HomeMy WebLinkAboutRes2022-002 Fish TaxSponsored by: Bower
CITY OF SEWARD, ALASKA
RESOLUTION 2022-002
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, ADOPTING AN ALTERNATIVE ALLOCATION METHOD
FOR THE FY2022 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 AUTHORIZING THE CITY MANAGER TO
APPLY FOR FUNDS FROM THE SHARED FISHERIES BUSINESS TAX
PROGRAM
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 that the municipality
experienced significant effects during calendar year 2020 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
WHEREAS, 3 AAC 134.070 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
WHEREAS, the Program 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 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 City Council of the City of Seward, Alaska proposes to use an alternative
allocation method for allocating FY2022 funding available within the FMA 14: Cook Inlet
Fisheries Management Area, in agreement with all other municipalities in the area participating in
the FY2021 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 2020 from fisheries business activities that occurred within the Cook
Inlet fisheries management area, and seeks to apply for funding under the FY2022 Shared Fisheries
Business Tax Program.
CITY OF SEWARD, ALASKA
RESOLUTION 2021-002
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.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 101h
day of January, 2022.
AYES:
Calhoon, Casagranda, DeMoss, Osenga, Wells, McClure, Terry
NOES:
None
ABSENT:
None
ABSTAIN:
None
ATTEST:
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Brenda J. Ballou MC
City Clerk
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City Council Agenda Statement
Meeting Date: January 10, 2022
To: City Council
Through: Janette Bower, City Manager
From: Sam Hickok, Acting Finance Director
Agenda Item: Resolution 2022-002: Adopting an Alternative Allocation Method for the
FY2022 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
Authorizing the City Manager to Apply for Funds from the Shared Fisheries
Business Tax Program
Background and 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 29th year of this program, and municipalities across the state will share tax revenues
from 2020 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 FY2022
Shared Fisheries Business Tax and Landing Tax Program is February 15, 2022.
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 2020. 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.
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
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 eighteenth consecutive year of using this method.
Using this same allocation method, Seward expects to receive approximately $19.35 in Shared
Fisheries Business Tax Allocation, a decrease from FY2021 allocation of $350.17.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan:
Strategic Plan:
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 19.35 -Shared Fisheries Business Tax Allocation
This legislation (✓):
✓ Creates revenue in the amount of:
Creates expenditure in amount of:
Creates a savings in the amount of:
Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
✓ Not budgeted
Not applicable
19.35 - Shared Fisheries Business Tax Allocation
Finance Director Signature: f 4
Attorney Review-' Administration Recommendation
Yes ✓ Adopt Resolution
✓ Not applicable Other: