Volume 12, Issue 11 ~ March 11-17, 2004

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Dock of the Bay

Hey Buddy, Can You Spare a Car?
Today’s hottest fundraiser is not all for charity

Whether for veterans, kidney transplants, the Boy Scouts or — as you’ll learn in this week’s Burton on the Bay column — cats, somebody out there wants to turn your junker into cash and share the proceeds with charity.

On the Internet, in newspapers, on the radio and even on telephone poles (there’s one on Rt. 2 in Severna Park), they say it’s as simple as making a phone call, setting an appointment and signing over your title.

“Why sell your car to a stranger when you can give it to a trusted friend?” one ad asks.

But if you give your car away, is it really going to charity?

Not always, according to the Internal Revenue Service.

“We encourage people to proceed carefully when donating vehicles,” warns commissioner Mark Everson on the agency’s website. “Supporting charitable activities through tax deductible contributions is an important element of tax law and serves the national interest. But people should know that in some cases the donation is providing little value.”

A California study is quoted on the site as saying that “eighty percent of charities contracting with fundraisers to run their car donation program received less than 60 cents for every dollar of a vehicle donated.”

Those numbers are backed up by Baltimore’s Steve Sellers of Donation Services of America, a subcontractor selling donated cars for the American Breast Cancer Foundation.

“Sixty percent of the cars we get lose money,” Sellers told Bay Weekly. “By the time we advertise the service, tow the car in, store it, clean it up and send it to auction, we don’t stand a chance of making any money.”

A 1985 Toyota Celica recently sold at auction for $30, Sellers complained. Registering had cost him $45, so he lost $15, not counting any other charges he might have encountered.

Sellers attributes losses like this to public greed.

“People try and unload their junk on us,” he claims. If people could sell the cars for a profit, he points out, they wouldn’t donate them. Since they can’t get cash, he says, “they want the tax deductions.”

Some cars donated to charity bring in the big bucks at auction, but a 1985 Toyota Celica garnered only $30.
According to Kelley Blue Book — the industry standard and nationally recognized guide of vehicle values — the value on the Celica and the amount its donor can deduct at tax time is $1,525.

To take any charitable write-off, you have to itemize your deductions.

It’s not all losses for Sellers, who would not reveal the amount that goes to the American Breast Cancer Foundation for each car donated, only saying that “it’s a minimum of $50” — even if he earns less selling the car.

He says he breaks even on 20 percent of sales and makes a profit on the remaining 20 percent.

One such score came on a ’95 Saturn whose owner had donated it because of “a blown transmission.” Sellers had the tow truck he owns bring the car in. His mechanic found that the transmission wasn’t working because of a filter. “We invested $10 and sold the car at a dealer-only auction for $650,” said Sellers.

The Blue Book value on a bottom-of-the-line 1995 Saturn is $3,800.

Sellers gives appraisals only for cars valued over $5,000. Any less and he gives donors a blank receipt. “They expect me to write them up a slip [receipt] so they can deduct thousands off their taxes,” he says. “I’m not going to help someone screw the government.”

What about the charities?
The American Breast Cancer Foundation makes only the $50 minimum on 60 percent of the vehicles sold.

Sellers counters that “it costs the charity nothing to sponsor this. If they did it on their own, they would have to absorb the losses themselves. Even if I lose, they make $50.”

Some charities take that risk and sell the cars on their own.

“We sign charities up and give them dealer licenses,” says Buel Young of the Maryland Vehicle Administration. “The law states that anyone that has a vehicle with the intent to sell it is a dealer.”

The state does not officially sanction any of the charities, but it does print a list of charities with dealer licenses. Young recommends that potential donors use a licensed charity. “If anything, use the list because they are trained to do the paperwork properly, which avoids any undue problems down the road,” he advises.

“If something were to happen with the vehicle, and the title wasn’t transferred,” he cautions, “the original owner who’s given the car away and forgotten about it could be held responsible.”

As for the value of the charities, Young — like the IRS, MVA and even Sellers — encourages people to do their research and homework.

Despite wear, tear and the high cost of doing business, your old car retains enough value to have dozens of charities hotly competing for the right to resell it. Over the last decade, car donations have become the most visible fund-raising campaign for charities.

“I’m not sure how much money I’ve made the American Breast Cancer Foundation,” says Sellers. “But it’s cost them nothing, and the money goes for mammograms for underprivileged women. That’s good enough for me.”

The IRS posts information at www.irs.gov to guide potential donors through the labyrinth of red tape.

— Louis Llovio

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Gassing up the Bay
Imports doubling at Cove Point Liquefied Natural Gas Dock

Inviting gas tankers into Chesapeake Bay has been good business for Dominion Resources, the Virginia-based energy giant that reopened Cove Point Liquefied Natural Gas Dock off southern Calvert County last year. By foreseeing the nation’s growing appetite for natural gas, Dominion has grown faster and made more money than the company expected. After only half a year in operation, they’re adding half as much new capacity now — even as they plan a next move to double total capacity.

“We thought that we’d do well even with low-level demand,” Dominion spokesman Dan Donovan told Bay Weekly. “It’s gone faster because of demand. It’s entirely demand driven.”

American demand is resurgent after a rise with the 1970s oil crisis followed by collapse in the 1980s. Competing with coal to power plants that generate electricity, cleaner natural gas now satisfies only about one percent of the nation’s energy needs. But projections push that share as high as 10 percent by decade’s end.

World trade is active and competitive. With much natural gas drilled at far-flung places like Algeria, Trinidad, Nigeria, Norway or islands in the Bering Sea, it’s common for Spain, for example, to be bidding against the U.S. for the fuel, which travels around the world by pipeline or, more commonly, ship.

Dominion’s Cove Point venture brings one or two double-hulled, 800 plus-foot tankers up Chesapeake Bay each week. Dominion unloads the vessels’ cargo of some 30 million gallons of liquefied natural gas. Yet neither the tankers nor the gas belongs to Dominion. They’re just the middle men. Dominion receives those ships at its docks and passes all that gas through its facility, its vaporizer, its massive storage tanks and its pipelines.

“We’re a turnpike,” said Donovan. The three shipping “companies that use Cove Point pay us for processing, and we also get more use of our pipelines.”

The gas itself is owned by three titanic energy conglomerates — Statoil, British Petroleum and Royal Dutch Shell — and sold to the highest bidder among Mid-Atlantic and Northeast corridor utilities.

Reflecting the crash of the American market, not a tanker had docked the mile-and-a-quarter offshore platform in two decades when Dominion bought the docks in 2002. By default, seagulls and fishermen had taken over the idle docks, whose pylons had been colonized by rockfish.

The fishermen got chased away when Dominion bought out Williams Gas Pipeline, which had planned the reactivation but was unable to come up with the money to see it through. Included in the 1,100-acre campus are the two unloading locks; four storage tanks, which are landmarks on the lower Calvert peninsula; three gas-turbine generators; an 87-mile pipeline that runs from the terminal to connect with three major interstate pipelines in northern Virginia — Dominion Transmission, Columbia Gas and Transcontinental Gas.

Before Dominion came to Calvert, most of the many federal regulators who watch over such enterprises had been satisfied.

In the shocked days after September 11, the Federal Energy Regulatory Commission concluded that the LNG terminal “will be operated safely” — despite its proximity to Calvert Cliffs Nuclear Power Plant. The U.S. Office of Energy Projects signed on. Further approvals came from U.S. Department of Energy, authorizing shippers who would use the docks to import the gas.

Then in the first week of 2003, Dominion won the approval of the Coast Guard, which secures the passage of those big tankers full of LNG. Gulls were evicted as refitting began on the docks and on the pipes that carry the gas ashore.

“We spent most of $180 million from May through September, and all of it in 11 months,” said Donovan.

In mid-July, the three tugboats pushed the 825-foot-long Norman Lady — carrying its commissioning load of LNG from Trinidad — up to the Cove Point Dock. A month later, the Federal Energy Regulatory Commission put the Cove back in business.

With Norman Lady’s arrival, Chesapeake Bay became home to the biggest of the contry’s four LNG facilities. Just how big was about to be proved.

Tankers had been expected to follow at the rate of roughly one every 10 days. But demand drove them faster. “It’s been a ship every five days on average from the beginning,” said Donovan.

The flow is steady. It takes about 12 hours to pump out a ship’s tank, which holds enough gas to satisfy the energy demand of 10 million homes each day. The LNG is pumped under the Bay to shore for storage in the four above-ground tanks that each hold nearly 16 million gallons. Meanwhile, revaporized gas is piped out to its owners at the rate of about one billion cubic feet per day.

Business has been so good that Dominion is already building the fifth tank approved with its original permits. At about 36 million gallons holding capacity, that tank will dwarf its four sisters when it’s finished next January.

Last month, Dominion announced its plan to build new tanks to expand its storage capacity by an additional 6.4 billion cubic feet to a total of 14 billion cubic feet.

“Most of the people in our area are getting the highest home heating bills in their lives, and I think that demonstrates the need for more supply,” said Donovan. “I think we’re filling that need at Cove Point.”


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Way Downstream …

In Annapolis, in case you missed it, Democratic leaders in the General Assembly want Gov. Robert Ehrlich’s $2.50 monthly “flush tax” to apply to more than 450,000 homes and businesses with septic tanks, not just families plugged into public sewer systems. Are they overreaching? Is it a ruse to kill the tax? Stay tuned as the Senate takes its turn…

In Britain, they’d probably laugh at our flush tax considering what Londoners might be facing. Bracing for new “sin taxes” to fight off budget problems, about half of London residents told pollsters last week there ought to be higher taxes on plastic bags that litter the environment. About one-third said that fast food should be taxed extra and one in five said a chocolate tax would be a fair way to raise revenue…

In Illinois, it’s not exactly state of the art, but the Army Corps of Engineers says it has a plan to keep giant Asian carp out of the Great Lakes: a $4.4 million electric fence. The voracious trash fish, some four feet in length and 75 pounds, have been making their way up the Mississippi and the Illinois rivers and now are knocking on the door in Chicago, waiting to burst through to Lake Michigan

In Brazil, what has happened at the Sao Paulo Zoo makes the scandal at the National Zoo in Washington look tame. In an animal murder mystery, police are tracking the killer of 59 animals, among them an elephant, monkeys and porcupines. Fifteen employees have been put on leave during the probe…

Our Creature Feature comes from Sri Lanka, where people aren’t the only ones underemployed. Elephants have been slowly and inexorably pushed out of their logging jobs by machinery, and their owners are struggling to pay enormous food bills.

Elephant polo? It caught on in Nepal, but not in Sri Lanka. Too slow. Some get hired out during Buddhist full-moon parades once a month. Others get rented out for tourism at $30 a day, but even that work is disappearing. The result: the elephant equivalents of couch potatoes. “My children don’t like them to work,” one woman told Reuters. “They just want to keep them as pets.”

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Last updated March 12, 2004 @ 1:37am.