Govt Hand Back Control Of Corporation Finances

March 13, 2014

[Updated with video] Minister of Home Affairs Michael Fahy said today [Mar 13] that the Ministry of Finance has issued a set of financial instructions to the Corporation of Hamilton, and he has lifted the “stewardship notice,” which permits the Corporation to move on with managing their financial affairs in consultation with me the Minister.

The financial instructions require certain policies be followed, such as having expenses over $50,000 approved by the Ministry. The Minister also said they will “keep an eye on things” to make sure the instructions are followed.

In December 2013, Minister Fahy — citing “maladministration” and the Ombudsman’s report – announced that the Government would “temporarily assume stewardship of the Corporation’s financial administration and treasury functions, with immediate effect.”

It resulted in all financial matters being carried out only upon the authorisation of the Minister of Home Affairs, including tendering, accounts receivable/payable, purchasing, and all other money management matters.

 Copy of the notice issued by the Ministry of Home Affairs in December 2013

Fullscreen capture 12202013 44551 PM

In March 2013, Ombudsman for Bermuda Arlene Brock announced she would launch an investigation into the Corportation, citing the “continuing controversy and apparent growing loss of confidence in the Corporation.”

Ms Brock said maladministration had “permeated” the City’s administration, and she was very critical of the method used to award the 262 year lease for the Waterfront Development – a lease that was overturned by MPs last week following a vote in the House of Assembly.

The press conference has just ended and we will update with the full statement and video as able.

Update 2.59pm: Minister Fahy’s full statement follows below:

Good afternoon,

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.


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Comments (19)

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  1. Family Man says:

    You can expect to see a lot of expense reports submitted for $49,999

  2. Vote for Me says:

    Enquiring minds will want to know the background to this change of heart.

    The public must all be aware of the significant reliance upon the Ombudsman’s report by teh government. It has been used to justify the Minister taking over the financial affairs of the Corporation and the cancelling of the waterfront contract.

    We will all be watching to see if this high level of reliance on the report is justified.

    • 1minute says:

      I guess you didn’t read the article…

      It was a temporary arrangement and the CoH has new rules that they must play by…

  3. nuffin but the truth says:

    Stupid move!

  4. fool's loaf says:

    So now that the Minister feels he has sorted out the waterfront deal to his satisfaction he don’t have to worry no more with managing the COH finances? Seriously OBA, you lot take us for fools each day no wonder ya feel the need to change ya plates.

    • daughter of the water says:

      Perhaps when you learn how to speak and write correctly, your opinion will carry some weight.

    • Mike Hind says:

      Any evidence that this was why they turned over financing?

      Or are you just speculating in the most negative way possible and presenting that speculation as fact in order to try to score political points?

      I’m going to guess the latter.

  5. Let’s face it hamilton is responsible for a lot of eegrunce, they have run afoul of lawfull conduct before and is needing of adjuctment in one specific way I myself feal necessary.

  6. that aside…their painting roads sadly in need of repaving.There …in and of itself is not reflective of value for dollar!

  7. Hmmm says:

    FIX THE ROADS COH. Shambles

  8. Alvin Williams says:

    All this was done to undo a land lease agreement that the corporation had entered into. The principles who had that agreement in hand should sue the
    government for using the law to over turn a business agreement. So much for free enterprise not so free depending who you are?

    • Mike Hind says:


    • inna says:

      And mate, the developer group was going to redevelop probably Bermuda’s most valuable piece of waterfront, with no public consultation, no environmental studies, no feasibility studies, no nothing! Just approved and lease granted by the stroke of a pen. That says a lot for both parties involved in the deal, and quite frankly i am happy that this lease was overturned. That way ALL of us are able to have a say in how we think our island commerce centre should be transformed into! Just look at the difference between the APP (not too sure of the name of the company) plans and John Swans. 100 times better, and it can be even 100 times better than that!

    • Kangoocar says:

      Alvin, this is a new low from even you!!! Are you seriously suggesting they sue the govt??? You do realize that is YOU and everyone else as well?? Ok, I know you can’t think that far because of your continuos fight against the establishment!! But let me help you, those wannabe developers had no chance in h.ll of getting the financing!!! Whether you like or understand it, the OBA saved all of our a$$,es on this!!! Thankfully that train wreck was stopped before it could happen!!!

    • jt says:

      One word….cement.

    • Silence Do Good says:


      Think before you blog and try blogging for once without politricking.

      Who has the Par-la-ville develoment and lease? A deal between Government and CoH struct by the previous government and the current government changing the Municipalities Act so that the CoH can guarentee a loan to get the site developed. A plan that has been in the works for too long…

      Good is Good and Bad is Bad you can spin it all you want for party motives and secret back room deals etc. etc. The CoH plan for the Waterfront was hasty and bad, even the previous government’s created post of Ombusman found it highly suspect.

      If the previous government was in power now they would be moving ahead with their $700 K consultancy plans to abolish the corporations and who would be managing the Waterfront? Government or the CoH who gets a second chance to do it right for the people of Bermuda. Who knows the current CoH administration might do a better job this time around that might give them a chance of re-election.

  9. Triangle Drifter says:

    Does this mean that the children have been given the keys to the car but they can’t drive it very far without checking with the parents?

  10. bluebird says:

    We voted in a responsible Government to try and straiten our Country Out.
    The OBA are doing a good Job,thank you OBA for looking after all our interests.
    The OBA are taking care of “BUSINESS”
    Bermuda Government is a BUSINESS a BIG BUSINESS and should be run like a BUSINESS and not Bled to death for a few of the PLP.
    Like their Grocery Store and their Bank and the UNION FINANCES.

  11. bluebird says:

    And we are still in “DEBT” at $2.324Billion dollars
    And we are still BORROWING $276Million per year to pay the Union/Government.
    And we are in our (5) FIFTH YEAR of DECLINE on the economy (thank you PLP)