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The Log • May 6 - 19, 2016 • 3 Grand Jury fi nds Santa Barbara Harbor followed regulations


Report answers questions about taxation, liveaboard rules, vessel operability.


By Parimal M. Rohit


SANTA BARBARA — A grand jury inves- tigation into the operational and tax collection practices at Santa Barbara Harbor found no wrongdoing by city or county offi cials, a published report revealed. The Santa Barbara County Grand


Jury issued its fi ndings on April 19 as part of an inquiry about how tax revenues are collected. Details of the jury’s fi nding were outlined in a report titled “City of Santa Barbara Harbor Operations: Are boat owners’ property taxes slipping away?” “The 2015-16 Santa Barbara County


Grand Jury found that the collection of property taxes on boat slips at the city of Santa Barbara Harbor is being done in compliance with applicable state law,” the report’s conclusion stated. “State law and internal policies are being followed concerning vessel registration. Lastly, it was found that city staff is following Santa Barbara Municipal Code … and its internal policies concerning the operability of vessels and live-aboard permits.” Grand jurors received requests to investigate several operations at Santa


Barbara Harbor, including payments of property taxes on boat slips, vessel operability, vessel registration, and liveaboard permits. “Citizens expressed concern with the fact that the [Waterfront] Department not only collects a slip transfer fee and monthly rent on slips; but property taxes are also collected from boat owners, despite the fact that the slips are city property,” Grand Jury Foreperson Maria Millsaps said in a released statement. “Questions were also raised about harbor policies con- cerning vessel operability and people living on their vessels. Lastly, a concern was raised about vessel registration numbers (CF numbers).”


Property Taxes


Grand jurors were asked how the county of Santa Barbara could collect property taxes on slips owned by the city. “It is general knowledge that state and local governments are exempt from property taxation,” the grand jury report stated. “Why is it, then, that the city can rent out its property (the slip) and require the slip holder to pay property taxes?” Boaters obtain a private interest in


government-owned property whenever the rent a slip, according to the grand jurors.


Grand jurors launched an investigation into the Santa Barbara Harbor’s tax collection practices after receiving requests to investigate several operations at the waterfront, including payments of property taxes on boat slips, vessel operability, vessel registration, and liveaboard permits.


“The jury learned that when the


boat owner rents a slip at the harbor, he or she obtains a private interest in government owned property. Because he or she has the exclusive right to that slip by renting it from the city he or she must pay unsecured property taxes,” the grand jury report stated. “This is in accordance with the regulations of the California State Board of Equalization, which defi ne ‘taxable possessory interests’ to include the right to ‘actual physical occupation’ of publicly- owned property ‘pursuant to rights not granted to the general public … such as … a permit to use a berth at a harbor.”


Vessel Operability


Grand jurors were also asked to look into whether Santa Barbara Harbor enforces a city code requiring all ves- sels in and around the boating venue to be operable. “The harbor enforces operability


in several ways,” grand jurors stated. “When the vessel is put into the slip, and when/if it is sold, operability is proved. If a complaint is received from other vessel owners or the public, harbor staff investigates and follows up to prove operability. Staff makes numerous visual observations of ves- sels daily.”


See SB TAX REPORT page 11


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