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Comer Questions Army Corps of Engineers’ Inconsistent Fees Charged to Marina Businesses

Comer Questions Army Corps of Engineers’ Inconsistent Fees Charged to Marina Businesses

Bill Stephens

February 4th, 2021

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Lack of transparency and uniformity exacerbates pandemic related financial struggles
WASHINGTON—House Committee on Oversight and Reform Ranking Member James Comer (R-Ky.) today wrote the U.S. Army Corps of Engineers regarding the lack of transparency and uniformity of fees charged to marina owners and businesses. Ranking Member Comer is requesting documents from the U.S. Army Corp of Engineers regarding their fees to ensure marina businesses are not unfairly charged and burdened by an unruly and inconsistent process.  “Every small business in America is hurting because of this pandemic, and to make matters worse, the Army Corps of Engineers is overcharging marina businesses and getting away with it. In Kentucky, tourism is crucial to our state economy, especially lake related tourism. To have these small businesses suffer due to hazy bureaucratic process is not only unfair, it could potentially destroy a business, kill jobs, and severely damage an industry. We must have transparency to rein in this process and ensure our businesses aren’t being damaged by government overreach,” said Ranking Member Comer.  The full letter is available here and below:  February 2, 2021 Lieutenant General Scott A. Spellmon Commanding General and Chief of EngineersHeadquarters, U.S. Army Corps of Engineers441 G Street NW Washington, D.C. 20314 Dear Lieutenant General Spellmon,  Committee Republicans are conducting oversight of the U.S. Army Corps of Engineers (USACE) use of administrative fees to collect money from marina owners. As such, we request documents and information about the process used by USACE to determine the amount of administrative fees marina owners are charged, including why there appears to be a lack of transparency and uniformity for these fees.    According to information reviewed by Committee Republicans, administrative fees are apparently charged to marina businesses that are not referenced in or authorized by the lease agreements USACE has with these businesses. While these administrative fees are often levied as real property transactions, it is unclear what connection many of these fees have with real property. In fact, 10 U.S.C. § 2695 provides a list of covered real estate transactions but USACE appears to often exceed that authority. For example, USACE apparently charged $20,000 to review a marina development and in another instance charged a marina $500 just to host an event. Additionally, USACE regularly charges $500 for approval letters that do not seem related to any real property transactions. Not only do these administrative fees appear to exceed the statutory authority of a covered real estate transaction found in 10 U.S.C. § 2695, but also raise questions about whether marina owners are unnecessarily paying excessive administrative fees while often operating small family businesses.  The administrative fees charged as real property transactions also appear to lack uniformity across regions of USACE. Identical transactions often cost more in some regions and less in others leading to fees disproportionally impacting business owners in some parts of the country. Just as concerning, there appears to be a lack of transparency about the amount of fees charged and when fees should be applied. If true, this lack of transparency makes it difficult for business owners to operate marinas when they are unexpectedly charged fees. Due to the COVID-19 pandemic, many small businesses throughout the country are already struggling to survive, and an arbitrary fee charged to a small business during this time may be enough to permanently end that business.   In order for Committee Republicans to better understand USACE’s use of administrative fees for marinas, please provide the following documents and information as soon as possible but no later than February 16, 2021. (1) All documents and communications between USACE’s headquarters and regional offices regarding the process USACE uses to determine if an administrative fee is treated as a real property transaction. (2) All documents and communications between USACE’s headquarters and regional offices regarding how the amount of administrative fees for marinas are determined in each region. (3) All documents and communications between USACE’s headquarters and regional offices with marina owner/operators regarding the revoking of lease agreements before a lease term has expired.  (4) A copy of any fee schedules for administrative fees used in each region of USACE. (5) All documents and communications relating to any effort to make administrative fees uniform across regions. Additionally, please make arrangements to schedule a briefing with Committee staff on this matter. Please make arrangements to schedule the briefing no later than February 9, 2021. To schedule the briefing or ask any follow-up or related questions, please contact Committee on Oversight and Reform staff at (202) 225-5074.  The Committee on Oversight and Reform is the principal oversight committee of the U.S. House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X. Thank you in advance for your cooperation with this inquiry. Sincerely, James Comer Ranking Member Committee on Oversight and Reform  cc: The Honorable Carolyn B. Maloney, ChairwomanCommittee on Oversight and Reform
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