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must be made that the acquisition is necessary, sometimes A B WETTER AY to replace an aging asset or sometimes to expand a ? eet The better way is for the tax-exempt or municipal user due to increased demand or more sophisticated technology. to lease rather than purchase the vessel. Leasing is a ‘win-

NYC’s newest ? reboat, which only cost $4.7 million, the win’ for the shipbuilder, the lessor and the lessee. Consider

William M. Feehan, was named after FDNY’s First Deputy this: the shipbuilder sells and builds a service vessel that

Commissioner who perished in the World Trade Center on is purchased by a lessor who could be a bank, an insur-

September 11, 2001. She was christened last November. In ance company and/or a pension fund which offsets the addition to pushing water out at 8,000 gallons per minute, cost of the vessel by depreciating and renting/leasing it to she incorporates the newest technology in ? re? ghter pro- the end user. The end user enjoys a highly reduced cost of tection from chemical, biological, radiological and nuclear ownership by paying monthly rent, which smoothes out hazards. Needless to say, she was speci? ed and built to meet any bumps in the budget or appropriations (easing the tax the challenges of this century’s threats which have evolved burden on the taxpayers) and has the ability to exit the to demand ever more sophisticated solutions. lease when new vessel or systems technology arrives that

After the speci? cation stage has been completed, vessel improves the safety, performance or reliability of the cur- cost becomes the issue to be considered. As the end user rent rental vessel. It keeps skilled workers employed and submits a request to be included in the budgeting process, goods and services related to the design and building of once approved, funding requires an appropriation be made the workboat.

for the funds. Funds are sourced either from internal or In addition to stimulating the new boat building indus- external resources and may entail complicated bond issues, try in these challenging times, the secondary market for construction loans, or increasing taxes to pay for the equip- the “last” generation of vessel technology may have found ment. Increasing debt, increasing the budget or raising increased popularity in purchasing or leasing these used taxes to generate revenue is not the most effective way for or off-lease vessels by the end users whose demand (and a politician to win friends. Conversely, for the shipbuilder pocketbooks) do not require the sophistication of a boat and end user it is just one more hurdle to be overcome. like the William M. Feehan.

As technology moves ahead, whether skimmer technolo- gy, counter terrorism, construction, energy or other public services, new vessels will always be, for those tax-exempt or municipalities that can afford them, a necessity. Certainly a big city like New York, Chicago or San Francisco has the resources to buy the newest, most advanced technol-

Richard J. Paine, Sr. is the National Marine Sales ogy available. But what about those smaller communities

Manager at Signature Financial LLC. He can be reached whose tax base does not support the newest and best ser- at [email protected].

vice vessels available?

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