Unless there is reform of entire local tax regime the city would forever be trapped in a vicious cycle of poverty

Dear Editor,

Over the last few weeks, a number of events have placed the Council in the spotlight in certain sections of the media. As a result, many citizens have been asking questions about the specific and general operations of the Council and the state of affairs as it relates to finance and the provision of services. It is against this background that, we, at City Hall, seek to provide answers to our citizens. In this regard, we wish to confine our explanation to three areas: responsibilities, resources and restoration.

On the question of responsibilities, it is public knowledge that, the Georgetown municipality has the responsibility to provide municipal services to local communities within the city of Georgetown. These include roads, drainage, street lights, maintenance of cemeteries, maintenance of five municipal markets, maintenance of sluices, pumps and allied drainage equipment, Maternal and Child Welfare Services, Day Care Centres, Environmental and Public Health services, construction, repair and maintenance of bridges, footpaths and reserves, maintenance of green spaces and recreational grounds and facilities for children, youths and seniors, enforcement of compliance to city by-laws, maintenance of pavements, and the regulation of vehicular traffic on city roads.

These services are vital to the quality of life of citizens residing within the precincts of Georgetown and the transient population that visits the city for business and/or pleasure. Altogether about five hundred citizens use the facilities and services of the city on a daily basis. However, the efficient and effective provision and delivery of these services requires money, manpower and machinery. But it is no secret that, the council is very short of all three- money, manpower and machinery.

In so far as resources are concerned, citizens will recall that in 1994, the then People’s Progressive Party/Civic government appointed an Interim Management Committee, under the chairmanship of Dr. James Rose. That committee argued that the revenue base of the Council was too small to provide the wide range of services and facilities it was called to provide to local communities and the city.

As a result, the IMC’s proposed new revenue sources to reposition Council financially and to allow it financial comfort to fulfill its responsibilities to citizens. Even though the Committee was supported by many friends of the Council it still fell far short of the resources to keep the city clean and healthy.

Since that time and even before 1994- successive councils have made strident efforts to better the financial situation of the Mayor and City Council; they were not very successful.

The negative financial situation of the council is exacerbated by certain realities. These include: 1. Lack of valuation of properties: The fact that we have not had valuation of properties for over twenty years. This means that property owners are paying rates on the rental value of their properties assessed twenty years ago; a most unfortunate situation. A quick glance at our records at the City Treasurer’s Department show that some property-owners are paying less than sixteen dollars per day to the council, in general rates. This is noteworthy because a substantial portion- 78% of the council’s revenue comes from general rates. The poverty of the city cannot be decoupled from the fact that about 35% of property-owners, including big corporations and companies, even with amnesty, continue to deliberately neglect to pay their rates to the city. Others undervalue their properties- paying domestic rates instead of commercial rates. However, many property owners actually get away with this unethical corporate behaviour because of the cumbersomeness of the judicial process, for parate execution of properties.

Still, for over two decades the Council has been providing vital municipal services to all communities. It is true that while there has not been valuation of properties the council has been doing all things practicable to sustain basic services to the city. Looking at it a different way, the Council has been subsidizing businesses and property owners operating in the city because they are receiving services for which they are not paying the real costs. Again, while there has been no valuation of properties for two decades, the costs of commodities used by the municipality to provide services have, over that same period, increased several percent. These include fuel, electricity, cement, sand, stone, wood, steel, machinery, equipment, tools, training, technologies and labour.

Changing environment: The Council is now required to do more with less in a changing environment. Global Warming and Climate Change is affecting the way the council organizes its work, particularly, in the areas of solid waste management, and drainage and irrigation. More money has to be expended to keep our canals and outfall channels free and flowing. The Council has to increase the frequency of its cycle of cleaning these waterways in order to prevent overtopping during heavy rains. Changing weather patterns and deforestation affecting the Amazon have implications on the health of our natural environment and how we interact with it. This, too, is pushing the council to plant more trees and greenery for their physical, psychological, and health benefits to citizens.

Also, changing demographics of the city requires more social services including health, sports, and fitness promotions, educational, training and related facilities. There is greater need for housing and related infrastructure, more consumption of energy and more emphasis on planning and controlling spatial arrangements of the city.

It is clear that the current revenue base of the council facilitates an extremely worrying inability to deliver vital services. This is manifest in delays in payment of wages and salaries to workers, tardiness in honouring contractual obligations, on the part of the Council, shortages in materials, tools, equipment and machinery, erosion of public confidence in the work of the council and generally a noticeable underperformance of the Council. Actual figures at the council reveal the following: in 2017 the Council budgeted to collect $1,745,000,000. However, the actual collection as of October this year is $980,397,147- a variance of $764,602,853. Again, the average monthly income of the Council is $80 million dollars. But its monthly payroll, to its staff numbering about 800 plus over 250 pensioners is $112 million dollars per month. We have not mentioned figures for overhead costs and other expenses to provide services.

Undoubtedly, the Council needs to accelerate its plan to restore Georgetown to it pristine state. In 2016, the administration at City Hall started a massive restoration drive. This included, inter alia, restoration of the building that houses the City Engineer’s Department, the City Constabulary building, repairs  to facilities at the Promenade Gardens, designing and calculation of estimates for the construction of a four-storey building for the Council’s administration, significantly improving mobility and communication for the City Constabulary, improving community security, enhancing all local communities, sanitization of the central business district of the city, dredging of our canals and other waterways, repairs to bridges, organizing street vendors, construction of stalls, designing and opening of new green spaces and a host of other cleaning activities in different sections.  Our mission is to make Georgetown the cleanest and greenest city in the Caribbean. But our efforts have been stymied by the acute lack of resources. We have demonstrated our good intention and what is easily possible in the nation’s capital but achieving these require money.

Therefore, it seems reasonable to conclude that unless there is a complete reform of the entire local tax regime the city would forever be trapped in a vicious cycle of poverty, faltering as it attempts to serve the city. This reform must include new and appropriate legislation that would make it less difficult for the council to recover outstanding rates from defaulters, and perhaps, a differential rating system that would encourage those, who use more of the city’s resources to pay more to the council. In this regard, we are gratefully aware that, the Honourable Minister of Communities, Mr. Ronald Bulkan has started a process to engage a company specialized in the field of tax reform to look at reassessing all properties in the city. In most parts of the world cities are largely financed by rates and taxes from properties within their limits. As a result those cities have the capacity to build and maintain roads and other infrastructure and to provide neighbourhoods characterized by public health and safety. Georgetown ought to be enjoying similar benefits.

Yours faithfully,

Royston King

Town Clerk

City of Georgetown  

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