Tax cap on large vessels floated in Dillingham
May 17th, 2013 | Carey Restino
Dillingham's location as well as its long ice-free season make it an attractive place for large vessels to haul out for the winter. But thus far, two things have stood in the way of large barges and other vessels wintering over in town - the lack of large vessel haul out equipment and the lack of a tax cap.
"Dillingham is situated in a strategically beneficial location for storing large marine vessels such as tugs and barges, landing craft, tenders, ice barges and the like," said Yeganeh Ataian, president and CEO of Bristol Alliance Fuels, one of the major fuel suppliers in the Bristol Bay region, in a statement read to the Dillingham City Council last week.
Ataian cited the areas regular tides, its proximity to primary shipping channels, and a longer ice-free season as reasons why the community would be an attractive place for large vessel haul out and storage facility. Bristol Alliance Fuels would like to build a large marine industrial center providing a large vessel marine haul out and storage operation at its facility.
But large vessels have historically looked elsewhere in large part because of Dillingham's tax structure, Ataian said. Currently, the Bristol Bay Borough has a tax cap on large vessels, which limits the property tax levied on commercial watercraft to no more than $3,900 per year. Ataian asked the city to consider instituting a similar tax cap. Currently, large vessels could be liable for paying up to $130,000 in taxes, depending on the value of their vessel. Other communities, such as Naknek, Homer and Seward, have tax caps that attract vessels to their locations, she said.
If the city of Dillingham exempted vessels on property value in excess of $300,000, mirroring the Bristol Bay cap, vessels would be interested in hauling out.
Ataian said her company has been approached by large vessel owners who are going to move their ships because of a lack of space in other areas. If a Dillingham had a facility and a tax cap, she said, she is confident large vessels would come there.
Rather than proposing to build a large ramp, Bristol Alliance Fuels' plan is to purchase large inflatable bags to move vessels up out of the water. The council heard an explanation of how the inflatable bags - like logs - would be used to move the vessels up out of the water. The company is ready to purchase the equipment as soon as it gets the go-ahead from council that it is moving forward on the tax cap.
Rose Loera, city manager of Dillingham, said the council hasn't met yet to discuss the idea, but is planning a meeting soon to consider the idea. She said since the city isn't currently taxing any large vessels, there would be no lost revenue to the city from implementing a tax cap.
"It appears to be a win-win recommendation for the city as we are not taxing any large vessels at this time so this would be new revenue," Loera said in an email Monday.
The council must introduce any change in code at a regular council meeting and then hold a public hearing on the issue, followed by a third meeting to vote on the proposal.
Ataian noted that drawing large vessels to Dillingham for the winter months would not only provide income via taxes, but would also provide job opportunities for those skilled on working on the vessels, as well as those bring more people to the area.
Ataian said she enjoyed her interactions with the council and said they showed interest in the proposal.
"This proposal .... Will promote community development as well as create many jobs during the slow season for residents of Dillingham," Ataian said. "We are a local business and always use the local residents for jobs (and) works related to our business, and the council is aware of that. I also believe this proposal will place Dillingham on the map for all the marine vessels and different businesses related to them, which translates into economic gain for both the City of Dillingham as well as the residents."
Carey Restino can be reached at email@example.com.