M&CC revenue shortfall
On Wednesday once again we reported on complaints from Mayor Ubraj Narine about arrears in rates and taxes owed to the M&CC. In a press release from his office it was said the Mayor had stated in an interview that the municipality was currently receiving only a quarter of what it needed in order to function. There must be few tolerably orderly capitals in the world where three-quarters of the citizens refuse to pay their rates and taxes and are not subject to sanctions. But we have been in this position now for more than thirty years.
Perhaps not altogether surprisingly, the biggest offenders are certain unscrupulous members of our business class, who in addition construct high-rise buildings but still continue to pay nominal sums in taxes. That notwithstanding, they have no compunction about adding to the strain on the city in terms of solid waste collection.
The shortfall in funds for running the capital, as mentioned, dates back more than three decades. While the various PPP/C administrations have deliberately undermined the municipality by ensuring it lacked finance, its own hand-picked Interim Management Council, which it installed prior to the holding of local government elections in 1994 and which served for six months, complained that the finances available to the M&CC were inadequate for the job it had to do.
The government of the day as well as those which followed it, took no notice, because it had political games to play, and it seems that it still does. It wants to present the city council as a totally incompetent, if not corrupt, entity, and will not address the monetary issue in case sufficient revenue enables that body to discharge its functions in a more efficient way. The problem is that without sufficient money not only can the M&CC never be competent, but it will not be able to fulfil its role even at a basic level. And that is an issue for all those who make their home in the capital.
It might be mentioned that as it is there are few residents of Georgetown who seriously believe the council represents a haven of capability and skill. However, its shortcomings would be even more glaring, not less so, if it had the funds needed to carry out its responsibilities, because it would have no excuses. And as for corruption which clearly has been an ongoing problem, that should be addressed by ensuring there are proper systems of accountability in place, not by conspiring to deprive the municipality of the money required to fulfil its mandate.
The public will wonder why it is that the M&CC cannot recover outstanding rates and taxes. There have been attempts, such as offers of amnesty to defaulters and invitations to individual householders who are financially embarrassed to come to City Hall to negotiate a payment scheme, but these have not produced much. After all, the biggest delinquents are found in the business community and even among certain state agencies. Some years ago the city council was contemplating the establishment of a debt recovery unit, but nothing much seems to have come of it.
There are two reasons why the municipality cannot improve its collection of rates and taxes, and both lie within the province of the government at some level to remedy. In order to receive realistic returns from the owners of high-rise buildings and to rationalise property taxes, the Ministry of Finance would have to carry out a valuation exercise, which it has shown no inclination to do. As for the recovery of debt, as has been said before in these columns, the problem lies with the change in the law affecting parate execution.
The expert on this matter was the late Mr Leon Rockliffe who first wrote on the subject in this newspaper as far back as 2007. He explained the system of parate execution as the serving of a notice by the Town Clerk (in the case of Georgetown), stating the amount due on a given lot on the owner, or affixing it onto the lot itself. If the rate was still not paid “the process passes through the Deeds Registry (and now the Land Registry also), the High Court, the High Court Registry and finally the Marshal of the Court who, after due advertisement of the intended sale in the Official Gazette, would sell the property at public auction on an appointed day.” Out of the sale the municipality would recover the rates due and the cost of the parate execution process.
This system effectively came to an end, wrote Mr Rockliffe, with the passage of the Municipal and District Councils (Amendment) Act of 1988 and the Local Government (Amendment) Act of the same year. They were known in “polite circles” he said, as ‘The Nutman Acts’, and were passed to stop a particular abuse of the system by one “gentleman of commerce”. He went on to write that the two acts in question did make provision for the Clerk of
Council to institute legal proceedings against the owner of a property with a view to recovering debt. However, “The many thousands of such proceedings, the legal personnel to pursue them and the multiple Magistrates’ Courts that would have to be established for the sole purpose of hearing these proceedings render such course a formidable and impracticable solution.”
For all of that, this route has been taken in a few cases mostly involving businessmen, but as Mr Rockliffe stated, it had barely scratched the surface of the problem. He did acknowledge, however, that where the possible restoration of parate execution was concerned even as long ago as 2007 when he first wrote, it would be difficult to find anyone within the system who was familiar with the process. There were various other impediments which he identified too, more especially some relating to the Deeds Registry.
His recommendation at that time was that there should be “a serious meeting” of the entire local government body with the Registrars of Deeds, Lands and the High Court and with appropriate legal advice. It might be added that any such meeting would have to include the Minister of Local Government and the Attorney General nowadays. Towards the end of his letter he wrote: “There is no alternative to urgent executive action. The present situation cannot be allowed to persist. The problem will not evaporate or just go astray. It must be met head-on.”
That was fourteen years ago, and the problem has been allowed to “go astray”. If the government is serious about restoring the capital, it needs to look seriously at the legal provisions relating to how the M&CC can recover its debts. In addition, the President should require that the Minister of Finance puts his Valuation Unit to work.