The Department of the Environment has failed to respond to a letter from Dublin City Council warning about the council's deteriorating financial situation.
According to a letter sent from the council's head of finance, Kathy Quinn, to Geraldine Tallon of the Department of the Environment, Heritage and Local Government, a copy of which has been seen by The Irish Times, the annual cost of its pensions liabilities stood at €57 million annually as of 2005.
Citing a recent report by the Department of Finance, it states that this cost will rise to €100 million by 2035. According to that report, the increase in pension liabilities "is less for Dublin City Council than the wider public service. This reduced rate of increase is attributed to tighter control of staff numbers."
The letter has been sent on behalf of the council's finance strategic policy committee to request that officials of the department meet with officials of the Department of Finance on finding a way to fund the rising liabilities.
In the absence of assistance, it states, the extra cost of projected extra liabilities will either force up commercial rates or displace essential services.
Under current arrangements, increases in pension costs are not funded by central Government, but rather are financed through commercial rates.
According to the letter, the extra cost of pension liabilities projected for 2035, some €43 million, exceeds "the entire public water supply service [€40.2 million spend in 2005 values] or the entire public sewerage supply service [€41 million spend in 2005 values]".
The letter is dated January 24th and follows a meeting held on January 18th between members of the finance committee and John Reilly of the Department of Finance, who performed the original calculations. Council sources say the letter has not been responded to, nor acknowledged, and it has agreed to write to the department again repeating its request.
Fine Gael councillor Naoise Ó Muirí said government officials were deliberately avoiding dealing with the issue. "Department of the Environment officials seem to be more interested in burying their heads in the sand than in even acknowledging that a massive problem exists. As all DoE officials will eventually be recipients of index-linked defined-benefit pensions, do they have a vested interest in avoiding the issue altogether?", he asked.