With a drop in rates and other revenue streams – and the need to ramp up some services – the council will have to turn to a bail-out from central government, say councillors.
Estimates so far are really rough – and many variables unknown – but it looks like Dublin City Council’s annual budget could be €166 million short this year because of the impact of Covid-19.
That’s based on a €134 million year-end loss on commercial rates and €32 million in other income sources such as parking fees and social-housing rents, says Social Democrats Councillor Catherine Stocker.
“That is an absolute estimate because we just don’t know. We don’t know how long this will go on for,” she said, on Tuesday.
What it does show though, she says, is that the council will need a bailout from the central government. “There will have to be significant government intervention,” said Stocker.
A spokesperson for the Department of Housing, Planning and Local Government said that Minister Eoghan Murphy has said the government plans to support local government with “cash-flow support measures”.
It’s working with councils to quantify the financial impact of income lost and extra spending as part of their Covid-19 responses, they said.
In November 2019, councillors passed a budget of €1.026 billion for the coming year.
Roughly one-third of the council’s budget comes from grants from the central government, while two-thirds is made up of money from commercial rates, services, social tenants’ rent and other streams.
Dublin City Council is engaging “in a sympathetic and supportive manner” with those businesses who pay these commercial rates to the council and who are struggling, said a spokesperson.
There are 20,500 rate payers in the city but, at the moment, figures aren’t available for the number of businesses applying to defer or restructure, the council said.
“Businesses are engaging on a daily basis, and it is expected that it will be a number of weeks before an accurate position is representative of this situation,” said the spokesperson.
Says Sinn Féin Councillor Séamas McGrattan, chair of Dublin City Council’s finance committee: “We are encouraging all businesses to contact the rate collector just to work it out.”
Other streams affected include income from car parking. That was set at an expected net contribution of €23 million in the city’s budget for 2020, says independent Councillor Nial Ring.
80 percent of this parking fee income will drop this month because of Covid-19, Ring estimates.
On the other side of the balance sheet, spending on some services is likely to have gone up too, councillors say.
The fire brigade could require more money from the budget, says McGrattan of Sinn Féin.
Fianna Fáil Councillor Mary Fitzpatrick said that the homeless budget has expanded, as the homeless section has had to make accommodation available for people who are homeless and need to self-isolate. “This was a significant additional cost.”
Many of the questions about how to balance the books will likely start to be addressed at the council’s next finance committee meeting, says Fine Gael Councillor Paddy McCartan.
At the moment, that’s pencilled in for May, but that could change, too.
“Those issues will have to be addressed then,” he says.
“We’re just coming to terms with this over the past few weeks,” says McCartan.
It could be some time, too, before an accurate picture of the scale of the hit to the council budget is known, says Stocker of the Social Democrats. “There’s so many unknown variables.”
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