Country Inn payment plan rejected by chief

Berkeley Springs Police Chief Craig Pearrell has declined to accept a proposal from The Country Inn to pay off more than $30,000 in overdue lodging tax in $500 installments.

Mark Garfinkel, an attorney for the Inn, presented the proposal to Pearrell and the Bath Town Council last week. Town officials have referred the proposal to their lawyer, Richard Gay, for review and advice.

Under the town’s Hotel/Motel Tax ordinance, lodging businesses collect a 3% room tax and must send those funds to the town each month, along with a report showing how much tax was collected. The money is then divided with half going to community groups engaged in beautification, cultural or recreation projects and half to Travel Berkeley Springs, the local tourism council.

The Country Inn has made only one hotel tax payment in the last 18 months. Enforcement failures by the town were not addressed until recently, after prodding by Travel Berkeley Springs officials, who have scaled back their promotion efforts due to lack of funds.

Since the start of 2011, the town’s tax collection efforts have become more formal. They include a delinquency letter penned by Mayor Susan Webster and investigations by Chief Pearrell into possible criminal charges against overdue businesses, as allowed by law.

Tough economy to blame?

In his February 13 letter on behalf of The Country Inn, attorney Garfinkel addressed the delinquent tax. He blamed the economic downturn for drops in room occupancy at the Inn and financial difficulties at that business.

“The Country Inn fully accepts responsibility for its failure to pay the hotel taxes it collected for the Town of Bath when due. The Country Inn acknowledges that it owes a significant amount of hotel taxes to the Town dating back to July 2009,” the letter said.

“The Country Inn has every intention of paying, in full, all outstanding amounts and making current payments going forward. It must be made clear, however, that none of the taxes collected were misappropriated, or used by the Inn’s owner in any other way, other than to help make payroll and cover essential monthly operating expenses like utilities in order to keep the Inn open,” Garfinkel’s letter said.

He warned that “unless the situation changes, the Country Inn will be forced to close its doors.”

The letter calls the town’s efforts to collect the overdue tax “legally justified” but warns that the town should “take into account the financial problems that the Inn currently faces.”

Payment proposal
The tax payment schedule offered by the Inn includes a promise to send the required monthly reports and current payments, starting March 15. Reports for December and January would also be supplied to the town, rounding out a full picture of how much back tax is owed.

The Inn proposes to begin $500 monthly payments on the back tax in June. A lump sum payment is also promised, if the Inn receives additional financing or investment, the proposal said.

Chief Pearrell said Friday that he advised both Garfinkel and the town council that proposal was “not acceptable.”

“It’s not going to happen that way,” Pearrell said.

His main concern is a three-year statute of limitations, which would shorten the time frame he has for lodging criminal charges related to some of the oldest tax delinquencies. “The ball is in our court. We will try to resolve this matter civilly,” Pearrell said.

He has asked the attorneys to work out a modified payment agreement within 30 days and present it to town officials for review.