North Beach Community Week in Review, or…What’s been in the Rumor Mill this Time?

saltito.westbnd  From time to time we will bring readers a slice of some of the major (and minor) rumors floating around EDR and the North Beach communities. We will attempt to elaborate (and, speculate) on some of these stories in order to get at what might be something close to the truth. But, we don’t guarantee a hundred percent accuracy. Final judgment is left to the reader. We encourage our readers to jump in and further illuminate or elaborate on a story. Chances are, you know more than we do!

If you have rumor-worthy items you would like to include, please feel free to mention them in the comments, or, pass them along to bajasisters@gmail.com, or, contact us so that you, too, can become an author!

Roadrunner Grill and Bar Closingroadrunner-outside

Short Answer: Not true for 2014.

Long Answer: No doubt about it, the border area VAT increase (Value Added Tax) from eleven to sixteen percent, with its accompanying paperwork nightmare, will hit smaller establishments, like the Roadrunner, hard.  However, reliable sources say the Roadrunner Grill and Bar, as well as the Roadrunner Downstairs Deli will remain open until at least June 1, 2014. The RR Grill and Bar will continue to offer breakfast, lunch, and dinner through June 1. However, beginning June 1 the RR Grill and Bar (upstairs) may be permanently closed.  Starting in the 2014 fall season, The Roadrunner will reopen in its “original” form, i.e. as a cafe/grill/deli, in the old downstairs location. Same great service, same great comfort food, but only serving breakfast and lunch, as it used to do.

The 2015 winter season may be an enchilada of a different color, however. The new tax structure will have an impact on legitimate, licensed small businesses— especially restaurants– and, ultimately on the end user of the services. Foreigners operating small businesses in Mexico will have to be particularly careful to mind their “p’s and q’s” or risk possible closure and/or jail sentences.

The reason restaurants will be particularly hard hit is because until this year they did not pay an eleven percent tax on every order. Instead, they paid a flat rate depending on the size of their business and the number of employees. Therefore, this tax won’t be a simple increase of five percent for them. Instead it is a full sixteen percent increase on each order and each transaction. While the Roadrunner could just add this cost on to each of their menu items (indeed, some restaurants downtown already are doing this), there is some concern among some small business owners that passing off the additional costs to the consumer will only serve to drive down business.  For example, a $6.00 omelet might now cost around $7.00 or $8.00; a $20 haircut might now be in the neighborhood of $23 or $24. Expat retirees on fixed budgets might just think twice about spending their limited income on a breakfast out.  Or, they might just start shopping around for someone who cuts hair for almost free out of their home, rather than frequent the established hair salons.

In addition to consumers feeling the added pinch to their pockets, restaurant owners and small business establishments will have to demonstrate that the sixteen percent is actually being collected on each and every item. They will be held accountable for creating a documented paper trail for every transaction. This will require the added time of a bookkeeper–an added expense that many small businesses may not be prepared for.

This is not the first time the Mexican government has attempted to implement tax reform.  We have heard from locals that many of the previous tax reforms went by the wayside after trial periods when it became apparent that the tax created an undue hardship on businesses and proved far too difficult to implement. The small business owners we spoke to were clearly hoping this might come to pass with regard to this particular tax reform measure.

A study by Colegio de la Frontera Norte, a federally funded think tank based in Tijuana that studies issues on Mexico’s northern border, concludes that the sales-tax hike will harm Baja California’s economy. The revamp will lead to price increases “and reduce the quantities that residents of Baja California consume,” the report said.

This is a very big change in the way business has been conducted here on the Baja. It also applies a tax to food (albeit prepared and cooked for you) that has not been applied in the past.

As can be expected, some businesses—licensed, as well as the unlicensed–will attempt to circumvent the tax with under-the-table and black market style transactions. This would be sheer suicide, however, for any foreign business owner.

The next few months will decide the ultimate outcome and impact of this new tax on our area. I guess it’s up to each of us to decide whether we feel this tax is a good or a bad thing. But, at least we can count on one thing–barring no unforeseen dilemmas–the Roadrunner will continue to be a landmark and a gathering place for all of us in San Felipe at least through 2014!

Note: If you wish more detailed information regarding this new EVA tax reform, please visit our Mexican News page.

dif.cardDIF & INAPAM Card=50% Discount on Property Taxes

Short Answer:  Well, yes…but, it kinda depends.

Long Answer:  For those of you not conversant in DIF and INAPAM Card speak, it goes something like this:

If you are over 60 years of age and are a Mexican citizen or have a Mexican permanent or temporary status card (FM2 or FM3), you may be eligible for the DIF and INAPAM programs in Mexico. DIF stands for El Sistema Nacional para el Desarrollo Integral de la Familia  (National System for the Development of the Whole Family.) INAPAM stands for Instituto Nacional de Las Personas Adultas Mayores (National Institute for Elderly Adults). The DIF and INAPAM programs were set up to assist poor families and vulnerable people of Mexico–with an emphasis on the elderly, the poor, single moms, children, and persons with disabilities. For Americans, just think of it as a giant, government run, almost all inclusive food stamp, WIC, senior center program with voluntary private business buy in. Possession of these cards entitles the bearer to discounts on hundreds of National, State, and private business services and goods:  from transportation to food to medical services to entertainment and much more. Discounts range from five to fifty percent off of goods and services.  Both cards require essentially the same paperwork. Both require that you are able to provide:

1. The original and two photocopies of your FM3 or FM2 or permanent or temporary card.

2. Your passport and two copies of the photo and signature page of it.

3.  Four small photos of yourself, either in black and white or color.  You must be facing forward.

4.  Your blood type.

5. Proof of residence. It must be a utility bill with your address on it.

With tax season upon us, there has been some speculation as to whether or not the DIF and INAPAM cards entitle one to a 50% discount on property taxes and water bills. It is the conclusion of this researcher that some municipalities in Mexico do, indeed, offer this benefit. However, it appears that to qualify for this benefit you must hold the fidecomiso on your property.  Most of EDR residents hold it in conjunction with the Bank.  Thus, we are ineligible.

However, given that taxes are so reasonable here, compared with what some of us have to pay on our property in the United States, perhaps we should consider ourselves fortunate. And, if you pay your taxes now –between January 1 and January 30 — you are entitled to receive an additional twenty percent off! You’ll be hard pressed to find such a deal anywhere.  So, the long and the short of it is, if you possess the DIF and INAPAM cards, you may not qualify for a discount on your property taxes, but you will have the good fortune of saving on hundreds of other discounted items.  To find out more about the discounts (because they vary from State to State) check out the INAPAM web site:

http://www.inapam.gob.mx/es/INAPAM/

In short, Mexico offers us many different “silver linings” that we might not be blessed to find anywhere else.

PS Don’t forget to pay your property taxes this month.

 

EDR New Pool. Closed.DSC00039

Short Answer: Well,kinda, sorta. Who knows?

Long Answer:  If you drive by or go to the new pool facility, one of the things that might strike you as a little odd—since it is a brand new facility— is that while the Jacuzzi and the water volley ball pools are available for use all day long, the large, “lap-swimming” pool seems to  be mostly covered and closed.  This has prompted some people to wonder if it has been closed permanently, or, what exactly is going on.  A discussion with various sources seemingly in “in-the-know” about pool stuff, revealed that the large pool appears to be just too expensive to heat. So, EDR management decided to limit its use.  It is now open from 9 a.m. until 11 a.m. for lap swimmers.

A survey taken by the Ranch in 2010 indicated that one of the top community services that the HOA should offer residents was lap swimming (It was rated top 7 item to be included in a community center.).  So, this reporter decided to find out what do the lap swimmers have to say about this new mandate on the large, lap-swimming pool?  Opinion was overwhelmingly not so good.  For starters many of them have years built around swimming laps earlier in the morning (generally at 7:30 a.m.).  This regime allows them to get their exercise program in early and frees them up to do other chores and activities during the rest of the day.  Then, there is the issue of heat and sun.  As our days get longer, more and more people will be coming down to the pool earlier and earlier.  This creates a conflict with the lap swimmers.  Many visitors (and, some residents) do not “get,” or, understand lap swimming.  Out of ignorance, they can be quite discourteous in their use of the pool, making it impossible for the lap swimmers to enjoy, or, even make it through their workout programs. And, the later in the day a swimmer goes to the pool, the warmer the pool can be.  Warm temperatures are nice, but, there is a point when lap swimming in hot water is sheer hell.

But, the real question on most lap swimmer’s minds is, if the HOA knew they wouldn’t be able to heat the large, lap- swimming pool, why on earth did they spend money to build it in the first place?  And, if, on the other hand,  they weren’t aware of the cost of heating, why weren’t they aware?  So, in the end, the large pool begins to take on the image just another “luxury façade.”   Something to open up for photo-ops and major holidays when there is an influx of potential property buyers.

Sorry, lap swimmers, but, without any true representation on the EDR HOA anymore, you can’t even bitch to your neighborhood rep!

Note:  Since writing this piece, we have found out that the new reason for the large pool limiting its hours is that the heater is broken.   Apparently parts have been ordered and the pool may be reopened this coming Wednesday.  As usual, fantasy and reality share a thin line. It’s anyone’s guess as to how things turn out in the end for the large pool and its loyal band of lap-swimmers.

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Posted on January 12, 2014, in News, Observations and tagged , , , , , , , , , , , , , . Bookmark the permalink. Comments Off on North Beach Community Week in Review, or…What’s been in the Rumor Mill this Time?.

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