Rehoboth Beach likely to table allowing LLCs to vote

Gray Hughes | The Daily Times

Rehoboth Beach will not be going forward with its idea to allow limited liability companies to vote in city elections.

At the Rehoboth Beach Commissioners workshop meeting Monday, the commission decided that it will vote to table the proposed ordinance at the Dec. 15 regular meeting.

"Those who put this on the agenda on Sept. 15 have not made an analysis, have not made a case, we have no statistics, we are not able to answer the question ‘what are we solving for?’ and I am embarrassed for myself that I actually am complicit in this during the months of October and November," said Commissioner Toni Sharp.

The Rehoboth Beach Commissioners came to the decision after a town hall meeting on Dec. 2 where many citizens voiced their opposition to the plan. The consensus of the commissioners Monday pointed to a vote Dec. 15 that will likely table the ordinance.

While officials who were in support of the ordinance, like Mayor Paul Kuhns, said it was about giving a voice to secondary homeowners who pay taxes and use LLCs for estate planning purposes, objectors worried about encroaching corporate influence on local politics and the potential for voter fraud by secretive shell companies.

The city commission appeared to be split into two camps on whether LLCs should be allowed to vote.

Those opposed to the idea, Commissioners Sharp, Patrick Gossett and Stan Mills, based their objections on the comments received at the town hall.

Commissioners Kathy McGuiness and Lisa Schlosser both were in favor of doing more research into the idea, but were still supportive of tabling the measure.

"I am happy to listen to what the community says, and I am also happy to listen to what constituents say," McGuiness said. "I believe that we did the right thing by continuing the conversation."

There is more work to be done for clarity, McGuiness added, and there needs to be more consistent data on the topic before moving forward.

However, Mills said he will remain opposed to the idea no matter what.

Mills is strongly against the idea, and said previously that no one in his 10 and a half years as a commissioner has approached him about allowing LLCs to vote.

No amount of data will convince a super-majority of people to get on board with the idea, he added.

"My preference would be to just drop it at this point," Mills said.

BACKGROUND: Rehoboth Beach tries to address concerns over allowing LLCs to vote

Allowing LLCs to vote also drew stern condemnation from outside groups.

The proposed charter change drew the attention of the American Civil Liberties Union in Delaware, who warned recently that such laws may violate the Constitution and could result in lawsuits.

"We fear this may be an attempt on the part of elected officials to choose their voters, rather than the voters choosing their elected officials," Kathleen MacRae, executive director of the local ACLU, wrote in a letter to Rehoboth officials Thursday.

In an interview with The News Journal, she said by allowing nonresident property owners to vote while excluding other nonresidents who might have an interest in local politics, towns could be violating the Equal Protection Clause of the 14th Amendment.

MacRae did stop short of threatening to sue Rehoboth Beach in the interview, saying the ACLU will wait for a response to the letter.

BACKGROUND: Rehoboth proposal to let LLC owners vote creates stir

The proposal also drew condemnation from many Rehoboth Beach residents.

Sturges Dodge, 66, of Rehoboth Beach, said in a previous interview that she was born and raised in the city, and the proposal to allow LLCs to vote gives her pause.

Rehoboth Beach is under a lot of pressure to develop like other seaside resorts, she said, and supporting people who have investment properties in town rather than supporting the residents could potentially erode the city’s quality of life.

“So my feeling is that if you make the atmosphere more amenable to people purchasing properties to run them like businesses, there is definite potential to damage the charm of the town,” she said.

In addition to deciding to table allowing LLCs to vote, the commission will also not be voting on three other voting rights issues at the Dec. 15 meeting: voter purging laws; requiring residents to reside in the city for at least 30 days before being allowed to vote; and allowing freeholders to vote in the city after 30 days rather than six months.

These proposed changes to the charter would wait to be voted on until more proposed charter changes could be included. All charter changes must be approved by the Delaware General Assembly.

Margie Fishman of The News Journal contributed to this report.

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