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CITY OF SEWARD, ALASKA
RESOLUTION 2006-123
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, ADOPTING AN ALTERNATIVE ALLOCATION METHOD
FOR THE FY2007 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, AS 29.60.450 requires that for a municipality to participate in the FY2007
Shared Fisheries Business Tax Program, the municipality must demonstrate to the Department of
Commerce, Community and Economic Development that the municipality experienced
significant effects during calendar year 2005 from fisheries business activities; and
WHEREAS, 3 AAC 134.060 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
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WHEREAS, 3 AAC 134.070 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 $61,650.23 in FY2007 funding
available within the Cook Inlet Fisheries Management Area, in agreement with all other
municipalities in the area participating in the FY2007 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 2005 from fisheries business activities that occurred
within the Cook Inlet fisheries management area, and seeks to apply for funding under the
FY2007 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.
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CITY OF SEWARD
RESOLUTION 2006-123
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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 6th
day of November, 2006.
THE CITY OF SEWARD, ALASKA
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AYES:
NOES:
ABSENT:
ABSTAIN:
Dunham, Valdatta, Thomas, Schafer, Bardarson, Amberg, Shafer
None
None
None
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ATTEST:
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, Jean LeWIS J
City Clerk
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COUNCIL AGENDA STATEMENT
Meeting Date: November 6, 2006
Through: Clark Corbridge, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: 2007 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 14th year of this program, and municipalities across the state will share approximately $1.87
million based on 2005 fisheries activity as reported by fish processors on their fish tax returns. This
amount is up approximately $130,000 from the amount shared in the previous year.
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 FY2007 program
allocation to be shared within this area is approximately $61,650.23, up $9,018.21 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),
therefore the city of Seward is required to complete the Long Form Application. The final deadline for
submitting application for the FY2007 Shared Fisheries Business Tax Program is December 15, 2006.
The long-form application provides for a “standard” and an “alternative” method of funding allocation.
The alternative method must be filed by November 1, 2006.
Standard Method
: Under this method, each municipality must determine and document the cost of
fisheries business impacts experienced by the community in 2005. 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.
COUNCIL AGENDA STATEMENT
FY2007 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 less than in previous years, but it was enough to require the long form application. 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 ninth 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 $8,400 in 2007.
Approved by Finance Department: __________________________
RECOMMENDATION:
Council approve Resolution 2006- adopting an alternative method for the FY2007 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.