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City mayor welcomes profit of $500,000

Financial outlook: Charles Gosling, the Mayor of Hamilton

The Corporation of Hamilton’s latest financial statements showing the city made a profit of just over $500,000 in 2015 have been welcomed by Mayor Charles Gosling.

But Mr Gosling lamented the haemorrhaging of lost parking fees and the $18 million guarantee owed to Mexico Infrastructure Finance as significant threats to the corporation’s financial sustainability.

In 2015 the corporation’s revenue exceeded expenditure by $529,808, while total revenues had increased from 2014 to 2015 by $1 million thanks in large part due to the reinstatement of wharfage fees.

“It is clear Bermuda has begun its slow recovery out of the recession, evidenced by the increase in wharfage revenues,” Mr Gosling said.

“That alone should give some cheer to the entire community.

“Our challenge on taking office has not disappeared. The council is committed to resolve the repayment of the $18 million guarantee entered into by the previous administration and ensuring our staff’s employment is not directly threatened by the legal issues surrounding that particular issue.”

The Corporation is in negotiations to acquire a bank loan to settle this debt.

However, in June it submitted an application to the courts to overturn the summary judgment of $18 million made in May 2015 by the Chief Justice on the basis that the transaction with MIF was outside the remit of the Corporation.

The 2015 increase in wharfage revenue was partly offset by a significant decline in car park revenue as a result of the Chief Justice’s ruling in November 2014 that removed the Corporation’s ability to clamp vehicles.

Car park revenue was down $903,000 from $4.3 million in 2014 to $3.4 million in 2015, and continues to decline in 2016.

Mr Gosling added: “While we have been able to increase our borrowing capacity by 50 per cent, we continue to be gravely challenged with our ability to repay any new debt out of income. We have yet to recover the parking revenue lost by the amendments to the Municipalities Act in 2013 and a court case which arose from those changes.

“Unless we succeed in curing this trend, the haemorrhaging of lost parking fees through the lack of meaningful enforcement will continue and we will ultimately have to go to the rate payer to make up the loss.

“That in my mind is unacceptable but we are being limited in our choice of realistic revenue streams as our choices in this matter are ultimately being determined by others.

“The Corporation continuously seeks ways to manage and reduce operating costs but, as they say, ‘the devil lies in the details’, or in our case lies mockingly unclamped across several parking bays.”