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Lewes, Delaware
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April 14, 1995     Cape Gazette
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April 14, 1995

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12 - CAPE GAZETTE, Friday, April 14 - April 20, 1995 Rehoboth rental tax charter change still in limbo By Trish Vernon Since April 1, resort area RE- ALTORS have been collecting a 3 percent "gross receipts tax" on all rentals of property presently not paying the state's 8 percent lodg- ing tax with little or no fanfare. "We have some people asking about it," said Jim Kiernan, broker at Coldwell Banker Rehoboth Re- sort Realty, who was a spokesman for the REALTORS who opposed the measure f'n'st adopted last Oc- tober. "Most renters are taking it as the commissioners predicted - they are not overwhelmingly re- luctant to pay it, as everyone is used to living with taxes. "However, we've had a few seasonal tenants who pay $10,500 and higher, who then have to pay another $315 on top of that and they ask what can be done about it. But actually, the general reac- tion is more curiosity than coln- plaining," Kiernan said. The REALTORS have had two recent meetings with city officials to get the tax collection system up and running. Checks for all taxes collected since April 1 are due next Feb. 15, with reports filed to the city by January, along with the address of the rental property. According to City Manager Greg Ferrese, who noted the willing- ness to cooperate on the part of the REALTORS, the tax collected will be kept in a separate account but included in the general fund and not earmarked for beach re- plenishment and jetty projects, as had been suggested last fall. It has been estimated that the new tax could generate an addi- tional $300,000 for city coffers once it covers all rentals within the city limits (many renters signed contracts before April 1 when the tax went into effect), al- though some REALTORS believe that estimate to be low if present prices prevail. But collection of the tax wasn't entirely settled when the board of commissioners, under threat of lawsuit from the REALTORS, re- vised the gross receipts tax in No- vember, even though they met eye-to-eye on the major points of contention. (Those points includ- ed adding year round rentals to the tax; changing the due date; push- ing back the effective date from Jan. 1 to April 1 of this year; and keeping the information confiden- tial.) They agreed upon adding a clause which states that when the designated agent is a real estate broker or agent, that agent "shall" collect the tax and pay the tax to the city, unless authorized in writ- ing by the owner of the property to collect the tax and remit it to the owner, so that the owner can pay it to the city. The first version said the agent "may" collect the tax, which, the REALTORS felt, left collection of the tax too open ended. However, the REALTORS told the board they would prefer Re- hoboth seek a charter change al- lowing the city to institute a true rental tax, collecting directly from the tenant rather than a gross re- ceipts tax. "We feel the language of a rental tax would be easier on everyone," Kiernan said. REALTOR Bill Vernon, a for- mer state legislator, told the board last fall he would be willing to as- sist with any necessary refining, as well as find a sponsor in the legislature and help to see it through to passage. As of earlier this week, he hadn't heard from City Solicitor Walt Speakman, who was to draft the charter change, and there are only two months left in this year's legisla- tive session. Speakman did send a draft to city hall, but, according to Mayor Sam Cooper, 'Tm not sure there's a lot of support on the board to go ahead with seeking a charter change. I see a lot of problems and questions." For instance, would the city limit the tax to what is presently covered, or broaden it to motels and hotels? Would there be a 3 percent cap or no cap at all? And, if the legislature refused to pass the measure, would it shed a bad light on the fact that Rehoboth is collecting a tax on rentals at all? It will be up to the board of commissioners to decide whether they want to pursue the matter fur- ther and as of this week it isn't on the agenda for discussion at the April 21 monthly meeting. Rehoboth parking permit plan lumbering through court system By Trish Vernon The lawsuit William Moore filed on behalf of Maryland and Olive avenues residents (MONA) over the legality of taking their parking permit system to-referen- dum and subsequent motion to dismiss filed by the City of Re- hoboth, which claims that MONA isn't in a position to appeal, is inching its way through the court system. On Friday, April 7, both sides agreed to the briefing schedule set by Superior Court, with Re- hoboth's opening brief due by May 7, and MONA's by June 7, with the city's reply due by June 22. City Solicitor Walt Speakman vowed to see the matter through the court system as quickly as possible, hoping that the motion to dismiss will be granted and that the city will be saved the expense of the court action on the lawsuit itself. Moore maintains they are vio- lating the equal protection clause, by interpreting the city's charter as allowing those who tried to bring the parking permit system to referendum as having the right to appeal, but not allowing MONA, which sought the permit plan, to get a ruling on its claim that the system isn't subject to referendum because it is a revenue generating measure. They also maintained in the Oct. 3 appeal, that the city act- ed illegally in allowing petitioners to submit additional signatures to the referendum petitions. "Everyone should have the right to appeal and we're directly af- fected by the outcome," Moore said, adding that if their concerns are dismissed, "they are digging a bigger hole." He has been advis- ing his clients that he would rather pursue the constitutionality of the city's nonresident vote, rather than continue with the case over the referendum itself. Moore has vowed to prove that the city's han- dling of the entire matter is evidence that the pre- sent form of government is "dysfunc- tional", and MOORE that if only those who claim Rehoboth as their primary residence have a voice in city matters, the machinery will work more smoothly and fairly. The permit plan was enacted for the second blocks of both Olive and Maryland last summer, when residents there fought parking me- ters and was put into effect for a short time, until petitions seeking either repealing the permit ordi- nance or taking it to public refer- endum were filed with the city. On the same day that Moore filed the suit in Superior Court which seeks a ruling on the permit ordinance being subject to refer- endum, Commissioner Warren MacDonald offered two variations on the present permit ordinance, which is in limbo while the matter is in the hands of the court. At that Oct. 3 workshop, he of- fered one system designed only for those two blocks and another which would allow systems to be set up in other unmetered areas if a certain percentage of residents favored it. MONA said it would drop its lawsuit if either plan were adopted and vowed it wouldn't pursue any other legal fights against the city. But the board of commissioners was advised to allow the court to settle the matter. If the motion to dismiss is granted, then the city must decide whether to repeal the ordinance or hold a referendum. It's the board's belief that if they were to rescind the present ordi- nance and adopt either of the other two proposals, a referendum drive would gear up again. In the meantime, residents on blocks on the south side of town would like the city to consider set- ting up permit plans for them, as they are increasingly upset over the number of vehicles parking there. As Dewey Beach continues to tighten up on its parking regula- tions, more people are finding the unmetered blocks in south Re- hoboth an ideal area in which to leave their cars while visiting Dewey. They've been told there's noth- ing the city can do until the matter is settled in court. Topless Continued from page 1 the sun with their tops uncov- ered," and women who want to do this should have the same free- dom. Their intent, they note, is three- fold. They want to "arrange some time for women who would like to sunbathe this way; make a point about the archaic rules - to show that nothing bad happens when ladies also uncover their tops on a hot beach day;" and "breaks some ground mid begin to pave the way for doing it more freely." Topless sunbathing is becoming more accepted around the country, they said, and they hope to get several hundred women of all ages to join them in Rehoboth Beach on those dates to help start an alternative sunbathing option for women in our area. Instructions, for those who plan to participate, include gathering on the beach at Norfolk (which they term as a "liberal" area of the resort) about halfway down to the ocean around noon. Together, exactly at 1 p.m. "we will quietly slip off our swimsuiI tops for sunbathing, relax and en.- joy your freedom and our beach day," the flyer states, reminding everyone to bring the SPF-15 or SPF-30 for those who haven't been tanning their breasts lately. The rain dates are scheduled for the Sundays following each of the three dates. They urge those with their tops off to "keep it calm and quiet and avoid creating a disturbance. Let's enjoy our sunbathing with- out deliberately drawing extra at- tention to ourselves." If the event takes place as planned, they can be guaranteed to receive attention - and not neces- sarily just from the media and in- terested spectators. Upon reading the flyer, Re- hoboth City Manager Greg Fer- rese said "we do not allow any nu- dity on our beaches. There are a lot of children on our beaches and we can't tolerate that kind of be- havior. Anyone who violates our ordinances will be arrested and charged, as we have done the few times it has happened in the past. If we lose our court case, so be it." Rehoboth Police Chief Creig Doyle added that they deal with large numbers, such as underage drinking parties where 30 people are arrested, all of the time during the summer. "If we have to use Convention Hall to process them all, then we'll do it. And I can assure them that if one hundred women engage in indecent exposure, which is against state statutes, then we'll arrest them," Doyle said. Ferrese went on to question the legitimacy of the flyer, as there have been no return addresses on the envelopes, nor phone numbers and last names. One of the first persons to fax him a copy was Jennifer Burton from Henlopen Acres Town Hall, who received a flyer in the mail addressed to the Henlopen Acres Beach Club. "I passed them out to our mayor and commissioners and the guys who run the beach club and they all thought it was hyster- ical." Burton said someone told her they thought it might be a promo- tion for the Beach Bull, a lewd, satirical, politically incorrect pub- lication distributed widely in the resort area. "Maybe everyone will gather thinking they'll be watching these women go topless and then when they have everyone's attention, they'll do something to bring at- tention to the publication," she of- fered. The legitimacy of the call for the topless gathering may remain in question until July 22 unless these women come forward and leave themselves open to media attention and, perhaps, harass- ment. But the flyer vows that these three dates are just a beginning: "We want to open the calendar af- ter that and maybe every weekend in 1996. We are asking men to show their support by helping to keep the day calm." They are requesting those who receive the flyer to circulate it in places "accessed by women" or by passing out photocopies at lo- cal beaches. The women also asked this newspaper to publicize the events in an effort to draw par- ticipants. If a couple hundred, or even a couple dozen women do discard their tops on July 22 in Rehoboth, "calm and quiet" aren't likely to prevail.