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Senate approval clears the way for sweeping changes to municipalities

Controversial laws that bring about sweeping changes to the way the Island's two municipalities operate were approved in the Upper House yesterday, despite protests from Opposition Senators.

The Municipalities Amendment Act 2013, which was passed by the House of Assembly last month following a heated and sometimes emotional debate, was finally approved by Senators by seven votes to three. All Senators voted on party lines, with two Independent Senators supporting the bill.

Opposition Senator Marc Daniels questioned Government's motives in rushing through the changes, characterising it as a move to control the City of Hamilton's $1 billion waterfront redevelopment project in the guise of good governance.

“This piece of legislation is not a piece of legislation that would create a single job,” he said.

“It is not a piece of legislation that really has anything to do with the urgency of right now but for one thing — and that is control of the waterfront development, Bermuda's biggest development in its recent history and probably the greatest development this country will see for decades if not centuries to come,” he told the Senate.

“In other words we are talking about one of the biggest money making ventures on the table for this country.”

Sen Daniels reminded the Senate that the then-Opposition United Bermuda Party had criticised the Progressive Labour Party's 2010 reforms as a “land grab” when no transfer of property was contemplated.

Those reforms enfranchised residents of the municipalities, ended the vote for businesses and abolished the rights of the councils to collect wharfage.

Sen Daniels said that the latest reforms dilutes the powers of the residents, and gives the Government control over the municipalities, while opening the way for the business class to regain power.

“There are special interests at work as it relates to this legislation. It's very clear for the populace to see. And we are using typical political words of change, or inclusion or fairness to try and justify what are very calculated attempts to do a takeover. And nothing can justify what is being put on the table.”

Senator Daniels criticised the Government for refusing the Corporation of Hamilton's request for more time to consult on their proposals.

“What we are seeing is an attempt by the Government to enact and exert control over the municipalities,” he said.

Turning to the business ratepayer vote, Sen Daniels said the rallying cry of the American Revolution — no taxation without representation — had been taken out of context by supporters of the reforms.

“That's a really odd analogy to draw because anyone can run for office.”

And he noted that owners of multiple businesses could get away with multiple votes under the new system.

He said residents had for decades been expected to trust that the merchant class, which dominated the Corporations, would take their interests into account.

“Where is the evidence that suggests that the individuals who the residents elected will take steps against the interests of business?” the Senator asked.

And Sen Daniels noted that businesses did not have the vote in other jurisdictions such as New York City.

“Why is this hybrid required in this jurisdiction?”

He described the legislation as a “very poignant attack on an administration.”

Deputy Mayor Donal Smith, Councilman George Scott and Larry Scott were in attendance for most of yesterday's debate.

Independent Senator James Jardine spoke in support of the bill, but admitted to some concerns about some of the provisions.

He noted that the businesses in the City contributed 43 percent of its revenue in taxes, and that some jurisdictions had seen businesses flee the cities because they had no say.

“I accept that money should not always be at the forefront of our thought but these percentages are so high and so meaningful that we cannot deny these people some say on a proportional basis on what goes on in our cities.”

But he also pointed out that, while the debate appeared focused on Front and Reid Street, the City of Hamilton business community included businesses in the North Hamilton area. The former councillor of the City of Hamilton said the Government's oversight powers over the disposition of lands owned by the Corporations gave him “the most difficulty.”

But he said: “What is clear to me is there is some concern obviously at Government levels about some of the issues that have gone on at the Corporation of Hamilton in particular.”

Ombudsman Arlene Brock has launched a systemic investigation into the affairs of the Corporation of Hamilton, citing concerns about governance.

Opposition Senators Diallo Rabain and Renee Ming echoed Sen Daniels' concerns about the ratepayer vote and alleged that Government had failed to consult with the electorate over the changes.

And they also said that any retroactive repealing of legal contracts could harm Bermuda's international reputation.

“Effectively we are being taken back, taken back to a property vote which is universally recognised as undemocratic,” Sen Rabain said.

Home Affairs Minister Michael Fahy explained that the changes came about after Government met with the Corporation of St George, which was underfunded.

“This was the beginning of looking at how we could help the Corporations in a number of different areas,” he said

“But if Government is going to give grants, should Government not have a say into how some of that money should be spent? We didn't want to turn the Corporations into quangos.”

He defended the decision to give ratepayers a vote, and disputed the claim that the interests of business were “diametrically opposed” to that of residents.

What is in the pipeline for municipalities

Among the sweeping changes of the Municipalities Amendment Act 2013, is the introduction of a hybrid dual tracked electoral system which gives ratepayers the right to vote, and provisions that sales of land held by the municipalities and leases exceeding 21 years to be submitted to the Minister and approved by Parliament.

It ends speculation about whether the controversial 262-year lease of 26 acres of waterfront property will be impacted, stating that the provision applies to all land deals and related agreements entered into since January 1 2012.

The Corporation of Hamilton leased waterfront property to developers Allied Development Partners in December last year.

It provides for voiding the agreements if they are not submitted to the Minister within 14 days. But it also provides for compensation to be paid to people or businesses that are affected.

The law contains a slew of good governance provisions, including a requirement that the Corporations submit a code of ethics and conduct for the Minister’s review but allowing for the Minister to disregard it and substitute it for another one if he considers it inadequate.

And Government grants to the Corporations now comes with strings attached, as the Minister can direct what taxpayers’ funds are to be used for and require evidence that the direction has been followed.

An infrastructure management plan to be submitted to the Minister annually will also be subject to revision by the Minister.

And Government can temporarily assume stewardship of municipal infrastructure which falls into disrepair if it considers it in the public interest.

Effective in 2015, municipal elections will be dual tracked — one for business rate payers, and another track for residents.

A Mayor and eight Councillors will constitute the corporations. Instead of appointing a deputy, the Mayor would be required to appoint an acting mayor when absent, failing which the Councillors will elect one from among themselves.

But the act returns the collection of wharfage and port dues to the Corporations.

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Published October 10, 2013 at 9:00 am (Updated October 10, 2013 at 1:39 am)

Senate approval clears the way for sweeping changes to municipalities

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