MEMBERS of Donegal County Council have blocked the proposed sale of the old Bacon Company site in Letterkenny, pending a full audit of council owned assets.
Councillor Dessie Larkin objected to the ¤6.5 million sale of the 4.3 acre site at Pearse Road, the proceeds from which had been earmarked to offset council loans. He was supported by Cllr Ciaran Brogan.
The property had been offered for auction at the end of March. Members were informed that the highest bid at auction was ¤4.9 million. As the reserve (¤6.5 million) was not reached, the highest bidder was brought into a separate room to determine if he would increase his bid to meet the reserve.
However, he was unwilling and members were told that the property was then withdrawn from auction.
Subsequently, on the same day, Dermot Gildea made a conditional offer on behalf of Dermot Gildea, MBC Building Contractors Limited, John Gildea, Patrick Gildea, Terence Gildea and Conal Gildea of Meenglass, Ballybofey.
The offer was for ¤6.5 million and was conditional on a number of clauses - one of which was the Council's immediate acceptance of this offer, subject to passing a resolution to Section 211 of the Planning and Development Act 200 and Section 183 of the Local Government Act 2001.
The bidder also had to pay a ten per cent deposit while the Council inserted a clause which allowed them to retain the use of the Civil Defence building (which is on the site) until the end of March 2008.
The site had been used as an area office, stores for various sections of the County Council, Letterkenny Town Council and Civil Defence headquarters.
Cllr Larkin insisted that the issue should have come before members of Letterkenny Electoral Area for consideration before being put to a full council meeting.
In reply, Mr McLoone said he didn't realise that the disposal of the site was at issue.
"At this stage we've made an offer to the named parties," Mr McLoone said.
Cllr Brogan said that he was still waiting for an audit of all council properties, two years after first making a request.
Referring to the Council's annual financial statement for 2007, Mr McLoone said that the disposal of the lands at Pearse Road had been on the agenda for 'several' years. He insisted that he had acted in good faith at all stages of the process.
"These properties are now surplus to requirements and monies from the sale were to go towards offsetting the cost of the new Public Service Centres. That's the whole principal of this.
"We've been criticised in recent Auditor reports. We're running at a deficit and the only way we'll get our finances balanced is to reduce our loan charges. The property was put on the market on that basis. I never thought it was an issue. The full audit will be available in July," Mr McLoone said.
"We borrowed on the basis that we would balance our books when the replacement property was in place," the Manager reiterated.
Cllr JJ Reid said it was sad to note that the council was selling off assets at a time of plenty. However, Mr McLoone dismissed suggestions that the council was 'selling off the family silver'.
"It's easy to have bread and eat it. Unfortunately the reality is we have to pay for all this. We wrote down borrowings to pay for that," Mr McLoone said.
Cllr Larkin expressed concern that the members views had been 'ignored'.
"This proposal has been put forward and seconded and that should be the end of the story. We've asked that it be put back to the next Letterkenny Electoral Area meeting and that should be that," Cllr Larkin said.
"No more assets should be sold until we've a full audit of assets - who owns what, where. The sale of this site was never discussed. There's even talk that the new council offices in Letterkenny have been built on the line of a new proposed road from Bonagee. The whole thing is a sham," he said.
Mr McLoone said that he rejected such claims out of hand. He said he regretted the sale had not gone through the Letterkenny EA meeting but pointed to the fact that ¤40 million worth of new Council offices had been built in recent years and had still to be paid for.
"I'm being told that I have to balance the books and I was doing this in good faith and for no other reason. I will again be recommending this year that Donegal County Council has no option but to reduce its mortgage and non mortgage loans. We have to get our act together and balance the books," he warned.
CLlr Larkin - "We were duped. The first we knew about the sale of this site is when the signs went up outside," Cllr Larkin claimed.
Cllr Pearse Doherty expressed concern about the financial implications if the Council does not dispose of the site mid-term.
"There is talk of a four per cent rise in rates if we don't start selling our assets," Cllr Doherty said.
Mr McLoone said the members had signed up to sell off ¤12 million of assets during the course of 2007 to help balance the books. He added that failure to do so would equate to a 5.62 per cent increase on rates.
Mayor Enda Bonner said that, ultimately, the sale of the Old Bacon factory site would come before a full council meeting for consideration.
However, the members agreed to Cllr Larkin's request to put the matter back to the next meeting of LEA.
