HomeMy WebLinkAbout06242013 City Council Laydowns -oGO NJ
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Sponsored by: Murphy
4 CITY OF SEWARD, ALASKA
RESOLUTION NO. 95-028
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, PROVIDING FOR THE SUBMISSION TO
THE QUALIFIED VOTERS OF THE CITY OF SEWARD THE QUESTION
OF ENACTING AN INITIATIVE ORDINANCE PROVIDING FOR A
FOUR PERCENT HOTEL/MOTEL ROOM TAX AT THE REGULAR ELECTION
IN AND FOR THE CITY OF SEWARD ON OCTOBER 3, 1995
WHEREAS, the City Clerk has certified a petition calling for an election to enact an
ordinance providing for a four percent hotel/motel room tax; and
WHEREAS, Section 4.6 of the Charter of the City of Seward provides that a City Code
provision may be initiated in the manner and subject to the limitations as set forth by law or in
the City Code; and
WHEREAS, Seward City Code § 4.15.045 B provides that unless the City Council enacts
0 substantially the same measure within 30 days of submission of the certified petition, the City
Clerk and the City Attorney shall prepare an ordinance or resolution to implement the petition
and shall submit it to the voters at the next regular election; and
WHEREAS, on April 11, 1994, the City Council repealed a similar hotel/motel room tax
following the certification of a referendum petition on the matter and is, therefore, prohibited
from enacting a hotel/motel room tax as set forth in the petition within the time frame provided;
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA, that:
Section 1. The City Clerk and the City Attorney are hereby instructed to prepare an
ordinance to implement the proposed hotel/motel room tax and to submit to the qualified voters
of the City of Seward at the October 3, 1995, regular city election a proposition substantially in
the following form:
PROPOSITION NO.
HOTEL/MOTEL ROOM TAX
Shall Initiative Ordinance No. 95- of the City of Seward,
IDproviding for a four percent hotel/motel room tax, be approved?
CITY OF SEWARD, ALASKA
RESOLUTION NO. 95-028
Section 2. This resolution shall take effect immediately upon its adoption. The initiative
ordinance shall become effective following certification of the October 3, 1995, regular city
election if approved by a majority of the qualified voters voting on the question at that election.
PASSED AND APPROVED by the City Council of the city of Seward, Alaska, this 10th
day of April, 1995.
THE CITY OF SEWARD, ALASKA
Dave W. Crane, Mayor
AYES: Anderson, Crane, Darling, Deeter, King, O'Brien, Sieminski
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
Cid a SMurphy, MC AE
City Clerk
(City Seal)
4110
City of Seward,Alaska City Council Minutes
October 9, 1995 Volume 31,Page 233
views versus the legal definition of"family" in the City Code. He objected to the broad definition
proposed as an amendment to the City Code . He urged the Council to do what was right to protect
the"American Family." He noted that it was an honor to have served on the Planning Commission
and Historic Preservation Commission.
BEVERLY DUNHAM, 600 Alder Street, commended the city for its response to the recent
flood and voiced her appreciation of the city employees and volunteers. She thanked the Council
for re-hiring Garzini as city manager. She commended Garzini for his efforts related to the flood.
She stated that she was offended by certain public members who complained about the city all the
time but did not live in the city limits.
LOUIE MARCH, Mile 5.5 Seward Highway, cited attorney costs related to the Krasnansky
and Jones litigation. He requested that the costs be paid personally by certain Councilmembers.
APPROVAL OF AGENDA AND CONSENT AGENDA
MOTION (Darling/Sieminski) Approve the Agenda and Consent Agenda.
Anderson moved Resolution No. 95-123,No. 95-124 and No. 95-125 to the regular meeting
agenda.
Garzini requested postponement of the replat of Lots 3, 4 and 8, Block 1, Marina Subdivision
to the October 23 meeting.
Crane moved Certification of the October 3, 1995, regular municipal election as Item A.
Under Special Orders and renumbered the respective items.
VOTE ON APPROVAL OF AGENDA AND CONSENT AGENDA AS AMENDED
Motion Passed. Unanimous
The Deputy Clerk read the following approved consent agenda items:
The September 20, 1995, special meeting minutes and the September 25, 1995, regular
meeting minutes were approved as written.
BOROUGH ASSEMBLY REPORT
Kenai Peninsula Borough Assembly Member Mike Wiley was not present.
SPECIAL ORDERS AND PUBLIC HEARINGS
Certification of October 3, 1995, regular election.
City of Seward,Alaska City Council Minutes
October 9, 1995 Volume 31,Page 234
Jones reported that a total of 660 votes, including four questioned ballots, had been cast at
the polls and 95 absentee ballots were returned in time for the canvass for a total of 755 votes cast
in the October 3, 1995 election. She noted that the Canvass Board had met on October 6, 1995, to
Canvass the absentee and questioned ballots and had elected to count 93 absentee ballots and one
questioned ballot. She read the following final results of the election into the record as follows:
Mayor (2-Year Term)
CLARK, Stu 202
DARLING, Hugh W. 100
BENCARDINO, Louis A. 408
Write In 15
City Council (3 to be elected)
O'BRIEN, Patrick D. 206
ANDERSON, Margaret 402
KEIL, Marianna C. 304
KRASNANSKY, James A. 105
CRANE, Dave W. 500
WILEY, Arlene 241
MARQUISS, Steve 99
TAYLOR, J. Michael 35
NOLL, Jayne A. 170
Write In 5
PROPOSITION 1 (3-Year Terms)
Yes 303
No 364
PROPOSITION 2 (Designated Seats)
Yes 253
No 429
ts4 PROPOSITION 3 (4% Bed Tax)
Yes 456
No 268
TOTAL VOTES CAST: 755
TOTAL VOTES COUNTED: 750
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Sponsored by: Keil and King
CITY OF SEWARD,ALASKA
RESOLUTION NO. 97-052
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, DECLARING COUNCIL INTENT WITH RESPECT TO THE
PROCEEDS OF THE HOTEL/MOTEL ROOM TAX
WHEREAS,Initiative Ordinance No. 95-1 established a four percent(4%)hotel/motel room
tax on a city-wide basis;and
WHEREAS, the City Council supports the development and promotion of tourism as a
major industry in Seward; and
WHEREAS, the City Council's basic intent through Initiative Ordinance No. 95-1 is to
provide for the promotion of tourism and development of visitor infrastructure and to provide for
IP visitor services;
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD,ALASKA,that:
Section 1. The City Council recognizes that the hotel/motel room tax is paid by visitors to
Seward and is an appropriate source of revenue to promote tourism, thereby supporting the tourism
industry and its contributions to the local economy.
Section 2% The City Council further recognizes that the Seward Chamber of Commerce,
Convention and Visitors Bureau is the primary agency in Seward that markets and promotes the
local community and region.
Section 3. It is the intent of the City Council to allocate a percentage of the Fiscal Year 1998
bed tax revenues to the Seward Chamber of Commerce,Convention and Visitors Bureau specifically
for tourism marketing.
Section 4, It is the intent of the City Council to allocate a percentage of the Fiscal Year 1998
bed tax revenue for the development of tourism infrastructure and visitor services, including the
establishment of a convention/conference center in Seward.
Section 5. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the city of Seward,Alaska, this 14th
day of April, 1997.
CITY OF SEWARD,ALASKA
RESOLUTION NO. 97-052
THE CITY OF SEWARD,ALASKA
41110
1/1. 41111 1411
ouis A :encardino, Mayor
AYES: Anderson, Bencardino, Blatchford, Clark, Keil, King
NOES: Crane
ABSENT: None
ABSTAIN: None
ATTEST:
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City of Seward, Alaska City Council Minutes
April 14, 1997 Volume 33, Page 43
RECESS: The meeting was recessed at 9:25 p.m. and reconvened at 9:35 p.m.
Resolution No. 97-050, amending the Harbor Enterprise Fund Legal budget.
MOTION (King/Crane) Approve Resolution No. 97-050.
Anderson stated that she did not approve of the City's decision to go forward with a sale
of the property and lease of tidelands to Schafer and felt that the City should negotiate out of the
Seward Forest Products lease and then RFP the site. She stated that, for this reason, she could
not support this resolution. Garzini pointed out that the Council had instructed the City Manager
and the City Attorney to negotiate the agreements with Seward Forest Products and Afognak
Logging, and this resolution amended the budget to pay the attorney for work already performed
at the request of a majority of Council.
VOTE ON MOTION TO APPROVE THE RESOLUTION.
Motion Passed. YES: Bencardino, Blatchford, Clark,
Crane, Keil, King
NO: Anderson
6 YES, 1 NO
Resolution No. 97-052, declaring Council intent with respect to use of the
proceeds of the hotel/motel room tax.
Motion (Keil/King) Approve Resolution No. 97-052.
Clark stated that, by his calculations, the visitor industry contributed over $600,000 in
sales tax revenues alone to the City each year and, given this significant economic impact, it was
appropriate to dedicate a portion of the bed tax revenues to enhancing and promoting the tourist
industry. King stated that the sponsors of the initiative ordinance which established the bed tax
had presented the new tax as potential revenue for a visitor center and to fund tourism promotion.
Crane objected to the resolution stating that the Council could give direction to the administration
without taking such formal action. He added that this discussion should take place during
discussion of the budget as a whole.
MOTION (Keil/Bencardino) Amend Sections 2 and 3 of the resolution
by striking out "fifty percent of the" and
"the remaining fifty percent of the" respec-
tively and inserting "a percentage of the
Fiscal Year 1998" in each of the two sec-
tions.
Motion Passed. YES: Anderson, Bencardino, Blatchford,
Clark, Keil, King
City of Seward, Alaska City Council Minutes
April 14, 1997 Volume 33, Page 44
NO: Crane
6 YES, 1 NO
VOTE ON MOTION TO APPROVE THE RESOLUTION AS AMENDED
Motion Passed. YES: Anderson, Bencardino, Blatchford,
Clark, Keil, King
NO: Crane
6 YES, 1 NO
Status Review -- Historic Preservation Commission. The Council instructed Murphy
to advertise the four existing vacancies on the Commission and stated that if a sufficient number
of applications were received to fill all four seats, the Commission would be allowed to continue
for one year and would be re-evaluated at that time.
COUNCIL COMMENTS
BLATCHFORD asked Garzini to give a report at the next meeting on City noise
abatement policies and procedures. He congratulated Rocky Goodwill on his 20 years of service
with the City and congratulated Lacey Keil on her selection to appear on an upcoming
Nickelodeon game show.
KF.Iiasked for a report on the size of the City's commitment to the proposed convention
center. She welcomed Hughes to town.
CRANE congratulated Goodwill on his 20 year anniversary as a city employee.
CLARK stated that he had received a 20-minute video tape of the recent Alaska
Conference of Mayors press conference in Juneau and offered to share it with anyone interested.
He stated that he was pleased to see unanimous consent among the Council to continue the
Historic Preservation Commission for another year.
KINGreported on actions of the Planning Commission at its last meeting. He thanked the
Council for its support of Resolution No. 97-052.
CLARK reported that the Alaska Railroad had scheduled an April 18 prebid conference
for construction of the new depot. He added that the Railroad intended to pave a road east of the
tracks to the Railroad Dock at the same time it was completing any paving associated with the new
depot building.
ANDERSON congratulated Goodwill. She thanked Skibeness for reading the two
proclamations naming Pat Williams and Lee McAnerney as recipients of the 1997 Historic
Preservation Awards. She asked if a building permit was required for renovating the railcars in
the harbor. Engineering and Utilities Manager Calvert stated that the owner of the railcars had
Susanne Rieder RECEIVED
Moby Dick Hostel JUN 2 4 2013
P.O. Box 624 VrriC;4- Uf 1 FSE
Seward, AK 99664 CITY CLERK
June 24, 2013
Dear Mayor Seaward and Members of City Council,
I am opposed to the Seward City Code Chapter 5.45 Hotel/Motel Room Tax (bed tax) in its current
form.
My main problem with the bed tax is the unfair selection of businesses which have to charge the tax.
Only in-city lodging businesses have to collect the tax. In comparison to the others in the wider area,
they also have to charge an extra 4%city sales tax. Technically they do not have to pay the tax, but
they have to collect it, which makes the cost of lodging more expensive.To the guests it does not
make any difference whether s/he pays for lodging or taxes. It all adds up into their cost of an
overnight stay, especially if they would like to stay a number of nights.
It seems to me that either all lodging businesses in the wider Seward area should be forced to collect
the bed tax or no one. If it stays how it currently is, I would like to see "out-of-town" Chamber
members pay a higher membership fee to offset the effort and disadvantage of collecting the bed tax
and/or have free memberships for businesses who have to collect the tax. As now, if a tax-collecting
lodging business decides not to be a member of the local Chamber of Commerce, they still have to
collect the tax (which increases their rate) and has no benefit.
The bed tax seems to be the major funding tool of the Seward Chamber of Commerce, which has been
able to spend their 50% part of the collected tax easily and now depends on it.The in-town lodging
businesses are collecting the fees for supporting every business who is a Seward Chamber member.
Possibly, instead of the bed tax, we should add a 1%tourist tax on every lodging,fishing,tour and
restaurant charge.
Also, I would like to add, that currently all other cities in Alaska (including Anchorage) exempt hostels
from collecting bed taxes.
Thank you for your consideration.
Sincerely,
\rlAA/CLIAIVUZ- l2LIL(2j62-1
Susanne Rieder
REC FVED
From Marilee Koszewski, Seward Small Business Owner JUN 2 4 2013
Ballaine House B&B located at 437 Third Ave.
01-ILIC.,- BJP- f HE
CITY CI,. RK
In regards to reviewing Seward's Bed tax, I think it needs to be used as it was originally designated, "to
offset the impacts on city services caused by visitors to the community" and not just put into the general
fund. I have no problem with Seward's Chamber of Commerce getting some funding but I think there
should be a review of how it is being spent and the amount really needed.
From the laydown for Bed Tax Reinvestment in Destination Marketing in Alaskan Communities
While Seward is 4% bed tax plus 7% sales tax for a total of 11% collected from visitors, Valdez only has a
bed tax of 6% -there is no sales tax at all - no tax on food or fuel or other energy tax. Valdez also is
blessed with the pipeline which generates a huge tax windfall.
Valdez's Chamber is getting double the money Seward's chamber of commerce gets but Valdez is also a
harder sell to visitors because of the distance, 5 plus hours from Anchorage (Seward is half of that) so
they need to invest more in getting visitors there. Also Valdez has two major tourist seasons, Summer
and winter to advertise. Valdez has commercial air service to Anchorage and the Alaska Marine highway.
Homer is in competition with Seward, but with it also being 5 hours from Anchorage by vehicle, Homer is
a harder sell. Having a commercial airline does help but not significantly. Ferry service is also in Homer.
In 18 years of business I've noticed that if a visitor had limited time (1 week or less) they would select
Seward and Denali to visit over Homer and Valdez.
Interesting enough HOMER was NOT included on the laydown information sheet.
HERE is the information on HOMER from the city clerk
Homer has a 4.5%sales tax within the city limits. Homer has NO Bed tax. Homer's chamber is funded
by the city at a cost of$40,000.00
As Homer's city clerk said, they do a lot for very little money.
In another vein:
Something needs to be done about the cruise ship tax money also. Cruise ships impact our town—they
often go to the sea life center on a tour or take a Fjord Cruise. Funds from that tax collection should be
used to improve bus stops for the shuttle service, install sidewalks and improve downtown identification
and promotion, help the Sea life center and improve the small boat harbor.
Thank you
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IiCEIVED\ Nicola Murawsky T f z�`�
JUN 2 4 2.013 P.O. Box 2224
Ut-Hue OF THE Seward, Alaska 99664
CITY CLERK
24 June 2013
Dear Mayor Seaward and Members of City Council,
This letter is written in total support of Seward City Code Chapter 5.45, the Hotel/Motel Room Tax, AKA
"bed tax". This ordinance was placed before the voters at the regular election in October 1995 and was
approved by a majority vote. It was implemented on 1 January 1996. This ordinance is in line with the
City's Strategic and Comprehensive Plans of expanding its business base and to generate year-round
employment.The Port and Commerce Advisory Board passed resolution 2004-47 recognizing the
Chamber as the lead marketing entity for the Seward community, thereby supporting the use of the bed
tax for promoting Seward.
In 1996 the bed tax revenue collected was$53,461 and has risen to the current (as of 2011) level of
$340,000. These monies are collected from visitors. This is not a burden on the residents of Seward,yet
all residents and business owners benefit from it. Half of funds collected are shared with the Seward
Chamber of Commerce for the express purpose of providing marketing services on behalf of the
community. There is no other source of funding for this purpose.
What is not to like about the room tax?
There should be no discussion of repealing the room tax. If anything, there should be discussion about
increasing the percentage and allowing businesses out of City limits to collect it as well. After all, it
benefits everyone.
Thank you for your time and consideration.
Sincerely,
l
Bed Tax Reinvestment in Destination Marketing j fd N�; ,l N)
In Alaskan Communities �/ vU
(Dated: November 2012) (p /7J4
Community Bed Tax Approx. Total 2012 Bed Tax Reinvestment p wx. CA"cvvv,,62.✓
_Collected
Anchorage 12% $22 million 1/3 Visit Anchorage
(projected for 1/3 Convention center bond repayment
2012) 1/3 Municipality of Anchorage
Note:The Municipality of Anchorage pays an amount not to exceed
$1 .6 million for convention center operational deficits although this
amount is not dedicated and is not necessarily tied to the MOA's one-
third of the bed tax.
Note:Three governments reinvest bed tax dollars through Fairbanks
Convention & Visitors Bureau (FCVB) as follows:
Fairbanks City 8% $2.5 million 22.5% City of Fairbanks
$400,000 distributed as follows: Fairbanks Economic Development
Corporation ($100,000); Golden Heart Plaza/Barnette Landing
Maintenance ($30,000); Discretionary Grants ($270,000)
Remaining to FCVB (actual range of 59% to 63% with an 8-year
average of 61%)
Borough 8% $1 .6 million 65% of projected bed tax to FCVB (actual range of 55% to 64% with a
7-year average of 62%)
Remaining to Fairbanks North Star Borough
North Pole 8% $84,000 15% City of North Pole
85% distributed as follows: NP Economic Development Corporation
(50%); NP Community Chamber of Commerce Visitor Info Center
(30%); NP Christmas in Ice (15%); FCVB (5%)
Total $4.2 million
JUN 242013
U�-t-�l:t u- .1 HE
CITY CLERK
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Juneau* 7% $1 .1 million 100% Juneau Convention & Visitors Bureau and Centennial Hall
Note: City of
Juneau 5% General fund of the City of Juneau
= 12%
Ketchikan City 7% General fund. Ketchikan Convention & Visitors Bureau (KCVB)
receiving monies from economic development budget and from
enterprise fund within the ports and harbors department
Borough 4% General fund. As recipients of state cruise passenger taxes, allocates
funds to KCVB from that budget for "visitor services provided to
cruise passengers" and small grants from economic development
funds.
Mat-Su* 5% $1.1 million 35% Mat-Su Borough dedicated to tourism infrastructure projects
65% Mat-Su Convention & Visitors Bureau
*Note:
Wasilla 4% Note: Additional 4% sales tax for the respective general funds of
and sales the cities of Wasilla and Palmer
Palmer tax
= 9%
Nome 6% $141,000 Note:While bed tax is not specifically earmarked for visitor center
5% (projected for (VC) operations, VC Budget (including contract to the Chamber,
sales FY 2013) Utilities, Maintenance) is $152K which is 100% of Bed Tax
tax = revenue goes to the VC budget plus a balance from the General
11% Fund.
Seward 4% $340,000 50% City of Seward
50% Seward Chamber of Commerce/marketing
Valdez 6% $365,000 100% to Valdez Convention & Visitors Bureau
co(2/13
DotION)
Qualifications (50%) North Star Harmon
No. Question Score Score
How well has the proposer demonstrated experience in completing
1 similar projects and cold weather climate projects?
Has the proposer provided examples of design/build construction
2 experience resulting in timely completion and within budget?
Has the proposer demonstrated experience working cooperatively with
project teams to incorporate specific needs and concerns of the owner
3 into its work?
Has the proposer identified primary individuals such as principal decision
makers, project managers, engineers and field superintendent(s) of the
4 prime contractor and all subcontractors?
Has the proposer established roles and responsibilities that demonstrate
an integrated and complete team of experienced people capable of
5 performing the work in a timely manner for the price proposed?
Do the primary individuals assigned to the project have experience on
6 similar projects?
would be desirable for individuals engaged in the work that this project
7 requires?
49.91 50
Schedule (15%) North Star Harmon
No. Question Score Score
The proposal shall include a time line or bar chart schedule for
completion of the entire project, including design, procurement and
1 construction. Complete? Adequate? 14 15
List of Deliverables (5%) North Star Harmon
No. Question Score Score
A. The proposal shall include a list of deliverables for all drawings,
calculations, and documents that will be produced during the design and
construction process. Complete? 5 3.17
Proposal Price (30%)
Price Evaluation (See Eval Criteria for Procedure) Score Score
Harmon Price=493,190 30
North Star Price=930,000=(493,190 x 30)/930,000 15.91
Total Score 84.82 98.17
CITY OF SEWARD,ALASKA
Report to the City Council
Year Ended December 31, 2012
Mikunda,
Cottrell&Co.,lttc.
Certified Public Account nts&Consultants
An Independently Owned&limb&
Mi undaMCGLADREY ALLIANCE = McGladrey
Cottrell & Co.,Inc.
Certified Public Accountants&Consultants
June 12, 2013
Honorable Mayor and City Council
City of Seward
Seward,Alaska
Honorable Mayor and City Council:
We are pleased to present this report related to our audit of the financial statements of City of
Seward for the year ended December 31, 2012. This report summarizes certain matters required
by professional standards to be communicated to you in your oversight responsibility for City of
Seward's financial reporting process.
This report is intended solely for the information and use of the City Council and management
and is not intended to be and should not be used by anyone other than these specified parties. It
will be our pleasure to respond to any questions you have about this report. We appreciate the
opportunity to continue to be of service to City of Seward.
doze€
Mikunda, Cottrell&Co.
Anchorage, Alaska
3601 "C" Street, Suite 600 * Anchorage, Alaska 99503 * (907) 278-8878 * Fax (907) 278-5779 * www.mcc-cpa.com
Contents
Required Communications 1-2
Summary of Significant Accounting Estimates 3
Schedule of Recorded Audit Adjustments 4-6
Exhibit A- Significant Written Communications between Management and
Our Firm 7
Representation Letter
•
Required Communications
Generally accepted auditing standards (AU-C 260, The Auditor's Communication with Those
Charged with Governance) require the auditor to promote effective two-way communication
between the auditor and those charged with governance. Consistent with this requirement, the
following summarizes our responsibilities regarding the financial statement audit as well as
observations arising from our audit that are significant and relevant to your responsibility to oversee
the financial reporting process.
Our Responsibilities with regard to the Financial Statement Audit
Our responsibilities under auditing standards generally accepted in the United States of America
have been described to you in our arrangement letter dated February 3, 2013.
Accounting Policies and Practices
Preferability of Accounting Policies and Practices
Under generally accepted principles, in certain circumstances, management may select among
alternative accounting practices.
Adoption of, or Change in, Accounting Policies
Management has the ultimate responsibility for the appropriateness of the accounting policies used
by the City. The City adopted the provisions of two new GASB statements (63 & 65) for 2012. The
provisions of these statements resulted in the presentation of a new Statement of Net Position to
replace the former Statement of Net Assets for the Enterprise Fund and the Government-Wide
financial statements. This reformatting creates new account types, called deferred outflows and
deferred inflows, and results in the change from net assets to net position.
Significant or Unusual Transactions
We did not identify any significant or unusual transactions or significant accounting policies in
controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Management's Judgments and Accounting Estimates
Summary information about the process used by management in formulating particularly sensitive
accounting estimates and about our conclusions regarding the reasonableness of those estimates is
in the attached "Summary of Accounting Estimates."
Basis of Accounting
The financial statements were prepared on assumption that the entity will continue as a going
concern.
Page 1
Required Communications, continued
Audit Adjustments
Audit adjustments proposed by us and recorded by City of Seward are show on the attached
"Schedule of Recorded Audit Adjustments."
Uncorrected Misstatements
We are not aware of any uncorrected misstatement.
Disagreements with Management
We encountered no disagreements with management over the application of significant accounting
principles, the basis for management's judgments on any significant matters, the scope of the audit,
or significant disclosures to be included in the financial statements.
Consultations with Other Accountants
We are not aware of any consultations management had with other accountants about accounting or
auditing matters.
Significant Issues Discussed with Management
No significant issues arising from the audit were discussed with or the subject of correspondence
with management.
Significant Difficulties Encountered in Performing the Audit
We did not encounter any significant difficulties in dealing with management during the audit.
Letter Communicating Significant Deficiencies
There were no material weaknesses noted during the audit; had such items been identified, they
would be reported to you in writing.
Significant Written Communications between Management and Our Firm
Copies of significant written communications between our firm and the management of the City,
including the representation letter provided to us by management, are attached as Exhibit B.
Page 2
City of Seward
Summary of Significant Accounting Estimates
Year Ended December 31, 2012
Accounting estimates are an integral part of the preparation of financial statements and are based
upon management's current judgment. The process used by management encompasses their
knowledge and experience about past and current events and certain assumptions about future
events. You may wish to monitor throughout the year the process used to determine and record
these accounting estimates.
Area Accounting Policy Estimation Process Comments
Bad debt expense To estimate the amount of Based on historical We agree with
and allowance for uncollectible accounts records and actual management's
doubtful accounts receivable at year end. review of individual estimate.
accounts at year end.
Depreciable lives of To depreciate the cost of Based on management's We concur with
capital assets capital assets over their estimates using their management's
estimated useful lives. knowledge of the policy.
specific assets, usage,
etc.
Page 3
City of Seward
Summary of Recorded Audit Adjustments
Year Ended December 31,2012
Number Date Name Account No Amount
AJE#1 12/31/2012 Inventory 501-0000-1400-0000 501 24,666.90
AJE#1 12/31/2012 Operating Supplies 501-5400-5440-0000 501 (24.666.90)
To adjust inventory. The
inventory spreadsheet did not include all the
line items in the subtotals.
AJE#2 12/31/2012 Unreserved,Undesigna 626-0000-3050-0000 626 (28,192.79)
AJE#2 12/31/2012 State Project Funds 626-6261-4680-0200 626 28,192.79
AJE#2 12/31/2012 Unreserved,Undesigna 666-0000-3050-0000 666 11,762.82
AJE#2 12/31/2012 State Project Funds 666-0000-4680-0200 666 (11,762.82)
To tie prior year net assets by
booking prior year entries that were not
booked by client.
AJE#3 12/31/2012 Unreserved,Undesigna 417-0000-3050-0000 417 121,282.00
AJE#3 12/31/2012 General Fund Transfr 417-0000-3070-0101 417 (121,282.00)
Fund 417-To adjust Transfer IN
for CIA-Local per documentation PBC.
Adjustment will offset Unreserved Fund
Balance so that ending balance of CIA-Local
is correct after YE close.
AJE#4 12/31/2012 Unreserved,Undesigna 275-0000-3050-0000 275 (255,203.79)
AJE#4 12/31/2012 State Project Funds 275-2750-4680-0200 275 255,203.79
To adjust grant for fund 275 for
excess in Exp over grant award amount that
City will cover.
AJE#5 12/31/2012 Const. in Progress 102-0000-1640-0000 102 235,092.00
AJE#5 12/31/2012 A/P Trade 102-0000-2000-0000 102 (235,092.00)
AJE#5 12/31/2012 Capital Equipment 102-1020-5930-0000 102 235,092.00
AJE#5 12/31/2012 Capital Equipment 102-1020-5930-0000 102 (235,092.00)
AJE#5 12/31/2012 Grant Receivable 315-0000-1120-0000 315 16,258.00
AJE#5 12/31/2012 A/P Trade 315-0000-2000-0000 3 1 5 (16,258.00)
AJE#5 12/31/2012 Federal Project Fund 315-3150-4680-0100 315 (13,006.40)
AJE#5 12/31/2012 State Project Funds 315-3150-4680-0200 315 (3,251.60)
AJE#5 12/31/2012 Contracted Services 315-3150-5390-0000 315 16,258.00
AJE#5 12/31/2012 Const. in Progress 401-0000-1640-0000 401 16,258.00
Page 4
City of Seward
Summary of Recorded Audit Adjustments, continued
Number Date Name Account No Amount
AJE#5 12/31/2012 CIA in Progress 401-0000-2321-0000 401 (16,258.00)
To accrue accouts payable
transactions.
AJE#6 12/31/2012 Misc.Payables 101-0000-2290-0900 101 18,000.00
AJE#6 12/31/2012 Misc. Expenses 101-1191-5790-0000 101 (18,000.00)
To eliminate the duplicate Guidian
Consulting Contract booked.
AJE#7 12/31/2012 Structures& Improv. 900-0000-1610-0110 900 47,507.21
AJE#7 12/31/2012 Structures&Improv. 900-0000-1610-0110 900 42,821.00
AJE#7 12/31/2012 Unreserved,Undesigna 900-0000-3050-0000 900 (47,507.21)
AJE#7 12/31/2012 Unreserved,Undesigna 900-0000-3050-0000 900 (42,821.00)
To book the firehall improvements
and city halll
from 2011 and 2012.
AJE#8 12/31/2012 Other Receivables 626-0000-1170-0000 626 13,635.00
AJE#8 12/31/2012 A/P Trade 626-0000-2000-0000 626 (13,635.00)
AJE#8 12/31/2012 Spec.Proj.Other Rev. 626-6260-4680-0900 626 (13,635.00)
AJE#8 12/31/2012 Capital Equipment 626-6260-5930-0000 626 13,635.00
To book the AP and expense for
Fund 626. Also, book the revenue and
receivable.
AJE#9 12/31/2012 Depreciation-General 800-8000-5650-0000 800 61,475.26
AJE#9 12/31/2012 Interest Expense 800-8000-5820-0000 800 (61,475.26)
To move capitalized interest
expense out of interest expense and into
depreciation expense. Client booked part to
interest expense and part to depreciation
expense.
AJE#10 12/31/2012 Improvements-General 401-0000-1620-0000 401 1,307,769.44
AJE#10 12/31/2012 Const. in Progress 401-0000-1640-0000 401 1,307,769.44
AJE#10 12/31/2012 Const. in Progress 401-0000-1640-0000 401 (1,307,769.44)
AJE#10 12/31/2012 Contributions in Aid 401-0000-2320-0000 401 (1,029,735.53)
AJE#10 12/31/2012 CIA in Progress 401-0000-2321-0000 401 (1,029,735.53)
AJE#10 12/31/2012 CIA in Progress 401-0000-2321-0000 401 1,029,735.53
Page 5
City of Seward
Summary of Recorded Audit Adjustments, continued
Number Date Name Account No Amount
AJE#10 12/31/2012 CIA -Local Sources 401-0000-3025-0000 401 (278,033.91)
AJE#10 12/31/2012 Unreserved,Undesigna 401-0000-3050-0000 401 (278,033.91)
AJE#10 12/31/2012 Unreserved,Undesigna 401-0000-3050-0000 401 278,033.91
To add FY 12 activity in SMC
Dolpins Project to Fixed Assets and CIA.
AJE#11 12/31/2012 Unreserved,Undesigna 800-0000-3050-0000 800 304,031.69
AJE#11 12/31/2012 Interest Expense 800-8000-5820-0000 800 (304,031.69)
AJE#11 12/31/2012 Unreserved,Undesigna 801-0000-3050-0000 801 13,037.50
AJE#11 12/31/2012 Interest Expense 801-8010-5820-0000 801 (13,037.50)
Correct Hospital and Long-term
debt interest expense
AJE#12 12/31/2012 Unreserved,Undesigna 801-0000-3050-0000 801 25,162.29
AJE#12 12/31/2012 Other Misc Revenue 801-0000-4780-0600 801 (25,162.29)
To correct fund balance in Fund
801.
AJE#13 12/31/2012 Unreserved,Undesigna 401-0000-3050-0000 401 79,214.00
AJE#13 12/31/2012 Bond Issuance Costs 401-4370-5630-0000 401 (73,285.00)
AJE#13 12/31/2012 Amort.BondlssueCosts 401-4450-5840-0000 401 (5,929.00)
AJE#13 12/31/2012 Unreserved,Undesigna 501-0000-3050-0000 501 91,539.00
AJE#13 12/31/2012 Bond Issuance Costs 501-5410-5630-0000 501 (83,114.00)
AJE#13 12/31/2012 Amort.BondlssueCosts 501-5450-5840-0000 501 (8,425.00)
Correct PBC Entry#2 &3-GASB 65
requires RESTATEMENT of write of bond
issue costs, not current year expense.
Page 6
Exhibit A — Significant Written Communications between
Management and Our Firm
Page 7
June 12,2013
Mikunda, Cottrell&Co.
3601 "C"Street, Suite 600
Anchorage, AK 99503
This representation letter is provided in connection with your audit of the basic financial statements of City
of Seward, Alaska as of and for the year ended December 31, 2012 for the purpose of expressing an
opinion on whether the financial statements are presented fairly, in all material respects in accordance
with accounting principles generally accepted in the United States.
We confirm, to the best of our knowledge and belief, as of June 12, 2013, the following representations
made to you during your audit:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter dated
February 3, 2013,for the preparation and fair presentation of the financial statements referred to
above in accordance with U.S. GAAP.
2. We acknowledge our responsibility for the design, implementation, and maintenance of internal
control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
3. We acknowledge our responsibility for the design, implementation, and maintenance of internal
control to prevent and detect fraud.
4. Significant assumptions used by us in making accounting estimates, including those measured at
fair value, are reasonable.
5. We have identified for you all organizations that are a part of this reporting entity or with which we
have a relationship, as these organizations are defined in Section 2100 of the Governmental
Accounting Standards Board's Codification of Governmental Accounting and Financial Reporting
Standards, that are:
a. Component units.
b. Other organizations for which the nature and significance of their relationship with City of
Seward are such that exclusion would cause the reporting entity's financial statements to
be misleading or incomplete.
c. Jointly governed organizations in which we participated.
6. We have identified for you all of our funds, governmental functions, and identifiable business-type
activities.
7. We have properly classified all funds and activities.
8. We have properly determined and reported the major governmental and enterprise funds based
on the required quantitative criteria.
9. We are responsible for compliance with laws and regulations applicable to the City including
adopting,approving,and amending budgets.
10. We have identified and disclosed to you all laws and regulations that have a direct and material
effect on the determination of financial statement amounts including legal and contractual
provisions for reporting specific activities in separate funds.
11. Related-party transactions, including those with component units for which City of Seward is
accountable as defined in Section 2100 of the Governmental Accounting Standards Board's
Codification of Governmental Accounting and Financial Reporting Standards, and interfund
transactions, including interfund accounts and advances receivable and payable, sale and
purchase transactions, interfund transfers, long-term loans, leasing arrangements, and
guarantees, have been recorded in accordance with the economic substance of the transaction
and appropriately accounted for and disclosed in accordance with the requirements of U.S.
GAAP.
12. All events subsequent to the date of the financial statements and for which U.S GAAP requires
adjustment or disclosure have been adjusted or disclosed.
13. The effects of all known actual or possible litigation and claims have been accounted for and
disclosed in accordance with U.S. GAAP.
14. The following have been properly recorded and/or disclosed in the financial statements:
a. Net positions and fund balance classifications.
b. Guarantees, whether written or oral, under which the Government is contingently liable.
c. Arrangements with financial institutions involving compensating balances or other
arrangements involving restrictions on cash balances.
d. Line of credit or similar arrangements.
e. Agreements to repurchase assets previously sold.
f. Security agreements in effect under the Uniform Commercial Code.
g. Any other liens or encumbrances on assets or revenues or any assets or revenues which
were pledged as collateral for any liability or which were subordinated in any way.
h. The fair value of investments.
Amounts of contractual obligations for construction and purchase of real property or
equipment not included in the liabilities or encumbrances recorded on the books.
j. Any liabilities which are subordinated in any way to any other actual or possible liabilities.
k. Debt issue repurchase options or agreements, or sinking fund debt repurchase ordinance
requirements.
I. Debt issue provisions.
m. All leases and material amounts of rental obligations under long-term leases.
n. All significant estimates and material concentrations known to management which are
required to be disclosed.
o. Authorized but unissued bonds and/or notes.
p. Risk financing activities.
q. Deposits and investment securities categories of risk.
r. Arbitrage rebate liabilities.
15. We have no plans or intentions that may materially affect the carrying value or classification of
assets.In that regard:
a. The Entity has no significant amounts of idle property and equipment or property or
equipment.
b. The Entity has no plans or intentions to discontinue the operations of any activities or
programs or to discontinue any significant operations.
c. Provision has been made to reduce applicable assets that have permanently declined in
value to their realizable values.
d. We have reviewed long-lived assets and certain identifiable intangibles to be held and
used for impairment whenever events or changes in circumstances have indicated that
the carrying amount of the assets might not be recoverable and have appropriately
recorded the adjustment.
16. We are responsible for making the accounting estimates included in the basic financial
statements. Those estimates reflect our judgment based on our knowledge and experience
about past and current events and our assumptions about conditions we expect to exist and
courses of action we expect to take. In that regard, adequate provisions have been made:
a. To reduce receivables to their estimated net collectable amounts.
b. To reduce obsolete, damaged, or excess inventories to their estimated net realizable
values.
c. To reduce investments, intangibles, and other assets which have permanently declined in
value to their realizable values.
d. For risk retention, including uninsured losses or loss retentions(deductibles) attributable
to events occurring through December 31, 2012 and/or for expected retroactive
insurance premium adjustments applicable to periods through December 31, 2012.
e. For pension obligations, post-retirement benefits other than pensions, and deferred
compensation agreements attributable to employee services rendered through December
31, 2012
f. For any material loss to be sustained in the fulfillment of, or from the inability to fulfill, any
service commitments.
g. For any material loss to be sustained as a result of purchase commitments.
h. For environmental dean-up obligations.
17. There are no:
a. Material transactions that have not been properly recorded in the accounting records
underlying the financial statements.
b. Violations or possible violations of laws or regulations whose effects should be
considered for disclosure in the financial statements or as a basis for recording a loss
contingency. In that regard, we specifically represent that we have not been designated
as, or alleged to be, a "potentially responsible party" by the Environmental Protection
Agency in connection with any environmental contamination.
c. Other material liabilities or gain or loss contingencies that are required to be accrued or
disclosed by GASB Statement No. 10.
18. There are no unasserted claims or assessments that our lawyer has advised us are probable of
assertion and must be disclosed in accordance with GASB Statement No.10.
19. We have no direct or indirect, legal or moral obligation for any debt of any organization, public or
private, or to special assessment bond holders that is not disclosed in the financial statement.
20. The City has satisfactory title to all owned assets.
21. We have complied with all aspects of contractual agreements that would have a material effect on
the basic financial statements in the event of noncompliance.
22. Net positions invested in capital assets, net of related debt; restricted; and unrestricted and fund
balances are properly classified and,when applicable, approved.
23. Expenses or expenditures have been appropriately classified in or allocated to functions and
programs in the statement of activities, and allocations have been made on a reasonable basis.
24. Revenues are appropriately classified in the statements of activities within program revenues and
general revenues.
25. Capital assets, including infrastructure assets, are properly capitalized, reported, and
depreciated.
26. We are responsible for determining that significant events or transactions that have occurred
since the balance sheet date and through June 12, 2013, have been recognized or disclosed in
the financial statements. No events or transactions other than those disclosed in the
consolidated financial statements have occurred subsequent to the balance sheet date and
through June 12, 2013 that would require recognition or disclosure in the basic financial
statements. We further represent that as of J, the financial statements were complete in a form
and format that complied with accounting principles generally accepted in the United States of
America, and all approvals necessary for issuance of the financial statements had been obtained.
27. We have no knowledge of any uncorrected misstatements in the financial statements. We have
informed you of all uncorrected misstatements.
Information Provided
28. We have provided you with:
a. Access to all information, of which we are aware that is relevant to the preparation and
fair presentation of the financial statements such as records, documentation, and other
matters;
b. Additional information that you have requested from us for the purpose of the audit;
c. Unrestricted access to persons within the entity from whom you determined it necessary
to obtain audit evidence.
d. Minutes of the meetings of the governing boards and committees, or summaries of
actions of recent meetings for which minutes have not yet been prepared.
29. All transactions have been recorded in the accounting records and are reflected in the financial
statements.
30. We have disclosed to you the results of our assessment of risk that the financial statements may
be materially misstated as a result of fraud.
31. We have no knowledge of allegations of fraud or suspected fraud, affecting the entity's financial
statements involving:
a. Management.
b. Employees who have significant roles in the internal control.
c. Others where the fraud could have a material effect on the financial statements.
32. We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial
statements received in communications from employees, former employees, analysts, regulators,
short sellers, or others.
33. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations
whose effects were considered when preparing financial statements.
34. We are not aware of any pending or threatened litigation and claims whose effects should be
considered when preparing the financial statements.
35. We have disclosed to you the identity of the entity's related parties and all the related-party
relationships and transactions of which we are aware.
36. We are aware of no significant deficiencies, including material weaknesses, in the design or
operation of internal controls that could adversely affect the City's ability to record, process,
summarize, and report financial data.
37. We are aware of no communications from regulatory agencies concerning noncompliance with, or
deficiencies in,financial reporting practices.
Supplementary Information
38. With respect to supplementary information presented in relation to the financial statements as a
whole:
a. We acknowledge our responsibility for the presentation of such information.
b. We believe such information, including its form and content, is fairly presented in
accordance with accounting principles generally accepted in the United States of
America.
c. The methods of measurement or presentation have changed from those used in the prior
period due to implementation of GASB No.63 and GASB No. 65.
39. With respect to Management's Discussion and Analysis presented as required by the
Governmental Accounting Standards Board to supplement the basic financial statements:
a. We acknowledge our responsibility for the presentation of such required supplementary
information.
b. We believe such required supplementary information is measured and presented in
accordance with guidelines prescribed by accounting principles generally accepted in the
United States of America.
c. The methods of measurement or presentation have changed from those used in the prior
period due to the implementation of GASB No.63 and GASB No. 65
40. During the course of your audit, you may have accumulated records containing data that should
be reflected in our books and records. All such data have been so reflected. Accordingly, copies
of such records in your possession are no longer needed by us.
In connection with your audit,conducted in accordance with Government Auditing Standards, we confirm:
41. We are responsible for:
a. Compliance with the laws, regulations, and provisions of contracts and grant agreements
applicable to the City of Seward.
b. Establishing and maintaining effective internal control over financial reporting.
42. We have identified and disclosed to you:
a. All laws, regulations, and provisions of contracts and grant agreements that have a direct
and material effect on the determinations of financial statement amounts or other
financial data significant to audit objectives.
b. Violations (and possible violations) of laws, regulations, and provisions of contracts and
grant agreements whose effects should be considered for disclosure in the auditor's
report on noncompliance.
43. We have a process to track the status of audit findings and recommendations.
44. We have identified for you previous audits, attestation engagements, performance audits, or other
studies related to the objectives of the audit being undertaken and the corrective action taken to
address significant findings and recommendations.
45. We assume all management responsibilities in connection to nonaudit services performed in
connection with your audit.
46. We have designated an individual, who possesses suitable skill, knowledge, or experience to
oversee the nonaudit services performed in connection with your audit.
47. We have reviewed, approved, and take full responsibility for the financial statements and related
notes and acknowledge the auditor's role in the preparation of this Information.
48. We have reviewed, approved, and take full responsibility for all accrual adjustments, preparation
of the data collection form and an acknowledgement of the auditor's role in the preparation of the
adjustments.
In connection with your audit of federal awards conducted in accordance with OMB Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations and State of Alaska Audit Guide and
Compliance Supplement for State Single Audits,we confirm:
49. We are responsible for complying, and we have complied, with the requirements of OMB Circular
A-133 and State of Alaska Audit Guide and Compliance Supplement for State Single Audits.
50. We are responsible for understanding and complying with the requirements of laws, regulations,
and the provisions of contracts and grant agreements related to each of our federal and state
programs.
51. We are responsible for establishing and maintaining, and we have established and maintained,
effective internal control over compliance for federal and state programs that provides reasonable
assurance that we are managing federal awards in compliance with laws, regulations, and the
provisions of contracts or grant agreements that could have a material effect on our federal and
state programs.
52. We have prepared the schedule of expenditures of federal awards in accordance with Circular A-
133 and the schedule of state financial assistance in accordance with the State of Alaska Audit
Guide and Compliance Supplement for State Single Audits and have included expenditures made
during the period being audited for all awards provided by federal agencies in the form of grants,
federal cost-reimbursement contracts, loans, loan guarantees, property (including donated
surplus property), cooperative agreements, interest subsidies, insurance, food commodities,
direct appropriations, and other assistance.
53. We have identified and disclosed to you the requirements of laws, regulations, and the provisions
of contracts and grant agreements that are considered to have a direct and material effect on
each major program.
54. We have made available all contracts and grant agreements (including amendments, if any) and
any other correspondence relevant to federal and state programs and related activities that have
taken place with federal and state agencies or pass-through entities.
55. We have identified and disclosed to you all amounts questioned and all known noncompliance
with the direct and material compliance requirements of federal and state awards.
56. We believe that we have complied with the direct and material compliance requirements.
57. We have made available all documentation related to compliance with the direct and material
compliance requirements, including information related to federal and state program financial
reports and claims for advances and reimbursements.
58. We have provided you our interpretations of any compliance requirements that are subject to
varying interpretations.
59. We have disclosed to you any communications from grantors and pass-through entities
concerning possible noncompliance with the direct and material compliance requirements,
including communications received from the end of the period covered by the compliance audit to
the date of your report.
60. We have disclosed to you the findings received and related corrective actions taken for previous
audits, attestation engagements, and internal or external monitoring that directly relate to the
objectives of the compliance audit, including findings received and corrective actions taken from
the end of the period covered by the compliance audit to the date of your report.
61. We have disclosed the nature of any subsequent events that provide additional evidence with
respect to conditions that existed at the end of the reporting period that affect noncompliance
during the reporting period.
62. We have disclosed all known noncompliance with direct and material compliance requirements
occurring subsequent to the period covered by your report.
63. We have disclosed whether any changes in internal control over compliance or other factors that
might significantly affect internal control, including any corrective action taken by us with regard to
significant deficiencies in internal control over compliance (including material weaknesses in
internal control over compliance), have occurred subsequent to the date as of which compliance
is audited.
64. Federal and state program financial reports and claims for advances and reimbursements are
supported by the books and records from which the basic financial statements have been
prepared.
65. The copies of federal and state program financial reports provided to you are true copies of the
reports submitted, or electronically transmitted, to the federal and state agency or pass-through
entity, as applicable.
66. We have monitored subrecipients to determine that they have expended pass-through assistance
in accordance with applicable laws and regulations and have met the requirements of Circular A-
133.
67. We have considered the results of subrecipient audits and have made any necessary
adjustments to our own books and records.
68. We have charged costs to federal and state awards in accordance with applicable cost principles.
69. We will accurately completed appropriate sections of the data collection form. We further
acknowledge our responsibility for the complete, accurate, and timely filing of the data collection
form with the Federal Audit Clearinghouse.
City of Seward
'li &A444-0-4.4141,94.?
Ci• nager Finance Director