HomeMy WebLinkAboutOrd2016-002 Sponsored by: City Attorney
Introduction: May 23, 2016
Public Hearing: June 13, 2016
Enactment: June 13, 2016
CITY OF SEWARD,ALASKA
ORDINANCE 2016-002
- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA,AMENDING PORTIONS OF SEWARD CITY CODE § 7.10.135
WHEREAS, the public trust doctrine and good public policy require public access to
submerged tidelands and prohibit the sale of moorages in fee simple; and
WHEREAS, the intent of Tile 7.10 of the Seward City Code is that moorage space may
only be assigned to an applicant with a qualified interest in the vessel to which space is to be
assigned and that a holder's right does not transfer with the sale or other disposition of the vessel,
to preserve public access; and
WHEREAS, recently the U.S. Supreme Court held that corporations have independent
constitutional rights akin to individual citizens has created some ambiguity as to whether a sale
of the stock in a corporation causes the corporation to cease to have a"qualifying interest" in the
vessels owned by the corporation that would cause the corporation to forfeit reserved moorage
space in the City harbor; and
WHEREAS, it is desirable to eliminate this ambiguity and treat all ownership transfers
on an equal basis.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, HEREBY ORDAINS that:
Section 1. The definition of"qualifying interest" found in Seward City Code Section
7.10.135 is amended as follows:
(Deletions are Bold Strilctroughs; Additions are Bold/Underline/Italics)
Qualifying interest. "Qualifying interest" in a vessel means the interest of a person who owns the
vessel or, under the provisions of a written charter or lease, has exclusive control over the
operation and navigation of the vessel. A person who transfers title to a vessel or enters into a
charter or lease of the vessel, and thereby relinquishes his exclusive control over the use and
operation of the vessel, ceases to have a qualifying interest in the vessel. A qualifying interest in
a vessel ceases with the transfer of a controlling interest in a public or privately held entity
that has a qualifying interest in that vessel, regardless of official designation of title.
CITY OF SEWARD,ALASKA
ORDINANCE 2016-002
Section 2. This ordinance shall take effect ten(10) days following its enactment.
ENACTED by the City Council of the City of Seward, Alaska, this 13th day of June,
2016.
THE CITY OF SEWARD, ALASKA
i
J an Bardarson, Mayor
AYES: Keil, Butts, McClure, Bardarson
NOES: Casagranda, Altermatt
ABSENT: Squires
ABSTAIN: None
ATTEST:
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J• anna Ki 'ICMC
ty Clerk
(City Seal) a :
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Council Agenda Statement
of IC%Meeting Date: May 23, 2016
From: William Emhart, City Attorney
Agenda Item: Ordinance 16-OaTitle 7 revisions
BACKGROUND &JUSTIFICATION:
Public access to submerged tidelands must be protected and the ability to transfer
ownership to such lands is limited. Submerged tidelands owned by the City are protected under
the "public trust doctrine" as described in Illinois Cent. R. Co. v. State of Illinois, 146 U.S. 387,
13 S. Ct. 110, 111, 36 L. Ed. 1018 (1892) and its progeny. Public access to these tidelands must
be preserved and the City may not sell or grant a permanent license to a private entity without
guaranteeing public access;tidelands generally cannot be sold in fee simple absolute.
The public trust doctrine is codified in Seward City code in a number of ways including
restricting the transfer of moorage space. Seward City Code (Title 7.10) provides that moorage
space may only be assigned to an applicant with a qualified interest in the vessel to which space
is to be assigned. The code limits the duration of a holder's interest in a reserved moorage space
to the holder's lifetime and does not allow the transfer of moorage space with the sale of a
vessel, although the code does allow for replacement of an existing vessel. The current
regulations regarding moorage and qualifying interests have existed at least since the 1995 re-
write of Chapter 7.10 by Ordinance No. 95-11.
Under the code, corporations, partnerships, and Limited Liability Corporations are
allowed to be "holders" and have "qualifying interests" in assigned moorage space. The concept
of a corporation as an independent entity is recognized in the Seward City code; a corporation
may be considered a "person" under SCC 7.10.135 (definitions.) This is consistent with the
common law view of corporations including in reference to vessel ownership. What is not clear
under the existing code is the effect of a"stock sale" on a "qualifying interest." In a stock sale,
the ownership of the company changes but the corporation itself still exists with the same assets
and liabilities.
Historically the City has taken a broad view of the public trust doctrine and has restricted
the transfer of moorage rights by a narrow interpretation of the code looking to controlling
interests in a vessel, as opposed to simply "title." Recently the US Supreme Court held that
corporations have independent constitutional rights akin to individual citizens in Citizens United
v. Fed. Election Comm'n, 558 U.S. 310, 312, 130 S. Ct. 876; 175 L. Ed. 2d 753 (2010) which has
further complicated this ambiguity.
This amendment of Title 7 is intended to make it clear that the public interest doctrine
will be followed and eliminates the current ambiguity.
F:\507486\1002\00515983.DOCX
CONSISTENCY CHECKLIST: Yes No N/A
1 Comprehensive Plan: value an open, responsive city government based X
on a high level of citizen input and community involvement. (pg. 13)
Strategic Plan: the mission of the City of Seward government is to
2. provide quality leadership, operate efficiently, be responsive to the X
desires of its residents (pg. 2)
3. Other(list): X
ATTORNEY REVIEW: Yes X No
FISCAL NOTE:
These proposed revisions do not result in additional costs to the City, or additional revenues.
Approved by Finance Department: u . 0,..i.tz4 -4.).
RECOMMENDATION:
Council approve Ordinance 2016-l appencAct-
few Ordinan002\00515983.DOCX