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September 10, 2008
Boating Safety Decal hot topic for Council
Thursday night meeting is critical
COLONIAL BEACH, Virginia (STPNS) -- Tomorrow night, Thursday, September 11, may very well be one of those well-attended Town Council meetings.
One of the items included on the agenda is a vote from Council on the proposed Boating Safety Decal; the revenue generating proposal currently on the table to replace the Boat Tax, the personal property tax levied against boats.
The personal property tax that has existed on boats in Colonial Beach in the past and will be billed for in November if the Decal program doesn't fly, has been discussed in Colonial Beach as long ago as June 11, 1992 when Agenda Item 68-92, a proposed ordinance to lower tax rates for tangible property was introduced to Council.
After the public hearing portion of that long-ago meeting, then Council member Kyle Schick joined the discussion saying, ?The marinas in town in winter are less than 50% filled. Right now they are 95% full and in January they will be 40% full.? Schick said that he supported a tax reduction and always would. Although the item was defeated, a personal property review committee was to be established.
Subsequent to that date, there were rumblings over the years about the personal property tax on boats, but the idea of trying to repeal it wasn't really pursued until 2004 when a committee comprised of marina and boat owners and chamber members came before Council and asked that the Town repeal the boat tax.
At the time, the Town was taxing boats at a rate of $3.70 per $100. This meant that a boat valued at $160,000 would be taxed $5,920, so to lose those monies from the budget might very well pose a hardship for the town. The committee argued that with the boat tax gone, owners would no longer flee the marinas just to avoid the tax.
They also projected that there would be a 30% increase in the town's revenue and that boats new to the community would increase by 70 each year. The expectation was also put forth that since the boats would remain all year with the tax gone, that the spending of the boat owners would offset the loss of the tax.
The Chamber of Commerce was charged with advertising that the boat tax was gone so that the maximum benefits would be reaped from the repeal and they would also gather data to verify the success of the program. The Council then voted to repeal the tax for three (3) years; a time frame they felt was ample to prove or disprove the success of the committee's proposal. A sunset clause would reinstate the tax at the end of the time period.
In May of this year the clock ran out and the boat tax came back. However, as bills won't be sent out until November, the town still has time to put something else in play to replace the tax. The Chamber of Commerce has expressed its opinion, members don't want it. They feel it will hurt the marinas, a strong sector of economic growth for Colonial Beach; however, the number of boats projected for each year's increase of 70 has not materialized. The devastating yacht center fire and hurricane Isabel may have impacted those numbers. There has also been no data gathered regarding the dollars being spent in the community.
Yet marinas have grown and the real estate taxes that they each have put into the community have increased substantially. So armed with that knowledge and using the argument that, as logic dictates they wouldn't have been building more slips if the slips weren't being used, more full slips translates into a greater number of boaters which should equal more dollars flowing into the community.
On May 21, of this year, the Colonial Beach Chamber of Commerce held a joint meeting with the Economic and Development Committee of the town to review what information would support the opinion that the boat tax should stay gone and what could be done to replace those funds.
What was brought to the table was a Boating Safety Decal which would have a fee correlated with the length of a boat; four categories: under 16 feet, 17 to 26 feet, 27 to 36 feet and 37 feet and greater. The decal prices would be $25, $50, $100 and $150 respectively. The task of sorting out a reasonable proposal fell to Vice Mayor Trish King and her economic development committee.
According to King, the document introduced to Council towards the end of August is still the document being contemplated at this week's meeting. King says, ?To my knowledge, there are no other changes but that could change at the meeting.?
There are several aspects of the newly proposed Boating Safety Decal program that attract comment from the public sector whether they be boat owners or not.
For one thing, there is the money.
The town needs to replace about $100,000 that is a budgeted amount expected to be derived from the boat tax. At the meeting in May, Schick projected that the town had about 800 slips. That would mean that using a decal fee of $100 would only generate $80,000 of those needed funds, assuming all slips are rented and all ?boats? fall under the guidelines for decal purchase as indicated in the definition portion of the ordinance; many may not. For example, the definition of boat reads, ?any watercraft designed to float or plane on water and provide transport over it, weighing more than 500 pounds but less than five tons, not used solely for business purposes. Any type of watercraft propelled by any type of motor including electric motor.?
By virtue of how this reads, commercial boats and boats in excess of five tons will be excluded. Five tons sounds really big, but how big is it really? How many boats will be excluded? A quick cursory review of boats for sale on-line immediately makes it evident that five tons is not an excessive weight. There is a Luke 5-Ton Bermudian Sloop and a Hillyard 5-ton wooden boat, both boats less than 28 feet. The original boating safety decal proposal had lengths of ?36 feet or greater? so it stands to reason that the Colonial Beach marinas hold boats in excess of 36 feet.
The question is, how many?
The ordinance also reads, ?All persons who moor, dock or store a personal watercraft within the Town of Colonial Beach (regardless of where the personal watercraft is registered) for a period of more than thirty (30) days, whether consecutive or cumulative, shall pay a boating safety fee in the amount of $100 by March 31 of every year?.
Who will reconcile the lists for transient boaters?
With about six different marinas that is six different lists monthly; all of which if things are done right will have to reconciled against one another each month, with rolling totals of days moored for each boat kept on file. Also exempt from the boating decal seems to be boats stored on land or at private docks. There is no accounting for how these boats will be included. So it may very well be that marinas may lose some of their smaller boats. However, anything that is done will be done manually as last month's Chief Financial Officer's report indicated that the Bright System would not be able to handle that task.
The ordinance also conflicts with itself in a few places.
For example it says that boats moored in excess of 30 days must display the decal, but it forbids a marina to lease a slip to anyone not displaying it. It says moored for 30 days but it also says the decal must be displayed by April 1st.
The ordinance also terms this a boating safety fee/decal, yet the decal really isn't associated with safety in any way.
The only boating safety touched upon under Virginia Boating Rules and Regulations is the Virginia Boating Safety and Education Certificate, ?commonly known as the Virginia Boating License.? These rules and regulations are administered by the Virginia Department of Game and Inland Fisheries. It has still to be ironed out who will enforce the display of the Colonial Beach decal. One area that will need to be addressed is how much authority does Colonial Beach actually have over the waters.
Another item of concern may be found at the end of the ordinance where it specifies, ?On January 15th of each calendar year, the Marina owners shall be invoiced and issued CBBS Decals for the Town of Colonial Beach based on 60% of slips in each Marina. The Marina owners will be responsible for full payment of the decals issued to them by the Town of Colonial Beach on or before May 1st of each calendar year?. The question here is whether or not this in and of itself is enforceable. How do you make the marinas do this? Will the town be affecting their business, their cash flow?
The ultimate issue may lie in the fact that Virginia is a Dillon Rule state ? Municipal governments only have the powers that are expressly granted to them by the state legislature, those that are necessarily implied from that grant of power, and those that are essential and indespensible to the municipality's existence and functioning.? Does Colonial Beach have the power to enact this fee in the first place? Some might argue no, based upon all the commotion over HB 302, the Northern Virginia transportation initiative that included in the bill the right for a $10 vehicle safety inspection fee and $10 regional registration fee to be charged. The passing of that involved the General Assembly, the Governor and the Circuit Court.
So yes indeed, the boat decal versus boat tax has attracted a great deal of public attention.
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