Four out of five taxing entities on Galveston Island have voted unanimously to approve a settlement with Thames Shipyard and Repair Company regarding the valuation of a dry dock purchased by Thames Shipyard in 2003; and the fifth entity will consider the settlement on Tuesday.

Galveston City Council and the Galveston College Board of Regents approved the settlement on Friday, Galveston County Commissioners Court approved the settlement in a special session this morning and the Galveston Independent School District Board of Trustees approved it in a special session this afternoon.  The Board of Commissioners of Navigation District #1 will consider the settlement on Tuesday.

Mark E. Ciavaglia of Linebarger, Goggan, Blair and Sampson, L.L.P., the delinquent tax attorney for the entities, has been making the rounds to explain the settlement.

“In late 2003, a company named Thames Shipyard negotiated and purchased a floating dry dock that was located here in Galveston,” Ciavaglia said at this morning’s commissioners court meeting.  Listen

“The intention was that they were going to purchase that and move it to their home base in New London, Connecticut.”

Ciavaglia said that the move was delayed because of the need for repairs and the dry dock was included on the tax rolls and assessed for taxes by the Galveston Central Appraisal District in 2004.

“In March 2004 the repairs were completed and the dry dock was in fact towed to New London, Connecticut, where we believe it still is,” he said.  “In the fall of 2004, in accordance with the Tax Code, a tax bill was sent to Thames.  It apparently was ignored.  In February 2005, those taxes went delinquent and began to accrue penalty and interest.”

The dry dock was valued at $4.5 million, which generated a tax bill in excess of $140,000.

Ciavaglia said that Thames resisted payment of the delinquent taxes in state and federal court, but has now agreed to put the issue to rest.

“In lieu of further litigation they would be willing to pay the taxing entities 70 percent of everything that’s due,” Ciavaglia said, explaining that the county’s share of the settlement would be $43,280.98.

Ciavaglia said that Linebarger, Goggan, Blair and Sampson would be willing to continue the litigation, which might take more than two years before it is settled, but on the recommendation of Don Glywaski, first assistant director of the Galveston County Legal Department, the commissioners court voted 4-0 to approve the settlement.

“Mark suggested that there is a conflict in him recommending a settlement because he gets paid when the taxes are collected,” Glywaski said.  “I don’t have that conflict so I’m going to recommend that you accept this settlement.”

Tax Assessor-Collector Cheryl Johnson, who was at the commissioners court meeting, agreed that the settlement is a good idea.  County Judge Mark Henry was absent, thus Commissioner Ken Clark chaired the meeting.

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