Government lifts stewardship notice on City of Hamilton

The Corporation of Hamilton will not be able to spend more than $50,000 without permission from the Minister of Home Affairs.

This is according to the new financial instructions given to the corporation today by Michael Fahy, Home Affairs Minister.

The financial instructions come after a stewardship notice issued to the Corporation in December has been lifted. They were initially included in various amendments to the Municipalities Act 1923.

Mr Fahy made the announcement this afternoon at a press conference and said: “This morning I can report that the Minister of Finance has issued a set of financial instructions to the chief operating officer of the Corporation of Hamilton that must be used by the Corporation of Hamilton in accordance with Section 7B of the Act with immediate effect to ensure good governance of their finances moving forward. 

“Additionally this morning, I sent a letter to the Chief Operating Officer of the Corporation of Hamilton in accordance with Section 5.1.2 and 5.1.3 of the Financial Instructions that formally approved a fiscal budget for 2014-15 that the senior officers of the Corporation and I considered reasonable for them to carry out the business of the Corporation of Hamilton for this period.”

He continued: “As a result of these measures now in place, I can formally advise that today I have lifted the Stewardship Notice of 19th December 2013, which in essence, permits the Corporation to move on with managing their financial affairs in consultation with me as Minister with responsibility for Municipalities where appropriate.

“The Code of Ethics and Council meeting Guide are in the final stages of drafting.

“However, I believe the most critical piece at this time was the Financial Instructions being in place to ensure the Corporation could assume their day to day functions independent of the Ministry, save for areas where Ministerial approval is required.”

Mr Fahy said the corporation would be able to spend its money as it likes, except for amounts over $50,000. Anything that hasn’t been pre-approved in the corporation’s budget will have to be approved by Mr Fahy.

Mr Fahy also said the $100,000 to be paid for the Black Mayor’s Conference to be held in Bermuda in October has not been sent off as it is over the set $50,000 limit.

Asked how confident he is that the corporation will stick to the financial instructions, Mr Fahy said: “The financial instructions is something that is laid out in the act from last year.

“It’s anticipated that they will be followed. They have been reviewed by the corporation staff.”

Mr Fahy also said the stewardship notice issued in December was always meant to be a temporary order for three months.

Last year you will recall that various amendments to the Municipalities Act 1923 were made to improve the governance of the Municipalities – St. George’s and Hamilton.

These amendments focused on key areas such as the creation of Financial Instructions, a Code of Ethics, a Council Meeting Guide, to an Asset Management Plan among other matters. 

Also last year, you will recall that the Ombudsman raised concerns regarding certain operations of the Corporation of Hamilton in relation to financial management in her report of 13th December 2013 entitled “Ombudsman’s Own Motion Investigation into Governance at the Corporation of Hamilton”

In light of the grave concerns highlighted by the Ombudsman, acting in my capacity of  Minister with responsibility for Municipalities I issued a Stewardship Notice on December 19th 2013 pursuant to Section 7B (6) of the Municipalities Act 1923 thereby taking over Stewardship of the Corporation on a temporary basis.

At that time I stated that the order would be lifted once matters like Financial Instructions were formalized pursuant to the Municipalities Act 1923.

The Notice specified that:

“The Minister believes that, in accordance with section 7B (6) of the Act, it is in the public interest to temporarily assume stewardship of the financial administration and treasury services of the Corporation of Hamilton because the services of the Corporation are in a poor state due to maladministration as illustrated by the Report of the Ombudsman for Bermuda tabled in the Legislature”. 

This morning I can report that the Minister of Finance has issued a set of Financial Instructions to the Chief Operating Officer of the Corporation of Hamilton that must be used by the Corporation of Hamilton in accordance with Section 7B of the Act with immediate effect to ensure good governance of their finances moving forward. 

Additionally this morning, I sent a letter to the Chief Operating Officer of the Corporation of Hamilton in accordance with Section 5.1.2 and 5.1.3 of the Financial Instructions that formally approved a fiscal budget for 2014-15 that the senior officers of the Corporation and I considered reasonable for them to carry out the business of the Corporation of Hamilton for this period.

As a result of these measures now in place, I can formally advise that today I have lifted the Stewardship Notice of 19th December 2013, which in essence, permits the Corporation to move on with managing their financial affairs in consultation with me as Minister with responsibility for Municipalities where appropriate.

The Code of Ethics and Council meeting Guide are in the final stages of drafting. However, I believe the most critical piece at this time was the Financial Instructions being in place to ensure the Corporation could assume their day to day functions independent of the Ministry, save for areas where Ministerial approval is required.

Thank you.