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HomeMy WebLinkAbout01122015 City Council Laydowns 4a/rs m-in Johanna Kinney From: Iris Darling Sent: Monday,January 12, 2015 11:58 AM To: Johanna Kinney Subject: RE: Council Resolution 2015-2; letter and talking points Attachments: image001.png Follow Up Flag: Follow up Flag Status: Flagged Hello Johanna and mayor and council members I am having tousle keeping up over here. Email very space Ey. But having a great break. Am particularly interested in helping fishing industry any way we can. It is one of Sewards lifelines. Also when is attorney's evaluation and city clerk s evaluation Would like to add my comments if possible. Looks like that might happen before I get back.Thanks. Iris From:Johanna Kinney Sent: Friday,January 09, 2015 10:35 AM To: Christy Terry; Dale Butts; David Squires; Iris Darling;Jean Bardarson;Joshua A. Estes; Marianna Keil; Ristine Casagranda Cc: Ron Long; Mack Funk Subject: FW: Council Resolution 2015-2; letter and talking points Mayor&Council, I'm forwarding this per request below. This information will also be made available to the public at Monday night's council meeting. Thanks, Brenda for fcid:image001.png@01D02BF7.BF18E2A01 From: Bob Linville f mailto:linville@ak.netl Sent:Thursday,January 08, 2015 9:46 PM To:Johanna Kinney Subject: Council Resolution 2015-2; letter and talking points Hi Johanna I just spent this long winter evening writing up this list of talking points with a cover letter about the crane resolution. Can you copy them to all of the Council Members and the Mayor for me. Unfortunately, I don't think I will be able to attend Monday night's meeting. Thanks,Johanna. Bob Linville 224-3252 1 (/1Z/ ZOl5 L_pc-•IDoIA) N Brenda Ballou From: Jim Hunt Sent: Friday,January 09, 2015 2:58 PM To: Brenda Ballou;Johanna Kinney Subject: Alaska Statute regarding Shared Fisheries Business Tax; highlighted pertinent part in red Hi, Would you please introduce this as a lay down on Monday night? Thanks, Jim Article 6. Shared Fisheries Business Taxes. Sec. 29.60.450. Fisheries business tax allocation. (a)A municipality may receive a fisheries business tax allocation under this section if the municipality demonstrates to the department that the municipality suffered significant effects from fisheries business activities during the base year. (b) The amount transmitted each fiscal year(1) under AS 43.75.137 shall be apportioned by the department to each management area based on the ratio of the management area's production value to the total production value for all of the management areas; the department shall allocate the amount available for each management area to each municipality in that management area based on the demonstrated effects on the municipality of fisheries business activities, the commercial fishing vessel days in that municipality, or both; (2) under AS 43.77.060(d) shall be apportioned by the department to each management area based on the ratio of the management area's fishery resource landing tax production value to the total fishery resource landing tax production value for all of the management areas; the department shall allocate the amount available for each management area to each municipality in that management area based on the demonstrated effects on the municipality of fisheries activities that are subject to the tax levied under AS 43.77. (c)A municipality that receives a tax allocation under this section shall use the tax allocation to help reduce the effect of fisheries business activities on the municipality, which may include the expenses of any municipal service. (d)At the request of the department, an applicant or a recipient of a tax allocation shall provide the department with the assistance and information available to the municipality that is necessary for the department to carry out the department's duties under this section relating to that municipality. (e) The department may adopt regulations necessary to carry out the provisions of this section. (f) In this section (1) "base year" means the calendar year that precedes the application deadline for the tax allocation year; (2) "commercial fishing vessel day" means a day for which a fishing vessel licensed under AS 16.05.490 pays the municipality a moorage, harbor, or docking fee; (3) "effect" means the result of fisheries business activities on the municipality's (A) population; (B) employment; (C) finances; (D) air and water quality; (E) fish and wildlife habitats; and (F) ability to provide essential public services, including health care, public safety, education, transportation, marine garbage collection and disposal, solid waste disposal, utilities, and government administration; 1 L14OUJPJ Cnnatik-ELAA0 Public Crane Talking Points January 12, 2015 • The Council has committed all available Harbor Enterprise Fund money, and more, towards float replacement of critical and failing infrastructure. • The City's top Harbor priority is to replace B, C, S, and a portion of G floats • The City Council agreed to fund the required local match amount of$2.6 Million (plus 100% of the engineering cost) on July 14, 2014 via Resolution 2014-057 • After the project is designed and bids are opened, the construction contract cost of the dock replacement project won't be known until June 2015 • The funding of the grant match will deplete the Harbor's cash reserves and require borrowing (currently estimated at $1.7 Million) • The Harbor currently owes $5.3 Million in bonded indebtedness. Annual debt service is more than $700,000 per year. • The Harbor's portion of the Raw Fish Tax can be used to offset some of the additional indebtedness required for the dock replacement project • The Harbor received the following amounts of Raw Fish Tax: in 2013-- $320,000 and in 2014-- $241,000 • The number of commercial fishermen home-ported in Seward rose by 32% between 2006 and 2012 according the Alaska Commercial Fisheries Entry Commission • The City Administration appropriated $3,900 on August 29, 2013 for a preliminary design report for a public crane that was completed in October 2013 • That report estimated the cost of installing two cranes on I-dock ($344,000) and one crane on the travel lift bulkhead ($319,000) • PACAB requested two other alternatives: 1) a five ton crane on I- dock and 2) a 1.5 ton crane on the travel lift bulkhead • The Harbormaster guess-timated the cost of the two other alternatives: 1) a five ton crane on I-dock $294,000 and 2) a 1.5 ton crane on the travel lift bulkhead $250,000 • On February 19, 2014, the City Administration recommended to PACAB the final engineering design to install one 1 .5 Ton crane on the Travel Lift Dock Bulkhead at a cost of$43,000 • On March 19, 2014, PACAB amended and voted to approve Resolution 2014-01 recommending that the City Council fund the final design of an 8-Ton Crane on I-Dock at a cost of$35,000 • According to Icicle Seafoods, their biggest capacity crane can lift 3.9 tons. The harbor in Homer has cranes with a capacity of 5 tons. • The City's Capital Improvement Plan includes $300,000 in 2014 for a 5-Ton crane • There has been no action taken to appropriate any funds to pay for engineering or the crane itself • A public crane is unlikely to generate enough revenue to pay for itself • Nevertheless, although a crane is not expected to break-even financially, we recognize sufficient value in having a working crane available that administration brought the resolution to PACAB that balanced the considerations of cost, safety, and public needs • There are fixed cranes at each of the three seafood processors in Seward: Icicle, Polar, and Resurrection Bay • Finally, to conclude, the City Administration is not opposed to a public crane, but isn't sure how to pay for it IZ(2o is— n1 PUBLIC CRANE TALKING POINTS from the public's perspective • The Fisheries Business Tax levied on the exvessel value of commercially caught fish in the State of Alaska has been in place for decades. The tax receipts are divided by formula between the State and the municipalities in which the fish deliveries were made. Each year the State sends out a check in the amount of each municipality's share according to the formula. • The Fisheries Business tax is split 50/50 between the State and the Borough, and the Borough share then split 50/50 with the City of Seward. (see AS 43.75.015. Fisheries Business Tax) • As such, Seward's share represents around one percent of the exvessel value of fish delivered across our docks. • Over the last ten years, Seward has collected over $4.2 million dollars as its share of Fish Tax receipts from the State. (See Shared Tax Reports for the years 2004 -2014 available at www.tax.alaska.gov) • Other than fuel, minor expenses such as groceries and fish tax, the 95% or so remaining of the $400 million in exvessel value delivered here stays with the boat. • The only way Seward ever sees any of it is by attracting commercial fishermen to homeport in our community. • From the time of its inception in 2007 through 2014, Seward has collected a total of 2.466 million dollars from the Commercial Passage Vessel Tax (Cruise Ship Tax). (See Shared Tax Reports for the years 2007 -2014 available at www.tax.alaska.gov) • Seward's Fish Tax receipts from 2007 — 2014 have been 3.513 million dollars making the fish tax one of our top harbor revenue generators. • The Fish Tax is considered an Other Governmental Revenue in Seward's annual budget. Prior to 2011, the entire Fish Tax was allocated into Seward's general fund. Since 2011, 50% of the Seward's share of the Fish Tax has been allocated to the Seward Boat Harbor Enterprise Fund. • Seward lacks workboat infrastructure such as harbor cranes and grids that are considered standard by all of our neighboring ports, and virtually every other harbor in the State of Alaska. Homer has eight public cranes, Valdez r two, Cordova three, and Whittier one. Homer and Cordova have two grids each in their harbors, Valdez and Whittier have one. • The unfortunate death of a local man three years ago occurred when a boom truck loading a seine on T dock tipped over and killed him. The crane proposed in this resolution is large enough for that purpose and can be equipped with failsafe limiters to prevent overload in any configuration. • Cannery cranes can and are used, but only when the cannery has an operator available, space at the dock in front of the crane, and an interest in the fish being delivered. This requires all other buyers to provide their own boom trucks making it easier and cheaper for them to go to any other harbor all of which have public cranes available. Bad economics for Seward. • Seward's lack of working harbor amenities makes it more expensive and logistically difficult for commercial fishermen to operate from our port. • As such, the share of exvessel commercial fishing income based in Seward has dwindled to one seventh that of Homer, one sixth of Cordova's, and one fourteenth of Kodiak's. (see ufafish.org/fishing facts) • Seward's proximity to PWS salmon fisheries, and superb halibut and black cod grounds and our easy access to Anchorage lay in contrast to its lack of homeported fishing boats in our harbor, fishing families in our town, and fishing jobs available to our youth. • PACAB discussed various crane projects for several months; including public testimony from nine people leading up to the unanimous passage of the crane resolution on the Council agenda. • The resolution submitted by the Administration to PACAB in the packet to begin discussion last March actually called for a larger expenditure of funds than the resolution as passed by PACAB. • Taking into account public testimony, and the likelihood that this would be the only crane project in Seward's future for quite some time, changes were made in the scope and location of the proposed crane project from that proposed by the administration. • Lack of Administration support contributed to the seven month delay in getting PACAB's crane resolution to Council. • During that seven months, a several other large harbor projects have been either purchased or are in progress; a new SMIC boatlift, Docks A,B, C, and S replacement, new south harbor ramp, and new NE fish cleaning station. • Once again, getting a public crane in our harbor is seen by the Administration as a harbor item that we just can't afford. • 4.2 million dollars' worth of commercial fishing tax receipts have been spent on everything else in the City budget including the operation and bonding of the boat harbor during the last ten years. • A lot of work by PACAB, the Administration, and the public has gone into the crane resolution before you tonight. • Only a yes on this resolution will allow the engineering to be done to the point where we will know if an eight ton crane on I dock is even feasible. The dock might not support it without additional pilings. However, PACAB did review examples of steel dock reinforcements under cranes in other harbors that need to be analyzed for this project as part of the design. • If the Administration prefers the smaller crane on the Travel lift bulkhead, so be it; any crane at all would be a vast improvement. The price tags aren't that much different assuming new pilings aren't needed. To flat out say we can't afford it, while spending fish tax money on everything else on the list is business as has unfortunately become customary in Seward over many, many years. • The crane is on the Harbor Capital Projects list for 2014. • It has been ten years since the last effort to get a crane in Seward's harbor. • Should Council vote flat out NO on the crane resolution, there would be little point trying for another one for the next several years at least. Please vote yes. It's good for our town and our economy. For any who have labored through this list, I thank you for your perseverance. Respectfully, Bob Linville linville@ak.net 224-3252 f 12/2016 January 8, 2015 City Council and Mayor City of Seward Re: Resolution 2015-2; Harbor Crane Dear Mayor and Council: Mack kindly forwarded to me a copy of the talking points he prepared for you as you deliberate the crane resolution on Monday's Council agenda. I pretty much agree with every point on his list except the one that infers more commercial fishermen in town. A different conclusion can be drawn from the CFEC permit/vessel database with footnotes that he referred to. I see a pretty stable group of fishermen here over the last ten years or so, but stable at a very low level relative to the size of the fleets moored around us in Southcentral Alaska. Also, a generational transfer looms and Seward needs a pipeline of young fishermen to step up to the helm if we want to keep the boats that we have now. Two major issues over which the City Council has authority need to be addressed if we are ever to turn this picture around. One is the ad valorum vessel tax issue which I understand Ron Long is working on. The other is our total lack of working infrastructure in the Seward Boat Harbor. This resolution is a beginning on the infrastructure front. I put together my own list of talking points that includes analysis of the fish tax, economics of the fishing industry, a history of work done in putting this resolution in front of you, and some discussion of the project itself and why it's needed. The list got kind of long, but I hope you will find it all at least somewhat relevant. If you didn't get the list, or if you have any questions at all, please give me a call or send an email. Thanks for your consideration of this important harbor topic and for your service to our community. Sincerely, Bob Linville 224-3252 Iinville@ak.net