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CITY OF SEWARD, ALASKA
RESOLUTION 2010 -120
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, ADOPTING AN ALTERNATIVE ALLOCATION METHOD
FOR THE FY2011 SHARED FISHERIES BUSINESS TAX PROGRAM,
AND CERTIFYING THAT THIS ALLOCATION METHOD FAIRLY
REPRESENTS THE DISTRIBUTION OF SIGNIFICANT EFFECTS OF
FISHERIES BUSINESS ACTIVITY IN THE COOK INLET FISHERIES
MANAGEMENT AREA
WHEREAS, the State of Alaska requires that for a municipality to participate in the
FY2011 Shared Fisheries Business Tax Program ( "Program "), the municipality must demonstrate
to the Department of Commerce, Community and Economic Development that the municipality
experienced significant effects during calendar year 2009 from fisheries business activities; and
WHEREAS, the Program provides for the allocation of available program funding to
eligible municipalities located within fisheries management areas specified by the Department of
Commerce, Community, and Economic Development; and
WHEREAS, the Program provides for the use, at the discretion of the Department of
Commerce, Community, and Economic Development, of alternative allocation methods which
may be used within fisheries management areas if all eligible municipalities within the area agree
to use this method, and the method incorporates some measure of the relative significant effect of
fisheries business activity on the respective municipalities in the area; and
WHEREAS, the City Council of the City of Seward, Alaska proposes to use an
alternative allocation method for allocating the approximately $69,514.16 in FY2011 funding
available within the Cook Inlet Fisheries Management Area, in agreement with all other
municipalities in the area participating in the FY2011 Shared Fisheries Business Tax Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD, ALASKA, that:
Section 1. By this resolution the Council certifies that the City of Seward did experience
significant effects during calendar year 2009 from fisheries business activities that occurred
within the Cook Inlet fisheries management area, and seeks to apply for funding under the
FY2011 Shared Fisheries Business Tax Program.
Section 2. All eligible communities in the Cook Inlet fisheries management area will
receive fifty percent (50 %) divided equally and fifty percent (50 %) divided on a per capita basis.
CITY OF SEWARD
RESOLUTION 2010 -120
Section 3. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this
13th day of December, 2010.
THE CITY OF SEWARD, ALASKA
.4 .. II ;
illard E. 1 n ham, Mayor
AYES: Valdatta, Bardarson, Keil, Shafer, Dunham
NOES: None
ABSENT: Smith, Casagranda
ABSTAIN: None
ATTEST:
J: :n Lewis, C
C ty Clerk
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COUNCIL AGENDA STATEMENT
Meeting Date: December 13, 2010 t .tom SE%
Through: Phillip Oates, City Manager; —
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From: Kristin Erchinger, Finance Director 4
Agenda Item: 2011 Shared Fisheries Business Tax Program
BACKGROUND & JUSTIFICATION:
The City of Seward is required to apply to the State of Alaska Department of Community and Economic
Development (DCED) each year, to qualify for funding under the State's Shared Fisheries Business Tax
Program. The purpose of the program is to provide for a sharing of state fish tax collected outside
municipal boundaries, with municipalities that have been affected by fishing industry activities.
This is the 18th year of this program, and municipalities across the state will share tax revenues from
2009 fisheries activity as reported by fish processors on their fish tax returns. The law that created this
program requires that funding be allocated first to fisheries management areas across the state based on
the level of fish processed in each area, compared to the total fish processed for the whole state. Then,
funding is allocated among the municipalities located within each fisheries management area, based on
the relative level of impacts experienced by each municipality.
Seward is located in the Cook Inlet Fisheries Management Area, which includes Anchorage, Homer,
Kenai, Kenai Peninsula Borough, Kachemak, Seldovia, Soldotna, and Seward. The State's FY2011
program allocation to be shared within this area is approximately $69,514, up $11,568 from the prior
year.
In fisheries management areas where the program allocation is greater than $4,000 multiplied by the
number of municipalities in the area, program regulations provide for a "long- form" application. In the
Cook Inlet Fisheries Management Area, the threshold value is $32,000 (8 municipalities x $4,000). The
final deadline for submitting application for the FY2011 Shared Fisheries Business Tax Program is
December 15, 2010.
The long -form application provides for a "standard" and an "alternative" method of funding allocation.
The City of Seward will file under the alternative method.
Standard Method: Under this method, each municipality must determine and document the cost of
fisheries business impacts experienced by the community in 2009. Once the impacts have been
established for each of the municipalities, the DCED will calculate the allocation for each municipality
using the following formula:
One -half of the available funding is divided among participating municipalities on the
basis of the relative dollar amount of impact in each community. The other half of the
available funding is divided among municipalities based on the relative dollar amount of
impact per capita in each community.
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COUNCIL AGENDA STATEMENT
FY2011 Shared Fisheries Business Tax Program
Page Two
Alternative Method: Alternative allocation methods may be proposed by the municipalities within the
area. DCED will consider approving the use of a proposed alternative method only if all the
municipalities in the area agree to use the method, and if the method includes some measure of the
relative effects of the fishing industry on the respective municipalities in the area.
The short-form method allocates the available funds by sharing 50% of the funds equally among the
participating municipalities, and allocating the remaining 50% on a per- capita basis. The amount
allocated this year is more than in previous years, and would require filing the long -form application,
since the funding allocation does meet the established threshold. The information required by the long -
form application would be difficult and time - consuming to obtain. Therefore, it is proposed that
municipalities in our area use the alternative method and that we further agree that the allocation method
be the same method used in the short form allocation. Given the small amount of additional funding that
the City might gain by utilizing the standard method, compared to the additional time required to
complete the application, it is our recommendation that the city of Seward agree to use the alternative
method and agree that 50% of the funds will be allocated equally among the participating municipalities,
and the remaining 50% allocated on a per- capita basis. This will be the eleventh consecutive year of
using this method.
CONSISTENCY CHECKLIST:
Where applicable, this agenda statement is consistent with the Seward City Code, Charter,
Comprehensive Plans, Land Use Plans, Strategic Plan, and City Council Rules of Procedures.
FISCAL NOTE:
Using this same allocation method, Seward expects to receive approximately $5,000 in 2011.
Approved by Finance Department: ✓ ..f t+ 444`ld -+
RECOMMENDATION:
Council approve Resolution 2010- 120adopting an alternative method for the FY2011 Shared Fisheries
Business Tax Program, and certifying that this allocation method fairly represents the distribution of
significant effects of fisheries business activity in the Cook Inlet Fisheries Management Area and
authorize the city manager to apply for funds from the Shared Fisheries Business Tax Program.
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