Ocean View council opposes bill restricting municipal taxing authority

Date Published: 
May 16, 2014

The Ocean View Town Council voted unanimously this week to officially oppose Delaware House Bill 333, which would limit all municipalities’ use of their general or special powers in regard to taxation.

Town Solicitor Dennis Schrader told council that all municipalities in the state of Delaware, with the exception of Wilmington and Newark, are not home-rule municipalities.

“We are the benefactors of a municipal corporation charter granted by the General Assembly, and all of the powers that the Town of Ocean View has is delegated to these towns and to us by the General Assembly,” he explained. “We only have the power to zone because the General Assembly says we have the power to zone, and are limited by the statutes that grant that power to us.”

Section 11(a), Article VIII, of the Delaware Constitution provides that “No tax … may be imposed or levied except pursuant to an Act of the General Assembly adopted with the concurrence of three-fifths of all members of each House.”

A recent Chancery Court opinion has limited the State’s powers under this section of the Delaware Constitution by allowing a municipality to impose a tax through an “all powers” clause in a municipal charter, even if there is not specific authorization by an Act of the General Assembly to impose such a tax.

If passed, the bill would stipulate that a municipality may only impose a tax within its jurisdiction if such tax is expressly authorized by an act of the Delaware General Assembly.

“It’s going to be kind of a logjam,” said Schrader. “For example, if we have a hotel come into town and we want to impose a room tax, we would have to go to the General Assembly, have that Charter change approved by two-thirds of the majority of each House, signed by the governor and then returned to us for adoption of the enabling legislation in order to impose it. It would take a year by the time you made the decision to impose the tax until such time you were able to connect it.

“Multiply that by 26 municipalities and 57 statewide, and the whole month of June would be dealing with Charter provision.”

Schrader said he had been told that the Sussex County Association of Towns had opposed, as will the Delaware League of Local Governments, along with many other municipalities, including Bridgeville.

“I see this as a disaster for all small municipalities,” said Mayor Walter Curran.

“I absolutely agree,” added Councilman Bob Lawless. “Anyone who can reach anybody who might have a voice ought to do that. I have already spoken with Sen. [Gerald] Hocker, who agrees that this is an absolutely awful piece of legislation and should be killed.”

The bill was expected to be on the House floor for a vote on May 14, after the Coastal Point’s press deadline this week. If approved, it would also need to be approved in the state Senate and signed into law by the governor.

Council denies Blue Heron Landing

subdivision extension

The Ocean View Town Council this week also unanimously denied a request by Blue Heron Landing to introduce an ordinance that would exempt them from the sunsetting provision that requires a development to begin construction by a certain period after approval of a subdivision plan. The six-lot subdivision is located on Woodland Avenue.

In June 2005, the subdivision was granted preliminary approval. In June 2006, it received final plan approval. Under the Ocean View Town Code then in existence, the developer had five years in which to commence construction of the project.

Schrader said the zoning code was definitive in terms of four items that were to be looked for in terms of commencement of construction, and stated that none appeared to have been done during those five years.

“They include the right-of-way to be cleared, roadway to be rough-graded, drainage system and stormwater management facilities upgraded, and sediment and erosion control management were in place,” he said, adding that no permits were applied for or paid for, nor were connections made to any public utilities.

Schrader said that none of those requirements had transpired before the August 2011 sunsetting date, three years ago.

“I think the recommendation of staff to council is the matter is so stale that the land-use planning regulations of 2014 are so different from those that were in place in 2005, that if the gentlemen in question wish to reapply, they may do so and seek another subdivision.”

“It seems to me this thing couldn’t be deader,” agreed Lawless, opposing the request for an extension. “If these folks want to create a subdivision within the town, they know the process and have to comply with it.”

“I think it’s past life support. I think we want to be as consistent as possible. To keep it dead would be consistent. To do otherwise would set a very bad precedent,” added Curran.

Greg White, a partner in Blue Heron Landing, told council that he believes the extension should be granted.

“We continue to get tax bills for six lots. If the grass gets cut, we get billed for six lots. According to our attorney, Ray Tomasetti, he said it’s being treated as a subdivision, it looks like a subdivision, and it’s a subdivision by defacto,” he said. “How can we be paying taxes on six lots that we’ve been told that aren’t six lots?”

“I don’t think there is such a thing as a defacto subdivision. We’re here on the issue of whether or not an ordinance should or should not be introduced to extend the subdivision, not a matter of the taxation,” responded Schrader, adding that White could contact Town Finance Director Lee Brubaker to address the tax issue.

White also stated that the Town did not properly inform him and his partners of the sunsetting rule.

“We never got a heads-up… Never was there a word that this thing is going to sunset,” he said.

“If you were unaware that the ordinance provided for a sunset when you were approved, you were ill-advised by your counsel,” said Lawless. “The ordinance indicates approval is for a five-year period, after which it ends. The five-year period elapsed; it ended.”

“To say that we have to tell you you’ve expired is like saying we have to tell you it’s against the law to speed,” added Schrader. “I know of no jurisdiction in this county that approves subdivisions that allows them to last forever.”

The council unanimously voted to not introduce an ordinance to extend the sunset rule for Blue Heron Landing.

In other Town news:

• The Millville Volunteer Fire Company applied for another grant from the Town for $10,000 to fund additional training for their firefighters. Council approved the request, which is funded through the Town’s Emergency Services Enhancement Fund.

• Kercher Engineering prepared a pavement management report for the municipal streets within the town. The report includes street inventories, summary reports and road conditions. The draft is being reviewed by staff and will be submitted to council at a future date for consideration of adoption.

• Town Manager Dianne Vogel and Public Works Director McMullen have met with Sussex Correctional Institute Warden Bill Oetell regarding the use of prisoners to cut grass at Town facilities. The Town entered into a memo of understanding to have property at 201 Central Avenue and 1 Colt Lane cut on a weekly basis. The prisoners will also do a one-time cleanup of John West Park.

• June 2 will officially be Dunes Pink Classic Day in Ocean View. The council unanimously approved the observation recognizing the Women’s Gold Association of Bear Trap Dunes, which holds a yearly breast cancer fundraiser that, in its first seven years, raised more than $200,000 for research and treatment.

• Vogel said the Town’s annual Homecoming event last Saturday was very successful, and had a steady number of attendees throughout the day.

• The Town is currently advertising for a Public Works maintenance employee.