The Corporation of Hamilton ran up debts of more than $20 million last year after it lost a $22.5 million lawsuit in a US court.

Accounts released by the corporation showed that revenues for 2023 exceeded running costs by around $500,000.

However, the legal action by Mexico Infrastructure Finance LLC, which concluded last July, plunged the municipality’s finances into the red by almost $22 million.

Although City Hall has appealed the ruling, an application for a stay of proceedings was rejected by Bermuda’s Supreme Court last month.

A City Hall spokeswoman said: “The corporation is actively appealing this decision and is seeking legal advice on the enforceability of the ruling in Bermuda, particularly considering the Privy Council’s decision in January 2019 in favour of the corporation.

“Despite this, the corporation is required under generally accepted accounting principles to recognise this potential liability in its financial statements as an expense for the current year.

“As a result, the corporation reported a deficit of $21.9 million for 2023, compared to a surplus of $0.8 million in 2022.”

In a statement, the corporation pointed out that its financials for the year were presented with an unqualified audit opinion from independent auditors KPMG.

The accounts show that revenue for the year was $26.8 million, up from $25.5 million in 2022.

Property taxes remained stable at about $8.6 million, while goods wharfage increased to $7.9 million from $7.7 million. Car parking fees also rose, from $4.3 million in 2022 to $5 million last year.

There were also increases in general running costs. Administrative expenses were up from $8.4 million to $9.3 million, and sanitation services increased to $3.8 million from $3.5 million.

The spokeswoman pointed out that much of the almost $1 million rise in administration costs was due to the MIF lawsuit, as well as an increase in computer expenses. Other increases were partly due to the rising cost of doing business.

She said that despite the deficit, the corporation would remain committed to its “strategic vision of sustainable growth and infrastructure development, ensuring that Hamilton continues to thrive as a vibrant city”.

Dwayne Caines, the corporation’s chief executive officer, added: “The city is held accountable to its rate payers and, as such, we are proud to uphold our obligation to operate with fiscal prudence and engage in transparent processes by publishing our audited financial statements.

“Our continued ability to undertake significant capital projects and host world-class events without the need for additional borrowing is a testament to efficient financial projections and planning.

”Key projects during 2023 included the fabrication and installation of the iconic ”Bermuda” marquee sign, City Hall office refurbishment, the refurbishment of the Earl Cameron Theatre dressing rooms, as well as significant paving works.

“At the City, we prioritise balancing our financial responsibilities alongside our commitment to our community.”

The latest instalment of the long-running legal battle between City Hall and MIF has its roots in the failed Par-la-Ville Hotel and Residences project, which has tied up courts in Bermuda, New York and London for the best part of a decade.

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