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HomeMy WebLinkAboutRes2020-003 Sponsored by: Meszaros CITY OF SEWARD,ALASKA RESOLUTION 2020-003 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, ADOPTING AN ALTERNATIVE ALLOCATION METHOD FOR THE FY2020 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, Alaska Statute 29.60.450 requires that for a municipality to participate in the FY2020 Shared Fisheries Business Tax Program ("Program"), the municipality must demonstrate to the Department of Commerce, Community, and Economic Development (DCCED) that the municipality experienced significant effects during calendar year 2018 from fisheries business activities; and WHEREAS, Title 3, AAC 134.060 and AAC 134.070 provide for the allocation of available program funding to eligible municipalities located within fisheries management areas specified by the DCCED; and WHEREAS, the Program provides for the use, at the discretion of the DCCED, of alternative allocation methods which may be used within fisheries management areas if all eligible municipalities within the area agree to use the 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 Seward City Council proposes to use an alternative allocation method for allocating FY2020 funding available within the FMA 14: Cook Inlet Fisheries Management Area, in agreement with all other municipalities in the area participating in the FY2020 Shared Fisheries Business Tax Program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,ALASKA that: Section 1. The City Council certifies that the City of Seward did experience significant effects during calendar year 2018 from fisheries business activities that occurred within the Cook Inlet fisheries management area, and seeks to apply for funding under the FY2020 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. Section 3.This resolution shall take effect immediately upon adoption. CITY OF SEWARD,ALASKA RESOLUTION 2020-003 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 13th day of January,2020. THE T OF SEWARD KA Christy Terr , Mayor AYES: Osenga, Baclaan, Butts, Lane,McClure,Terry NOES: None ABSENT: Seese ABSTAIN: None ATTEST: Brenda J. Ballo M C ..r City Clerk (City Seal)...••���724 j %*c1 ®� ��tj: h • : : • . , SE L • —0-- F• / tie 4-0' AL''''''z. AGENDA STATEMENT Meeting Date: January 13,2020 Through: Scott Meszaros, City Manager IT'rr From: Sam Hickok,Acting Finance Director Agenda Item: 2020 Shared Fisheries Business Tax and Landing 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 and the State Landing Tax Allocation. 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 program is different from the state fish tax sharing program which shares fish tax revenues collected inside municipal boundaries. This is the 27th year of this program, and municipalities across the state will share tax revenues from 2018 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 and shellfish processed in each area, compared to the total fish and shellfish processed for the whole state. Then, funds are 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 twelve communities: Anchorage, Homer, Kenai, Kenai Peninsula Borough, Kachemak, Seldovia, Soldotna, Seward, Matsu Borough, Houston, Palmer and Wasilla. The final deadline for submitting application for the FY2020 Shared Fisheries Business Tax and Landing Tax Program is February 18,2020. 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 2018. 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 im>l act 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. 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 information 42 required by the Iong-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 seventeenth consecutive year of using this method. INTENT: The intent of this action is to authorize the City to participate in the Alternative Method of computing Shared Fisheries Business Tax. CONSISTENCY CHECKLIST: Yes No N/A 1. Comprehensive Plan (document source here): X 2. Strategic Plan(document source here): X 3. Other(last): X ATTORNEY REVIEW: Yes X No FISCAL NOTE: Using this same allocation method, Seward expects to receive approximately $720.55 in Shared Fisheries Business Tax Allocation, a decrease from FY2019 allocation of$2,006.05. Approved by Finance Department: RECOMMENDATION: Council approve Resolution 2020-003adopting an alternative method for the FY2020 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. 43