The Corporation of Hamilton is to mount a legal challenge to recent laws changing the way the municipality operates — and is paying out hundreds of thousands of dollars to retain a top UK law firm for the case.

The Municipalities Amendment Act 2013 was passed in the Senate earlier this month, bringing in a raft of new rules governing the Corporations of Hamilton and St George’s. Among the changes is the introduction of a hybrid dual tracked electoral system which gives ratepayers the right to vote, while sales of municipality land and leases exceeding 21 years must be submitted to the Minister of Home Affairs and approved by Parliament.

Hamilton Mayor Graeme Outerbridge has described the Act as “very dictatorial” and pledged to “fight this thing all the way”.

And at a special Corporation board meeting last Friday, councillors agreed to set aside $250,000 as a retainer for the services of London-based law firm Blackstone “to pursue all avenues of remedy and redress before the courts”. The Corporation is also seeking to challenge amendments brought in by the former Government in 2010.

Friday’s meeting was attended by five of the Corporation’s eight councillors — Mayor Outerbridge, Deputy Mayor Donal Smith, Alderman Carlton Simmons, and councillors Keith Davis and George Scott. They voted unanimously to support the resolution to hire Blackstone.

Minutes from the meeting show that Blackstone was selected after members were sent copies of an independent review of top UK legal companies.

“Blackstone is the best law firm in public law and CoH was looking to engage them,” the minutes state.

“The Council would be advancing their local attorneys [J2] an estimated sum of $250K as a retainer, doing half of that in the first instance ($125K) so that the process of engaging could move forward.”

The minutes conclude that “the Board approve to engage J2 law Chambers in concert with Blackstone Law Chambers as per the terms of the letter of engagement dated October 11 2013 by J2 Chambers, to advance the challenge to Government on the 2010 and 2013 Municipality Reform Acts and their total impact on the Corporation of Hamilton on their autonomy and finance.”

Corporation accounts show that the municipality, which had allocated $105,000 for legal expenses for 2013, had already spent $120,000 in legal fees in the first eight months of this year.

In addition, it funnelled $850,000 into a Members’ Expenses account, which Mr Outerbridge later claimed was set aside for further legal costs. Records show that, by the end of August, almost $480,000 of that fund had been spent. Corporation insiders claim the funds have been wasted on “boondoggles”, such as sending a corporation delegation to a conference in Colombia, and while Mr Outerbridge insisted that the money has been spent on further legal costs, he has yet to provide a promised breakdown of how the money has been spent.

Minutes from Friday’s meeting state that Alderman Simmons pointed out that funding the legal challenge “would have to be factored into the budget going forward”.

The notes added that the municipality “would probably be spending close to $1M in this fiscal year to figure out what is going to happen with the Municipality side of things”.

The former administration ring-fenced $1 million to fund a possible challenge to new laws regulating the municipalities passed in 2010. The funds were put into a trust but never spent and were returned to the Corporation’s coffers after the new Team Hamilton administration was elected in May 2012.

But insiders claim those funds have now been spent on other projects that have incurred heavy legal costs, such as the signing of a 262-year lease with a developer to upgrade the City’s waterfront. Mr Outerbridge and Mr Smith were also in court recently on contempt charges brought by Ombudsman Arlene Brock, who alleged the two men had failed to cooperate with her investigation into the Corporation’s management practices. Ms Brock’s allegation was upheld by Chief Justice Ian Kawaley.

The timing of last Friday’s meeting meant that none of the five elected officials who attended it could meet with Home Affairs Minister Michael Fahy. The Minister had earlier invited all representatives from both municipalities to meet for a discussion on how the new law will be implemented. That meeting also took place on Friday afternoon, clashing with the Corporation’s own special meeting.

Yesterday The Royal Gazette e-mailed questions, regarding the legal challenge, to the Corporation. In response Mayor Outerbridge said: “The City of Hamilton is currently in the middle of the 2014 budget process. No timeline was given to The Royal Gazette on when the figures will be shared. We will do so in due course.”