Donegal County Council last year recorded its first reduction in income for almost a decade.
An increase in payroll and the writing off of over 6 million euro in business rates are some of key factors for the loss of income.
The was also a reduction in income from water charges, which has been blamed on customers conserving water.
A Donegal County Councillor is warning that the situation may get much worse before it improves.
Fianna Fail's Ciaran Brogan says changes to how water is provided and how the council's work is funded may have a detrimental effect going forwards: