants - which are only sanctioned on the basis of matching funding being made available. The council will spend €200,000 on property tax next year to cover its stock of 2,100 houses, due to the fact it is a landlord based tax.

New cemetery for Galway

Mr McGrath also announced that money was being set aside in the 2016 budget to help fund a new cemetery. “The city is going to need a new burial ground in the next three to four years. It is likely to cost around two million. We are proposing to put aside €100,000 next year and €200,000 the following year. The disposal of the leasehold interest in Royal Tara which will yield €535,000 will also go towards funding the development. We are actively looking at sites as we speak.”

Another area of additional expenditure lies with the former Rent Supplement scheme. The roll out of this scheme will now be the responsibility of local authorities and in future it will be known as the Housing Assistance Payment (HAP ). This requires additional staffing resources and the council has been given permission to employ five additional people at a total cost of €300,000. 

Brendan McGrath finished his briefing by outlining his wish to enhance the experience of everyone living in and visiting Galway. “It is essential that key services continue to be delivered to the highest standard. The quality of life in Galway is world renowned and it is imperative for future economic growth that the quality of life in Galway is maintained. As a council our wish is to to make Galway the best place to live and work in Ireland.”

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