Rehoboth proposes LLC, leaseholder voting

Visitors with a 30-day lease and some people whose property is owned by an LLC would be eligible voters under an ordinance proposed in Rehoboth Beach.

Commissioner Kathy McGuiness introduced the ordinance, which requires key changes to the city charter relating to elections. Under the proposal, a person would be eligible to vote on behalf of the LLC if that person owned at least 50 percent of the property.  Thirty-day leaseholders would also have the right to vote.

Donna Mabry, 221 Hickman St.  said there were 1,100 artificial entities in Rehoboth. Half of each entity would give each entity two votes, she said, which could lead to more than 2,000 new voters added to the rolls. City spokeswoman Krys Johnson said the city did not have information on how many properties are owned in LLCs, as the property deeds do not list members of an LLC.

McGuiness said the intent is to have “one person, one vote.” However, as proposed, the ordinance does not prohibit voting as a resident and as a representative of an LLC, prompting Commissioner Toni Sharp to ask, “Is that what the ordinance says?”

Several people in the crowd shouted “No!” in response.

The ordinance also does not explain how ownership interest in an LLC would be demonstrated.

City code currently allows leaseholders who own 10-year leases to vote. Kuhns said that statute is outdated as few places have 10-year leases anymore. The draft ordinance calls for changing the leaseholder voting requirement to 30 days,

Commissioner Stan Mills said this item gave him great pause, as it would allow every business and visitor with a rental lease to vote.

“What are the ramifications of this?” Mills asked. “It’s broad enough that every lease could vote. Rental visitors could vote, even on a weekly basis. What is the intent? Is the intent to allow businesses to vote?”

Kuhns said he was open to compromise on this item. Ten years is outdated, he said, but 30 days is too short. He said he understood the concern that a business could come into town, get a lease, be around for a month, vote and then go out of business three months later.

Other changes to the charter include ending reimbursements to commissioners who have to travel to attend meetings. Although Mandalas and McGuiness said no one was actually receiving reimbursements, Commissioner Patrick Gossett said he had in the past. The city also had a legal fight in 2010 with former Commissioner Dennis Barbour, a nonresident commissioner, over travel reimbursements.

“I’m not sure what the benefit is of taking it out,” Sharp said. She said striking travel reimbursement might discourage nonresidents from running for office.

The ordinance also proposes to remove a rule that any voter who fails to vote in two consecutive elections is removed from the voter rolls. The ordinance would change that so that once voters are registered, they remain on the rolls for life. Kuhns said this is in practice with national voting law.

McGuiness said the intent of the ordinance is to address concerns she has heard from constituents since 2000. One issue in the ordinance is changing the residency requirement from six months to 30 days. The state Legislature in 2016 changed this law, and the city had observed it during the August election, but the change had not yet been codified into law.

Kuhns said the ordinance is a work in progress, and he implored the public to give the commissioners a chance to work on it.

“I ask the audience to give us some slack. I know there’s some changes, and people don’t want changes. This has come to me over the last five elections I’ve been involved in. This has come from a lot of people in the neighborhoods. With input from the community, we would like to suggest some changes. If the community doesn’t like it, we can move it back,” he said.

The towns of Fenwick Island and Henlopen Acres allow entity voting; Henlopen Acres allows a named representative of an artificial entity to vote. That person must file a certificate with the town certifying the vote is on behalf of the entity. Fenwick Island’s law is similar, but more far-reaching; it allows artificial entities such as corporations, partnerships and LLCs to vote.

However, critics point out that Rehoboth has far more artificial entities than Fenwick Island or Henlopen Acres.

Members of the public, who packed the new commissioners room for the public comment section at the Oct. 30 meeting but later filtered out as the meeting went past 10 p.m., voiced displeasure with the proposed ordinance.

Former Commissioner Lorraine Zellers said she was surprised and disappointed that LLC voting appears fast-tracked to a vote.

“Not every LLC is your friendly, next-door neighbor,” she said. “It could have damaging and far-reaching consequences on voting rights.”

Zellers also criticized Kuhns for not being specific on previous agendas that LLC voting would be discussed.

Gary Glass, 105 Country Club Dr., asked, “What is it we want to fix?”

Mabel Granke, 1013 Scarborough St. Extended, said voting should be done out in the open by people who are invested in the community.

“We do not need a shadow government,” she said.

Kuhns said the plan is for the commissioners to discuss the ordinance at two November meetings and to hold a Saturday, Dec. 2 town hall devoted specifically to voting issues. He said there will be additional discussion during the commissioners’ December meetings.

Sharp said the city needs to go over and above in communicating what the ordinance does so citizens understand its intent.

Lake Gerar, increased rental tax on Nov. 6 agenda

Besides continued discussion on elections, the Nov. 6 commissioners’ meeting will see the swearing-in of the seventh commissioner, Jay Lagree.

The meeting will also include a presentation by Todd Fritchman of Envirotech on cleanup initiatives at Lake Gerar, updates on the City Hall and ocean outfall projects, and discussion of audio and visual policies.

In new business, the commissioners will discuss the policies and procedures of commissioner meetings, and will discuss a proposal to raise the gross receipts rental tax from 3 percent to 6 percent.