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Unanswered questions and hidden costs make charter change a rash choice

December 1, 2017

Two first-order questions remain unanswered about the proposed change in Rehoboth's charter to permit nonresidents who own property in an LLC to vote in municipal elections.

First, what is the purpose of this change - what wrong does it correct? Second, why now? The avowed purpose of the change is to give the vote to property owners who hold their interest through an "artificial entity," typically a limited-liability company or LLC. We learned that approximately 380 properties are owned by LLCs in the city. With up to two votes each (given 50/50 ownership by two LLC members), this represents a potential of over 700 new votes in municipal elections.

It is highly likely that given recent turnout trends, with approximately 1,300 votes, and contests decided by as few as four votes, these new voters, investors and commercial interests could overwhelm other residents' preferences with priorities that may be different. To claim that this will not "dilute the votes of those who chose to call Rehoboth Beach home" is to deny basic arithmetic. LLCs might be the "neighbor next door" but they also might be someone whose only connection to Rehoboth is the income stream they expect to extract in the short term. The problem is, we can't know because information about ownership of an LLC is not subject to disclosure.

Why now? Proponents of the change have not demonstrated why this should be a priority - it was not flagged during the last election campaign as a pressing need. Mayor Kuhns now argues that that the proposal is designed to be inclusive of our neighbors while addressing the need to update our charter. If updating our long-standing charter's core provisions was a pressing need, shouldn't we have heard about it over several election cycles?

Why the urgency to fast-track the change during the winter holidays when so many stakeholders are not able to participate in deliberations? If indeed there is a valid need to re-examine voting rights in Rehoboth, let's do it in a reasoned, deliberative manner, with full participation by all stakeholders. The proposal also raises the following issues of administering the new voting rules for LLCs: How will the affidavits of LLC owners who wish to vote be verified? Or will the city just take their word?

Will the cost of verifying and maintaining the roll of eligible LLC voter designees fall on just the LLCs or all residents? Will LLC affidavits and voting designations be public records, the same as the voter rolls of residents? Will they contain contact information, again, the same as for residents and property owners who don't hide behind artificial entities? Who can challenge an LLC voter's qualifications? Who bears the cost of the city's legal fees? If the voting 50 percent owner(s) of an LLC change from one election to the next, does that trigger a transfer tax obligation to the city and county?

Until these issues are clarified and all parties have a full opportunity to be heard, we are opposed to the proposed charter changes.

Andrea and Abram Hoffman
Rehoboth Beach

 

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