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Witness tells CoI… City Hall owes insurance companies over $24M

Oct 06, 2018 News

The Mayor and City Council owes over $24M in arrears to various insurance companies for payments dating from February 2017 to the present.
This was stated by Ewart Adams, Deputy Managing Director of Insurance Brokers Guyana Limited (IBGL) Limited, who testified, yesterday, at the Commission of Inquiry into the affairs of the Mayor and City Council.
Insurance Brokers Guyana Limited is the official insurance broker for the Mayor and City Council. Through these brokers, the Council pays premiums for Motor, Fire and Pension Policies to four insurance schemes.
Adams informed Justice Kennard that City Hall has an administrative pension plan with Guyana and Trinidad Group of Insurance companies (GTM), Motor Insurance with Guyana Cooperative Insurance Service (GCIS), and Fire Insurance with Hand-in-Hand Trust and GTM. IBGL usually collects the premiums from City Hall, which in turn forwards them to their respective companies.
However, City Hall has not made payments for their Motor and Fire Insurance policies since February 2017. These premiums, he explained, are paid bi-annually. The outstanding total for these policies, for February 21, 2017 to date, is $9,566,304.
As for the administrative pension policy, City Hall has not honoured their payments since February 2017. These payments are to be made monthly. Mr. Adams stated that there is no fixed total on the pension plan, as it would vary with an increase or decrease in employees. However, he has estimated that the outstanding monies are about $14.5M. Speaking on the outstanding arrears, he said, “It is worrying to me, as well as employees of the City Council.” He said that employees who leave the job between the outstanding period will be robbed because the premiums taken out of their salaries are not being paid to the insurance companies. As a result, they would receive reduced pensions when they retire.
Adams told the CoI that he has made multiple attempts to procure those payments from City Hall, but has gotten the “royal runaround”.
According to Adams, Deputy Town Clerk, Sharon Harry-Munroe told him that she would arrange for $1M to be paid every week until the outstanding arrears are completely paid. At the time, she was the acting City Treasurer. However, she has since returned to her position as Deputy Town Clerk, and has not fulfilled her promise to have these payments paid. The current Acting Treasurer, John Douglas, is usually “unwell” or “unavailable”, Adams said.
He related that he is unimpressed with the Council, and that they “have their priorities in the wrong order.” He questioned whether they have been using the monies deducted from employees’ salaries for other purposes.
Adams also said that the Administrative pension plan is required by law to be registered with the state. The Council has been summoned to appear at a meeting by the Office of the Commissioner of Insurance concerning this registration, but Adams said that they have not done so. Further, despite agreeing to register with the state, at the time of application of the policy, the Mayor and City Council has not made efforts to fulfill this promise.
The Deputy Managing Director of IBGL recommends that there will be a complete overhaul of the management of City Hall.
The Commission of Inquiry into the affairs of the Mayor and City Council is headed by the Local Government Commission. Its purpose is to examine, advise and report on irregularities of the administration, its operations, and the managements of its financial affairs. The Chairman appointed to lead these proceedings is Retired Chancellor of the Judiciary, Justice Cecil Kennard.

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