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Senators cast doubts on Town Council Bill

This morning the Town Council Amendment Bill 2017 was passed in the Senate but not before it was widely debated. The bill makes provisions to give greater fiscal autonomy to local governments in seven municipalities. These municipalities will now be able to raise funds for capital projects. While supporting the bill, Senator Mark Lizarraga, who represents the business sector, raised some concerns.

Senator Mark Lizarraga:

“Section 22 subsection 1 now reads ”The council may with the approval of the Minister responsible for finance borrow sums required by it for meeting any of its obligations or discharging of its functions.” Mr. President that changes the whole tone and it diverts from what the very heading of what this bill says because the bill says ‘For greater autonomy to the town councils for raising funds for capital projects.’ yet in the very same bill it is saying that the council may with the approval of the Minister of Finance borrow sums required by it for meeting any of its obligations or discharging any of its functions that certainly does not limit only to capital projects so there is an inconsistency there. Originally the town council was able to raise loans that was guaranteed or secured by annual town council funds sufficient to cover the interest payments and provided for the sinking fund. But this amendment to section 22 1 does several things. First of all it removes the need for the 2/3 of the councilors to agree to approve the loan. The previous version again read that whenever the general interest and welfare and development of any town will be advanced by an expenditure greater than the annual revenue which albeit was broad in its own right it still provided some guidelines on when and why borrowing could be acceptable. This amendment however provides a type of carte blanche application; for meeting any of its obligations or discharging any of its functions. The chief concern here has to be the protection of the Belizean taxpayer. We don’t know what limits are placed on the town councils and how Section 2 will now read is that subject to subsection 1 the council may establish companies under the companies act to raise funds for infrastructural development projects. This clause allows the local authorities to establish a type of state enterprise or other special purpose entities to raise funds for infrastructure projects, at least here it’s narrowing down to infrastructure projects. But the million dollar question is; how will these companies be regulated? Are we creating more bills? Where will the public debate or disclosure on how contracts are awarded take place?”

PUP Senator Valerie Woods also brought across her doubts on the document, highlighting that the San Igancio Santa/Elena Town Council was the only municipality cited as being in urgent need of completing the construction of their new town hall building. She said this was the only reason for rushing the bill through all three readings.

PUP Senator Valerie Woods:

“These are the questions that I have since the House and the Senate has been taken out of its traditional recess period for such urgent matters of Santa Elena and San Ignacio Town Council Town Hall construction that cannot be completed because they ran out of money. Where is the transparency and the accountability involved with even the construction of the town hall? Where is the transparency and the accountability that this is how much it was going to cost and this is how much we have spent? We have spent it in so much we cannot continue, this is just how much more it needs to be done, this is how we are going to repay it back but before we get there what about that construction? You see greater autonomy will require when you undertake such a project a capital project of that size that you put it out to bid; was it put out to bid? Did you get fair price? So naturally I asked. Who’s building it? Well it wasn’t put out to bid. Who’s building it? Johan Construction and Engineering Limited. Should the senate be concerned about any conflict of interest? Why is this thing being rushed? Well if one were to take a look at the registry for businesses it’s only owned by the brother of the Minister of Works, 80% shares, and 20% by the Minister’s sister in law. Now I guess that should not cause any of us to pause. What is even more peculiar and it should annoy us because we are talking about we want them to do a better job in this day of globalization and all and where things are evolving town councils need to be able to do more but is the San Ignacio and Santa Elena doing more ? Was that the example given? No it’s just finish the construction that could not be finished because they ran out of money. But back to that company. It only got incorporated on February 10th of this year. Not five years with a history of construction building this year. Are we seriously in this upper chamber going to support and agree with this bill when you know that there is a lot going on that was not disclosed.”

Woods also pointed that a sign mounted at the location of the new site of the building states it is being funded with the San Ignacio and Santa Elena Town Council funds and loans from the National Bank of Belize. She questioned whether this bill was to allow the Town Hall to borrow more money from the National Bank.

UDP Senator, Macario Coy:

“We have to do our homework and research. It was clear that the bid was $1.1 million dollars lower than the highest bid that was contracted.”

UDP Senator, Carla Barnett:

“There is no government guarantee for this project, there isn’t a guarantee from government what it is an assignation of the subvention but there is not a generalized guarantee it is not necessary it is not a significantly large sum that would require that kind of cushion and the San Ignacio and Santa Elena Town Council has the capacity to pay under the existing arrangements between government and the town council for the regular subvention that they get so it’s an assignation of a portion of the subvention. No money has been advanced by the national bank towards this project. Yes there is a sign there and that sign reflects the cooperation and in fact that National Bank staff have been helpful in terms of looking through all of the town council’s affairs the same way when banks lend to customers they go in and look into their affairs to see how things are being managed and make suggestion well the same process happened.”

The Bill was taken through all its stages and garnered a majority vote in its favour.