The Bill proposed by the Progressive Labour Party Government; announced by Home Affairs Minister Walton Brown in the House on Friday; as you’ve heard by now, proposes to defer municipal elections until May next year.

In the months ahead, the Government will engage in “consultations” with both the Corporations of Hamilton and St George, in addition to “residents and ratepayers in each municipality”, and the general public at large.

It’s all part of Government reform “to strengthen and modernize municipal governance for the benefit of Bermuda”.

While noting that municipality reform “has been undertaken by successive Government administrations, with extensive amendments to the Municipalities Act 1923 in 2010, in 2013 and in 2015”; he said: “Local governance and financial accountabilities have been extensively reformed”.

Examples cited included:

  • the creation unitary authorities for local government that has seen the creation of larger municipal areas and improved financial accountabilities; and
  • consolidation of legal authority to levy taxes to assure that the needs of local authorities are met.

“Ongoing reform is likely to be evolutionary,” said the Minister.

He also noted that Bermuda’s municipalities “do not deliver social services, which are the exclusive authority of the Government of Bermuda, although the need for social services within the municipalities are growing and the only recourse is to Government”.

While “two levels of taxation and the segregation of authority between the municipalities and central government” is “necessary in larger jurisdictions”, he said, in small jurisdictions like Bermuda, that concept “may not be justifiable”.

After all, he said, Bermuda is “a geographical area of 22 square miles”.

Based on the island’s “current fiscal realities”, he said recent the recent Front Street waterfront fiasco and the $12 million money trail left in the wake of the proposed Par La Ville hotel development showed Mr and Mrs Joe Public exactly why the need for “reform is evident”.

And he said “further governance reform” is needed as a result of :

  • Failures of accountability and proper due diligence and governance in the awarding of contracts. Honourable members will recall that the proposed Hamilton waterfront and Par-la-Ville hotel developments resulted in a highly critical report by the Bermuda Ombudsman, legislative intervention by the Government of Bermuda, the assumption of temporary stewardship, and an arbitration that has cost many millions to the public purse. This saga continues in the case of the Mexico Infrastructure Finance [[MIF] vs the Corporation of Hamilton where, as you will recall, !2 million went missing. The case is now headed to the Privy Council;
  • Inadequate resources to undertake important public infrastructure projects such as the needed upgrade to the sewerage system;
  • Policy and operations that need to be aligned with Government policies and legislation, and lack of consultation with the relevant Government Departments in relation to infrastructure. Reform is needed to assure collaboration between Ministries of Public Works and Public Safety and Home Affairs before embarking on projects that impact traffic control and the making of ordinances;
  • Breaches of protocol, for example, the Corporation invited the Taiwan Government to contract the Bermuda Government to enter into a tax information exchange agreement without first speaking to the Premier and Minister of Finance; and
  • The need to coordinate with Government in major developments because financial resources of the public purse, whether of the Bermuda Government or the Corporations, are limited.

As a result, the new Bill seeks to provide the following:

  • Allow officers, when necessary, from relevant Government departments, to participate in discussions regarding infrastructure repairs or maintenance to avoid such issues as concerns about road closures, traffic flow, planning issues, etc in order to provide advice to the Minister;
  • Allow for the Minister to provide directions to the Corporations if he considers that it is in the “best interests of Bermuda” and ensure that the Corporations gives effect to any such directions. This would have allowed, for example, the Minister to directly intervene in issues such as the recently announced closure of the docks, a problem that has developed over time.
  • Allow the Minister to direct the Corporations to undertake projects that will provide economic benefit to the whole of the island, such as the Hamilton waterfront or the St George’s marina. We have learned that the 2016 Court of Appeal judgment in the matter of the Mexico Infrastructure Finance [MIF] vs the Corporation of Hamilton ruled that the development [Par La Ville Hotel] could not be progressed because “the development would be something which would clearly be for the whole Island, but does not relate to the functions of the local government of the City of Hamilton in particular” and was therefore ultra vires. {Note: Ultra vires is a Latin phrase meaning “beyond the powers”. “If an act requires legal authority and it is done with such authority, it is characterised in law as intra vires {within the powers}. If it done without such authority, it is ultra vires].

The Minister concluded: “The existence of municipal governments in Bermuda may have raised concern in times when there were examples of inefficient allocation of resources in such a small jurisdiction.”

But he said: “The impetus for changing this arrangement has never been very strong particularly when the Corporations have largely been able and had the resources to govern their affairs properly and efficiently.

“The Government believes that this can no longer be sensibly argued, and the case for changing the status quo has become stronger in recent years.”