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More questions than answers on LLC voting in Rehoboth

December 1, 2017

A letter in last Friday's edition spoke to the need for additional data regarding proposed charter changes in Rehoboth that would extend voting privileges to nonresident LLC owners. I've found that the further we dig into the issues, the more questions arise. The mayor and commissioners simply have not had the time to consider the ramifications of this move. Below are just a few of the questions I hear most often from friends and neighbors.

How many new voters will be eligible under the proposed rules? How many are residential? Commercial? Developers? Discussion so far has centered around residential owners of LLCs, but wouldn't eligibility rules apply to all LLCs? Property tax records reveal that many are commercial, and some are developers. The answers to the question of "how many" will go a long way to answer a question posed by many citizens: Who benefits most from these changes?

How will the city judge voter qualifications of LLC owners? Unlike a corporation, an LLC can distribute its ownership interests as it pleases, without regard to how much money or property a member contributes to the company. An LLC can also be organized with different classes of ownership interests, which provide flexibility for special allocations of profits and voting power. How will the city define 50 percent, given these complexities of LLC ownership?

How will the city verify and track changes in ownership after a person from an LLC registers to vote?

How much did the city spend defending the federal lawsuits filed over our election processes in 2015-16? What is the risk of a lawsuit from residents whose votes will be diluted by the proposed changes?

What are the likely administrative costs of adding LLC voters (including legal review of documentation)? Why are voting rights being proposed for LLCs now when a similar measure that would have given only one vote per LLC never got off the ground 10 years ago?

There are already processes in place for the owners of properties in an LLC to vote if they choose. Why are we undertaking the cost, and further diluting the votes of our residents, to satisfy nonresident homeowners who have chosen this form of ownership, most of whom operate their house as a business?

How many public meetings and town halls are planned for voting rights? Finally, the question everyone asks is: What problem are we trying to solve? I hope that the answers to these questions will be forthcoming at the Town Hall on Saturday.

Susan Gay
Rehoboth Beach

 

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