Services threatened by cash crunch – Gosling
Corporation of Hamilton programmes could be restricted due to the grim financial situation left behind by the previous administration, according to Hamilton Mayor Charles Gosling.
While the Mayor said the corporation is still “looking under the hood”, he told The Royal Gazette financial statements for 2014 — set to be released next week — do not paint a positive picture.
Mr Gosling, who was elected as Mayor two months ago, listed a number of costly bills racked up by the “Team Hamilton” regime, led by former Mayor Graeme Outerbridge from May 2012 to May 2015.
These included more than $1 million on legal actions and a further $250,000 on the ill-fated Conference of Black Mayors. In addition, the corporation is facing a $1 million drop in parking revenue and has the cost of an $18 million loan guarantee looming over its head.
“It might restrict a lot of the programmes that we had been envisaging,” Mr Gosling said. “From something as simple and uninteresting as providing fail-safe protection for our sewage, enabling us to have better sewage treatment, to the prospect of the services the corporation is able to offer.
“In the time that we have been here we have had numerous meetings with the minister overseeing the municipality, Michael Fahy, his permanent secretary and legal counsel.
“Though government might not work at the pace at which I would like it to, we are certainly moving in the right direction and hopefully we are going to minimalise the impact of this.”
Asked about the issues facing the corporation, Mr Gosling noted the Par-la-Ville Hotel loan which the Corporation had guaranteed.
“It’s common knowledge that the $18 million guarantee that the corporation put up for the benefit of the Par-la-Ville development has been called,” he said.
“While the guarantee was limited at $18 million, it does not mean that we are not liable for interest rates on top of that.
“We are accumulating debt right now at the equivalent of about $3,500 per day because of our inability to pay.
“We do not have the cash to even make a significant payment on that. We are looking at a number of possibilities to come up with a financing scheme to the approval of our creditors.”
He also said that court rulings have cost the corporation more than $1 million per year in parking fees and penalties, a “significant percentage” of the municipality’s revenue stream.
Asked if the financial issues would impact the ability to sponsor events such as the Santa Parade and Harbour Nights, Mr Gosling said the corporation only really began to sponsor such events financially fairly recently. Previously, he said the city had sponsored the events with “in kind” assistance.
“In 2009 with the beginning of the recession we said you guys need some help and rather than removing two barriers at no cost to you, a little cash might be of better use,” he said. “That was the first time we started those things.
“It might go back that way. We are going to be doing some presentations to the council next month in terms of the upcoming budget. That part of the budget is, in a way, so small. What we really need to look at and fully justify are the services which we are providing and get the council to look at that.
“We are not getting into the nitty-gritty, we’re staying at the higher level and letting the experts that have all those letters after their names make the determination about how to spend that money.”
Mr Gosling said the corporation has been in talks with the America’s Cup team, saying that the event could provide a massive boost to both the City and the Island.
He said: “We have been negotiating with the America’s Cup and they are going to be making some significant demands not only on the Corporation but also on the people who live and work within the City and I hope that sooner rather than later information will come out about what the impact is going to be with the series.
“I personally think that it’s going to be so jaw-droppingly phenomenal that whatever minor impact it has on us over those three, four days things are taking place in Hamilton Harbour, we will suck it up and enjoy it. It’s an experience we will tell our grandchildren and anyone else. If we do not embrace this thing then years down the road we only have ourselves to kick.”
Asked if the event might help the city create new capital assets, Mr Gosling said: “We will need to provide things; they will need to provide things.
“With some of the items that they provide for the servicing of the racing yachts or the mega yachts, it might be the old pragmatic thing of one hand washes the other.
“The America’s Cup will most certainly be helping to provide the city with capital investments in order to enhance what we can provide.”
Hamilton Mayor Charles Gosling said that the Corporation of Hamilton is hoping to recover some of the money spent on a controversial conference which has yet to take place.
Speaking yesterday, Mr Gosling said the previous administration had spent “about $250,000” on hosting the National Conference of Black Mayors (NCBM), explaining: “There was a sponsorship fee with the Conference of Black Mayors and there were also some deposits that were made to local hotels for the various activities and bookings associated with the conference.
“We are hoping to recover some of that money from some of the local service providers and accommodations from the deposits.” The conference was originally set to take place last October, but legal disputes over the leadership of the organisation left the event in doubt.
While executive director Vanessa Williams had claimed to be in charge of the organisation during talks with the corporation, a United States judge found that Sacramento mayor Kevin Johnson was the rightful head of the group. It revealed that Ms Williams had been fired by the NCBM after the scale of the group’s debt under her management was exposed. Ms Williams reportedly failed to cooperate with an internal audit of the organisation, which revealed that she had spent $600,000 of NCBM funds on personal expenses.
However, Ms Williams continued negotiations with the Corporation for a Bermuda convention, claiming that the NCBM had changed its name to the Conference of Black Mayors (CBM) but the new body was the same organisation. Despite the issues, government expressed its support for the event, with Home Affairs Minister Michael Fahy saying he was satisfied with the discussions he had with Mayor Graeme Outerbridge. The event was later delayed until April, but Sen Fahy said in January that it was “highly unlikely” the event would ever take place.
Asked for an update Mr Gosling said: “I have absolutely no information. I haven’t inherited any information. The people who were organising it on a local level have not been in contact with the corporation at all.
“As far as I know the hotel bookings — and that contract was never signed — the rooms which were held for the conference were released some time ago.”
