Who will pay Fermoy Town Council's debt?
Money is almost always a sore point with any town council and funding is perceived to be next to impossible to get, but as the Fermoy Town Council had their final hurrah, it was revealed that they will not only be leaving a legacy behind, but a hefty debt as well.
Town manager Niall Healy, told councillors at the final meeting when Cllr Seamus Coleman raised the issue of getting funding for a gazebo in the town, that the bank balance was not healthy, while the most accurate statement from the meeting might have been when Olive Corcoran stated that 'the bank is broke'.
It would seem that the town council managed to get tangled up in financial confusion, as the Town Manager explained that the town council has one bank account and that bank account has been in deficit for the last number of months.
Breaking it down, he said that while it may have 'appeared' that they had a credit balance on the account, the reality is that if the funds in the bank account don't match or exceed that, it's only 'a credit balance in principle'.
"It all comes down to what you have in your bank account at any point in time," Mr Healy added.
It would seem that the council were caught by the age old predicament of spending money they didn't have - a similar situation some people get into when they pay rent or the mortgage and go on holidays and only come home to realise they have spent money that they didn't really have, because some payments hadn't yet come out of their account. It was a little worrying to say the least that the finances of the town council were not better managed or monitored.
IN AN OVERDRAFT SITUATION
"We're in an overdraft situation," he told councillors, to which Seamus Coleman responded by saying that the town manager's words captured 'the charade that is our budget year on year'.
The town manager explained that the bank account has to fund two programmes, the revenue programme which is the day to day running of the organisation and the capital programme for works, which was agreed by the council late last year.
"The reality is you can only live within your means and we're entering into an overdraft situation, which is extremely serious in itself. It doesn't happen that often and thankfully it doesn't happen in the case of that many town councils, but this town council is one such council that is in overdraft. Quite simply, we have to be very conscious of any commitments we enter into," Niall Healy added.
"We're in a deficit situation right now and we basically have to cut our cloth to measure," he said, informing the meeting that they would not be able to afford the gazebo that Cllr Coleman was seeking.
Seamus Coleman described the budget, which took a number of meetings to pass this year, as a 'paper exercise, a joke really'. Pa O'Driscoll reiterated this point, saying that the budget was a paper pushing exercise.
"We went through a budget less than four or five months ago, one which to the annoyance of many of the members here, I spent a lot of time questioning balances, expenditure, income and so on and so forth. Not once was it mentioned during that discussion that the potential was there for a certain balance to have to be used to balance out another balance," he said.
WHERE WILL SALARY MONEY COME FROM?
He added that at the time of the budget, a decision (which he disagreed with), was made to take €30,000 from wages and salaries, but he said that if people returned to work and the town council had a full compliment of staff, that €30,000 would need to be found.
"My understanding is now that has come to pass. Where now, when we're talking about €3,000 for a gazebo, will the €30,000 come from?", he asked the town manager.
"We now have a €30,000 hole in our budget. We were fighting here for days and days for €10,000 and I can see a €30,000 hole now," he added, arguing that the only way to find that money is to reduce another service.
The Town Manager acknowledged the 'tortuous' budget process that the council went through and he said that to achieve a balance, 'things went to the wire'.
"Whether you'd call that a hole that we dug for ourselves or not, is open to different views, but the reality is that if you're in a financial hole, the last thing you do is to continue digging," the town manager said.
HOW WILL THE DEBT BE PAID?
The question must be asked now, how will the debt that the town council left behind be paid and, like with most debts, the national one included, cuts must presumably be made?
The councillors made no reference to how it will be paid, as there was a presumption that Cork County Council would obligingly foot the bill and perhaps they will, but where will that money come from?
When Cork County Council potentially increase business rates, when charges and taxes go up or when areas of the county lose services and amenities, will the Fermoy Town Council debt be to blame?
Throwing a spanner into the works, it seemed that the outgoing and final mayor Olive Corcoran, rather than express concern over the overdraft and who would be paying off that debt, she saw a light at the end of the tunnel and took the stance that, seen as they were already in debt, why couldn't they go into more debt and buy the things they wanted for the town?
"The banks have screwed us, the politicians have thrown that back on the taxpayer, can we not say here, there's a deficit there anyway, there's a loan on the building here anyway, Cork County Council have to pay it. Can we not say, let the deficit be there and let Cork County Council fund it? We don't work for Cork County Council and our interest is only the town of Fermoy," the mayor argued.
She added that the county councils are 'wasting our money hand over fist' and she questioned what would be wrong with the town council making a decision for the benefit of the town!
Published:
Friday 6th June 11:16am
