The URL can be used to link to this page

Home My WebLink About06282006 Godwin AppealAPPEAL HEARING June 28, 2006 City Council Chambers Beginning at 12: 00 p.m. eal Hearin June 28, 2006 Vanta Shafer Mayor Term Expires 2007 Willard E. Dunham Council Member Term Expires 2006 Robert Valdatta Council Member Term Expires 2007 Robert Thomas Council Member Term Expires 2007 Steve Schafer Council Member Term Expires 2007 Dorene Lorenz Council Member Term Expires 2006 Jean Bardarson Council Member Term Expires 2006 Clark Corbridge City Manager Jean Lewis City Clerk Brad Meyen Cheryl Brooking City Attorney 12:00 mm. Council Chambers 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVAL OF AGENDA 5. HEARING ON APPEAL 6. Appeal by Jim Cork, Owner of Ultimate Tours LLC, dba Godwin Glacier Sled Dog Tours. The city has denied their 2006 application for a City of Seward business license. 6. EXECUTIVE SESSION 7. ADJOURNMENT Appeal Hearing RE: Business License Denial for Ultimate Tours LLC, dba Godwin Glacier Dog Sled Tours TABLE OF CONTENTS A. Agenda Statement from city clerk..............................Pg 3 B, Published notices of appeal hearing .............................Pg 4 C. Pertinent Seward City Code Chapters and Sections .......... Pg 6 D. Copy of Complaint for Sales Tax filed in Superior Court by the Kenai Peninsula Borough........................................Pg 12 E. Business License Application for Ultimate Tours LLC...... Pg 15 F. May 18, 2006 notice of non-compliance from Kenai Peninsula Borough............................................................Pg 16 G. City Clerk denial of business license letter dated May 22, 2006................................................................Pg 17 H. City Manager denial of business license letter dated May 31, 2006................................................................Pg 19 I. Notice of Appeal filed by Ultimate Tours LLC dated June 1, 2006................................................................Pg 26 J. Email from Kenai Peninsula Borough in response to allegations in June 1, 2006 Notice of Appeal..................................Pg 28 Ultimate Tours LLC, dba Godwin Glacier Dogsled Tours Jim Cork, Owner P.O. Box 2711 Seward, Alaska 99664 DENIAL OF A BUSINESS LICENSE NOTICE OF APPEAL HEARING Dear Mr. Cork; Your notice of appeal of a decision by the City Manager to deny issuance of a 2006 city of Seward business license for violation of SCC 8.30.025 (C)(7) (verification of current sales tax accounts by the Kenai Peninsula Borough), was received in the City Clerk's Office on June 1, 2006. Your Appeal Hearing is scheduled for: DATE: Wednesday, June 28, 2006 TIME: 12:00 p.m. (Noon) PLACE: City Council Chambers, City Hall, Seward, Alaska WHOM: Before the Seward City Council If you have any supporting documents you would like in the packet, please bring them into the City Clerk's office no later than 5:00 p.m. Thursday, June 22, 2006 for inclusion. This hearing will commence at the above date and time in the City Council Chambers, City Hall, 410 Adams Street, Seward, Alaska. For more information contact the City Clerk at P.O. Box 167, Seward, AK 99664 or e-mail clerkgcityofseward.net. A copy of Chapter 8.30 of the city code is attached for your convenience. Sincerely, Jean Lewis City Clerk : City Council City Attorney City Manager To: V Seward City Council From: Jean Lewis, City Cle k Agenda Item: Appeal Hearing on Denial of a Business License BACKGROUND & JUSTIFICATION: The city has denied the 2006 application for a business license for Jim Cork, Owner of Ultimate Tours LLC, dba/Godwin Glacier Dog Sled Tours because of non-compliance issues with the Kenai Peninsula Borough. Seward City Code 8.30.025 (C)(7) states each application shall have ,'verification from the Kenai Peninsula Borough that all sales and property tax accounts are current." This account has been delinquent since June 2004. The city manager's decision (attached) gave Ultimate Tours LLC options to continue service until the pending civil lawsuit with the Borough was settled. They could post a bond or sign a good faith agreement to pay the taxes in the event the court ruled in favor of the Kenai Peninsula Borough. Neither option was accepted. The Kenai Peninsula Borough has filed a civil lawsuit with the Superior Court for past due sales taxes and arrearages. Ultimate Tours LLC claims they are exempt. The Borough disagrees. Copies of pertinent letters, notices and paperwork are listed in the Table of Contents and attached. No supporting documents were submitted by the appellant for inclusion. Since June 1, 2006, Jim Cork has filed a new application for a 2006 city business license under the name of Heilo America LLC. That application was not delinquent at the time, and they were issued a 2006 city business license. Seward City Code 8.30.040 states that any person denied a business license may appeal an adverse decision by the city manager to the city council. Mr. Cork, through Diane Chavez, filed a written notice of appeal with the city clerk within 30 days of the decision, therefore it was timely. All parties may be represented by counsel and offer witnesses and exhibits at this hearing. Appeals are held on the basis of the record established. No new evidence may be received or considered, but the council may allow for oral presentations by the appellant and administration. The appellant may appeal the city council decision to the Superior Court within 30 days. INTENT: Present documentation supporting the city's decision to deny a 2006 business license application for Ultimate Tours LLC, because of non-compliance with the Seward City Code. 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. Other SCC Chapter 8.30 RECOMMENDATION: The Seward City Council must listen to the case on appeal, make a motion to go into executive session to deliberate and prepare findings of fact and conclusions of law. The City council will decide whether to uphold the administration decision or reverse it. The written statement shall be issued within 30 days from the appeal j ___._ - __.._L..1 iZ_A:.. —FiFnt o,A rnnrhizinn of SEWARD CITY COUNCIL PUBLIC NOTICE OF APPEAL HEARING June 28, 2006 at Noon NOTICE IS HEREBY GIVEN that the Seward City Council will conduct an appeal hearing on the following item of business at a meeting on June 28, 2006. Administrative Appeal of a city manager decision to deny a 2006 business license for Ultimate Tours LLC, dba Godwin Glacier Tours for violation of SCC 8.30.025(c)(7) which is verification of current sales tax accounts with the Kenai Peninsula Borough. The appeal hearing will commence at 12:00 p.m. (noon), or as soon thereafter as business permits, in the City Council Chambers, City Hall, 410 Adams Street, Seward. All interested persons are invited to attend the meeting. POSTED: Friday, June 16, 2006 at 2:00 p.m. City Hall Bulletin Board U.S. Post Office Harbormaster's Office Chapter 8.30 Business License 8.30.010 Definitions. 8.30.015 Business license required. 8.30.020 Exclusion from business license requirement. 8.30.025 Application for a business license. 8.30.030 Renewals. 8.30.035 Suspension or revocation of license. 8.30.040 Appeals. 8.30.045 Prohibited acts. 8.30.050 Penalties. 8.30.055 Disclosure of licensed businesses. 8.30.060 Regulations. 8.30.010 Definitions. As used in this chapter: A. "Applicant" means the person's name that appears on the business license application. B. "Business" includes: 1. all activities or acts, whether personal, professional or corporate, engaged in or caused to be engaged in with the object of financial or pecuniary gain, profit or benefit, either direct or indirect; and 2. following or engaging in a trade, profession or business, including but not limited to receipts from advertising services, rental of personal or real property, construction, processing or manufacturing with the object of financial or pecuniary gain, profit or benefit, either direct or indirect. C. "City clerk" means the city clerk of the city or the designee of the city clerk. D. "City manager" means the city manager of the city or the designee of the city manager. ` E. "Engage in business" means to operate or to conduct a business within the city limits and includes mobile vendors and temporary vendors operating or conducting a business within the city limits for any period of time. H. "Licensee" means the person in whose name a business license is issued. I. "Owner" means all persons having a proprietary interest in the business requiring a license, or, in the case of a corporation, "owner" means all persons holding more than 20 % of the voting stock in the corporation. J. "Person" includes an individual, firm, partnership, joint venture, association, corporation, estate trust, business trust, receiver or any group or combination acting as a unit. (Ord. 94-20) 8.30.015 Business license required. A. No person may engage in a business in the city without first obtaining an annual business license as provided in Section 8.30.025 of this Chapter. B. A separate business license is required for each business. r (c) The business license or approved duplicate license shall be displayed prominently at the site of the business- (d) A business license may not be sold, assigned, transferred or otherwise conveyed. If a person ceases to engage in business or changes the name, nature or business location, the business license expires. (Ord. 94-20) 8.30.020. Exclusion from business license requirement. (a) A person is not required to obtain a business license under this chapter if- (1) Engaged in fishing, unless conducting fish sales to the public from a vessel or providing charter services to the public; (2) Giving or supplying of services as an employee; (3) An individual or a non-profit organization engaged in casual and isolated sales by a seller who does not regularly engage in the business of selling goods or a service and the sales do not occur for more than 14 days in a calendar year. (b) Government and governmental services are not required to obtain a business license under this chapter. (Ord. 94-20) -a)v8.30.025. Application for a business license. (a) A person engaging in a business shall apply to the city clerk for a business license on a form prescribed by the city and shall not open for business until the business license is issued. Renewal license applications must be filed no later than January 31 in each subsequent year, except that a seasonal business operating during the summer season, May 1 to September 30 only, shall file a renewal application no later than April 1 in each subsequent year. (b) Each application shall contain the following information: (1) The legible signature of the applicant; (2) An affirmation or oath as may be required on the application form; and (3) A description of the type and nature of the business. (c) Each application shall be accompanied by: (1) An annual, non-refundable fee of $30.00 per license, provided that the fee per license for an application submitted after the due date shall be $60.00; (2) Proof satisfactory that the applicant has received or applied for a valid state business license when such a license is required by state law; (3) Proof satisfactory that the applicant possesses a valid Kenai Peninsula Borough sales tax license when such license is required by law; J (4) Proof satisfactory that the applicant has received an applicable federal or state occupational license when such license is required by federal and/or state law; (5) Proof satisfactory of any permits as required by any other sections contained in this code; (6) A verification from the city finance department attesting that all accounts for utilities, taxes and assessments are current; (7) Verification from the Kenai Peninsula Borough that all sales and property tax accounts are current. (d) Upon receipt of the application, accompanied by the annual fee, the city clerk shall review the application and may consult with appropriate officials to determine whether the information contained therein is true and complete and otherwise in compliance with this chapter. (e) Upon determining that the business application is in compliance with this chapter, the city clerk shall issue a business license. (fl If the application is denied, the city clerk shall indicate on what grounds the denial is based_ The application fee will not be refunded. (g) If an application is denied, the city clerk may issue a temporary license valid for no more than 14 calendar days to permit the applicant time to reapply. If no application is submitted within the 14 day period, or if the subsequent application is denied, the applicant is in violation of this chapter and must either cease engaging in business or be subject to the penalty provisions contained in this chapter. (Ord. 94-20; Ord. 94-32; Ord. 95-04; Ord. 96-22; Ord. 2002-14; Ord. 2003-03) 8.30.030. Renewals. The city shall treat applications for renewal of licenses in the same manner as an original application. (Ord.94-20) 8.30.035. Suspension or revocation of license. (a) The city clerk may revoke, suspend or otherwise restrict a license required by this chapter for any of the following reasons: (1) That the applicant made a false or misleading statement or representation in connection with the application for a business license; - (2) That the licensee has violated any provision of this chapter or regulations issued hereunder or the terms or conditions of the business license; (3) That the licensee is performing or permitting the performance of an act on the licensed premises or in connection with the licensed business that endangers the public health, morals, safety or welfare; F BUSINESS REGUl.AfiUINz n'"J �""-•^ ' " 10 (4) That the licensee is conducting the business at a location other than that indicated on the current business license; (5) That the licensee has sold, assigned, transferred or otherwise conveyed the business license to another person; or (6) That the licensee knowingly or willfully permits, allows, directs or otherwise sanctions the violation of any provision of this code or city regulations. (b) Except as provided by subsection (c) below, no decision of the city clerk to revoke, suspend or otherwise limit or restrict a business license shall be effective until the licensee is first given a hearing before the city manager. The city clerk shall notify a licensee of his intent to consider revocation, suspension or any other limitation or restriction of a liceense by specifying a date and time for a hearing. At the hearing, all parties may be represented counsel and may offer witnesses and exhibits. At the conclusion of the meeting, theto manager shall issue a written decision within two working days. The licensee may appeal decision to the city council under section 8.30.040. (c) The city clerk may, without prior warning, notice or hearing, suspend or restrict any business license if that action is necessary to eliminate an immediate and substantial danger to the public health, safety or welfare. Such actions shall be effective five days after the certified mailing of written notice to the licensee. The notice shall also set a hearing date to the effective date of a suspension or restriction. take place within five working days following The hearing will be held before the city manager. All parties may be represented by counsel and may offer witnesses and exhibits at the hearing. At the conclusion of the hearing, the city manager shall issue his final written decision within two working days. The licensee may appeal the decision to the city council under section 8.30.040. (Ord. 94-20) 8.30.040. Appeals. (a) The following may appeal an adverse decision of the city manager to the city council: (1) Any person denied a business license; (2) Any licensee whose business license has been suspended or revoked- (b) The appellant shall file a written notice of appeal with the city clerk within 30 days from the date of the city manager's adverse decision regarding a business license. The notice shall specify all of the grounds for such appeal with supporting documents of the applicant's position attached. (c) After the appeal has been filed, the city manager will forward his written decision to the city council outlining the reasons supporting the adverse action. The memorandum will be made available for inspection and copying. (d) The city clerk shall assign a date for the hearing with written notice sent to the appellant and the city council. J (e) At the hearing, all parties may be represented by counsel and may offer witnesses and exhibits. The burden of proof rests with the appellant- (f) Within 30 days following the conclusion of the hearing, the city council shall issue written findings of facts and conclusions of law and clearly state the grounds upon which the decision is based. The appellant may appeal a decision of the city council to the superior court within 30 days in accordance with the Rules of Appellate Procedure of the State of Alaska. (Ord. 94-20) 8.30.045. Prohibited acts. (a) It is unlawful for any person to engage in a business without first receiving the license as directed in section 8.30.025, subsection A- (b) It is unlawful for any person to obtain or attempt to obtain a license by making a false statement in the application or by other fraudulent or deceptive means. (c) It is unlawful for any person to forge, counterfeit or fraudulently alter a license. (Ord. 94-20) 8.30.050. Penalties. (a) If a person is required to have a business license under this chapter but fails to do so, the city may recover in an action at law against that person all current and past business license fees due and owing along with all reasonable attorney's fees and costs incurred by the city in recovering the business license fees owed. (b) A person who fails to obtain a business license required by this chapter, or violates any other provision of this chapter, shall also be subject to the civil remedies provided in section 1.05.010. (c) The city may not pursue any action at law against a person when an appeal from an adverse action is pending. (Ord. 94-20; Ord. 94-32) 8.30.055. Disclosure of licensed businesses. A list of all licensed businesses in the city will be made available to the borough and state for review and compliance of businesses with borough and state standards. (Ord. 94-20) 8.30.060. Regulations. The city clerk may adopt regulations applying and interpreting this chapter and may prescribe forms required for the administration of this chapter. (Ord. 94-20) It 1.05.010 General penalty; continuing violations. 1.05.015 Aiding or abetting violations. 1.05.020 Violations of state law. 1.05.010 General penalty; continuing violations. A. Whenever in this code or any other ordinance or resolution, any rule, regulation or order -duly promulgated- by -any- officer or -agency of -the -city any -act is prohibited -or is declared to be unlawful or an offense or a misdemeanor, or the doing of any act is required or the failure to do any act is declared to be unlawful or an offense or a misdemeanor, where no specific penalty is provided therefor, the violation of any such provision of such code or any other ordinance or resolution or such rule, regulation or order shall be punished by a fine not exceeding three hundred dollars ($300.00). B. The city or an aggrieved person may institute a civil action against a person who violates a provision of this code or any other ordinance or resolution, or any rule, regulation or order duly promulgated by any officer or agency of the city. In addition to injunctive and compensatory relief, a civil penalty not to exceed $1,000 may be imposed for each violation. An action to enjoin a violation may be brought notwithstanding the availability of any other remedy. On application for injunctive relief and a finding of a violation or a threatened violation, the superior court shall grant the injunction. C. Except where otherwise provided, every day any violation of this code or any other ordinance or resolution or rule, regulation or order shall continue shall constitute a separate offense. D. The penalties provided by this section shall, unless another penalty is expressly provided, apply to the amendments of any section of this code, whether or not such penalties are re-enacted in the amendatory ordinance. (1960 Code, § 8; Ord. 378; Ord. 94-32) 1.05.015 Aiding or abetting violations. The prohibition of any act in this code or any other ordinance, and in any rule or regulation adopted hereunder, shall include the causing, securing, aiding or abetting of another person to do such act. (1960 Code, § 11) 3 See Charter Sec. 1.9 as to penalties for violations-, see Chapter 5.40 of this code for penalties for failure to pay visitor assessment fees; see Chapter 8.30 of this code for penalties for failure to obtain a city business license; see Title 11 of this code for penalties, arrests and convictions for violations of traffic regulations; see Chapter 15.10 of this code for penalties for failure to pay parking assessments; see AS 29.35.010(7) for authority to prescribe penalties for municipal ordinance violations. 97- ,p H DC'vxi IN THE DISTRICT COURT FOR THE STATE OF THIRD JUDICIAL DISTRICT AT K OP rhs q �c c°L� KENAI PENINSULA BOROUGH, )r" a Municipal Corporation, ) Plaintiff, r*f-M NAMES L. CORK AND ULTIMATE TOURS LLC D/B/A GODWIN GLACIER DOG SLED TOURS, Defendants Case No. 3KN-06c2&� CI COMPLAINT FOR SATES TAXES COMES NOW the Plaintiff by its attorney and states and alleges as follows: 1. Plaintiff is a borough empowered by AS 29.45.650 to collect sales and use taxes levied by the Kenai Peninsula Borough and cities within the borough. 2. Defendants were owners of a business, GODWIN GLACIER DOG SLED TOURS, engaged in the sale of goods and/or x o. services within the city of Seward during the period of time Ow relevant to this complaint. N 3. The Assembly of the Kenai Peninsula Borough has by ordinances contained in the Code of Ordinances, Chapter 5.18, zsection 100, levied a consumers sales tax an all retail sales, on z do all rents, and on all services made or rendered within the F borough, except when exempted. OHO Z v A 4. The cities of Homer, Kenai, Seldovia, Seward and L� O Soldotna have levied a consumers sales tax within their boundaries 0 S. Defendant Ultimate Tours LLC has engaged in the nonexempt sale of goods, nonexempt sale or exchange of services, or the use or title in property within the borough, but has failed or refused to remit all sales taxes due. 6. Plaintiff notified Defendant by correspondence dated January 19, 2005, March 8, 2005, August 4, 2005, September 26, 2005, October 31, 2005, December 9, 2005, and January 6, 2006, advising of the obligation to remit sales taxes to the Borough. 7. Defendant James L. Cork was the president and managing member of Ultimate Tours LLC during all sales tax reporting periods mentioned herein for which sales taxes are due and unpaid by the corporation. 8. KPB 5.18.130(D) provides that the president and any officer of a corporation having control of, supervision of, or charged with the responsibility of filing sales tax returns is personally liable for any unpaid corporate sales taxes, penalties, interest, fees and costs accruing and unpaid to the borough. 9. Defendants jointly and severally owe Plaintiff the amount of $33,983.80 for past due sales taxes, penalties and fees, pursuant to KPB 5.18.100, KPB 5.18.670 and KPB 5.18.620 for the quarterly reporting period ending September 30, 2004, and the monthly reporting periods of June 2005 through and including October 2005, plus prejudgment interest in accordance with KPB 5.18.620(B), AS 45.45.010 and AS 29.45.650(d). At the time of filing this complaint, the taxes, penalties, fees and interest owed total $36,673.71. Interest continues to accrue at the rate of 15% per. annum_ In accordance with KPB 5.18.620(B), penalties continue to accrue at the rate of 5% per month to a maximum of 25t for each reporting period. if Defendants fails to remit any amounts due, the amount due for tax, penalty and fees will increase on the first day of April 2006 to $34,075.90, WHEREFORE, Plaintiff prays: 1_ For joint and several judgment in the amount of $34,075.90 for past due sales taxes, penalties and fees, plus an additional sum for accrued pre -judgment interest; and 2. For judgment in the amount of any and all sales taxes and penalties due but not remitted on or before date of judgment in this action; and 3. For costs, interest and attorney fees; and 4. For such other relief as this court may deem just and proper. Dated this ZS day of March, 2006. KENAI PENINSULA BOROUGH Amy"Fenske Assistant Borough Attorney Alaska Bar No. 0206023 City of Seward, Alaska Office of the. City Clerk PO Box 167 410 Adams Street Seward, AK 99664 Telephone:907-224-4046 Fax: 907-224-4038 Check in the amount of $30 (Non-refundable annual fee) Copy of State Business License (or proof that you have filed) Copy of Borough Sales Tax Registration Card (or Registration No. vi Copy of any required occupational licenses r city business license will be issued within one week of the date the City Clerk has verified the has received proof that all of your tax and other accounts with the City and the Kenai Per )ugh are current. Annual renewals are due January 31 & Seasonal (May 1-Sept. 30) are due A� Sign your application and return it to the address at left along with the followingrequired items: If your business license application is submitted between January I and September 30 of any calendar year, your license will be issued for the remainder of that calendar year. If your application is submi#ed between October I and December 31, the license will be issued for the remaining period of the year in which you applied aind for.all of the following calendar year. This does not apply to renewal Legal Name of Business Entity: VI 4 tyv� t� Y ?-- G I Y� � -LC Date: `S - 12 - Mailing Address for LICLNSE & RENEWAL. r City: iC'1,y 4 t-J State: N L Zip: `1 `l - )Lr� Telephone: yfi ]-2_7 q4Z Zoning Limitations — A business license does not authorize the holder to conduct business in violation of any zoning ordinance. The location of your business should be indicated below-. If a person ceases to engage in business or changes the name, nature or business location, the business license expires. You must list a physical address (a post office box or mail drop is not considered a physical address). 7 Physical Business Location in Seward: A 1 Y p y V k Nature of business: ❑Retail ❑Wholesale [ATour Operator ❑Transportation ❑Communication Services ❑Professional Services ❑Charter ❑Automotive ❑Construction ❑Childcare ❑B&B/Lodging ❑Engineering ❑Educational ❑Fourth ofJplyNV€ndo ❑ Social Security Number of one owner or Business Owner Name(s): I )CA U^ Business is: ❑ 0 Identification No.: Sole Proprietorship (one individual owner) Partnership (All partner's names must be listed above or attached) Corporation (List corporate officer's names and o Nonprofit LLC (Limited Liability Corporation) CORPO TE OFFICERS President: J�1wy? f2 0p1rK Vice President: Secretary: t v �y FOR OFFICE USE ONLY Paid: Cash/Check No. Data Entry Notice Sent: Accts. Verified; Zoning District Use Allowed? Note: Issued: License #: Expires: Rarr iupri date R initials)' As Applicant, I e " 64 certify or declare under penalty of perjury under the laws of the State ofAlaskd that the fore %Ding`ts true and correct. 1 n t i d _ 1C Signature Printed Name Title Date m� i Sent: Thursday, May 18, 2006 1 U:UU ANi To: Johanna Dollerhide Subject: RE: Ultimate Tours, LLC dba Glacier Godwin Dog Sled Tours not in compliance ----O-iginal Message ----- From: Johanna Dollerhide[mailto.jdollerhide@cityofseward.net] Sent: Wednesday, May 17, 2006 11:13 AM To: Wood, Laurie; Angela Buck; Kari Atwood; Kim Kowalski -Rogers Subject: Ultimate Tours, LLC dba Glacier Godwin Dog Sled Tours Importance: High Hi, Can you tell me if ULTIMATE TOURS, LLC DBA GLACIER GODWIN DOG SLED TOURS, (president James Cork), 36499, is compliant with your department' Thanks, Johanna L. Dollerhide Assistant City Clerk City of Seward, Alaska Phone: (.907) 224-4046 Fax: (907) 224-4038 jdollerhidc@city,ofse�eard.net 3LF!-AXU, A ASKA 99664-0167 ' ` & City Clerk ('907) 224-4046 S Engineering (907) 224-4049 0 Utilities (907) 224405% @ Fa.- (907) 224-4038 5/22/2006 Ultimate Tours; LL C dba Godwin Glacier Dogsled Tours PO Box 2711 Seward, Alaska 99664 NOTIFICATIO: OF INCOMPLETE NEW BUSD4ESS LICENSE APPLICATION Thank you for submitting your application for a -business license and payment fora business license. Please be advised that a business is required to obtain a business license if any work is physically performed within the city w limits. Examples are: delivery of goods inside the city, field ork Performed inside the city, marketing or sales inside the city, rental oT property and the actual conduct of a business within the city limits. During processing, it was discovered that the following item is not current or has not been applied for. Zi veriiacatiou from the Kenai Peninsula Borougf, that all sales and- property tab accounts are current; Because this item has not been provided to the City- Clerk's office, your application for a City Of Seward business license has been denied because you failed to comply with the application requirements outlined in Seward City Code Section S830.025. When you have complied with the above -mentioned requirement(s) you may re-ap-ply and Provide the necessary proof as required by law. Please be advised that th•.- City Clerk may publish a list of all non -compliant businesses in the Seward Phoenix Log. If you wish to appeal this decision, in accordance with Seward City Code Section 38.30.35B, you are entitled to a hearing before the City Manager. This hearing will take place: l'ay 25, 2006 at City Council Chainbeas with the city manager at ?0:00 a.m. At this hearing, all parties may be represented by counsel and offer witnesses and e,hib ts. Operating a business in Seward is prohibited without a current annual business license. The Cif. may seek civil remedies through Superior Court. In addition to injunctive relief, you may be required to pay any past fees owed, civil penalties not to exceed 51,000.00 per day, plus all attorney fees and costs incurred by the City to pursue this action. These penalties are outlined in Sections 38.30.050 and §1.05.010 (b) of the Seward City Code. You may find the code on line at tiv.xl� .municode.com. Regards; i Johanna Do1_ierhide Assistant City Clerk - Cc: City Manager City Attorney P.O. Box 167 Seward, Alaska 99664 ccorbridge@cityofseward.net 3 elept iui ie. �zyv 1 1 ---r Facsimile: (907) 224-4038 May 31, 2006 James Cork, President Ultimate Tours, LLC, dba Godwin Glacier Dogsled Tours P.O. Box 2711 Seward, Alaska 99664 RE: Decision letter concerning business license Dear Mr. Cork Thank you for attending the hearing in this matter which was held on May 26, 2006, at 9:00 a.m. in the conference room at City Hall. My records show that Ultimate Tours, LLC, was represented in that hearing by you and Diana Chavez. The City was represented by Jean Lewis, City Clerk, and me. Both you and Ms. Chavez were given an opportunity to present evidence. Both of you were sworn and both of you did testify. You had the opportunity to provide documentary evidence up through the close of business on Friday, May 26, 2006. The City Clerk was also given an opportunity to speak. As part of my decision - making process, I have examined the City Clerk's files in this matter and material received from the Kenai Peninsula Borough regarding this matter. I have considered the totality of the information available to me at this time, in making my decision concerning this business license. Glacier Dogsled Tours. No other issue was raised by any other party, either during the May 26, 2006, hearing or subsequently. B. The applicable provisions of the Seward City Code are; 1. Section 8.30.035(a), which provides that "The city clerk may revoke, suspend or otherwise restrict a license required by this chapter for any of the following reasons:... (2) That the licensee has violated any provision of this chapter or regulations issued hereunder or the terms or conditions of the business license ..." 2. Section 8.30.025(c)(7), which requires that "Each application [for a business license] shall be accompanied by:... (7) Verification from the Kenai Peninsula Borough that all sales and property tax accounts are current.'' C. My analysis is as follows: 1. Regarding Ultimate Tours' disparate treatment allegations. a. Ultimate Tours, LLC, is a Part 135 operator, as defined and licensed by the Federal Aviation Administration. By his own testimony, Mr. Cork is the one and only principal in the LLC. b. When ERA Aviation (also a Part 135 operator) did business in Seward several years ago, Mr. Cork's testimony indicated ERA did not pay taxes to the Borough or the City. I have received no documentary evidence verifying that contention. C. Absent such documentary evidence, I can not conclude that Ultimate Tours, LLC, has been subject to disparate treatment by the City of Seward. 2. Regarding Ultimate Tours' argument that all accounts are current, that the Kenai Peninsula Borough (the Borough) has, according to taxes to the Borough or the City. a. Documented facts. A letter dated May 26, 2006, from Cheryl Smith, Legal Assistant for the Kenai Peninsula Borough, says in pertinent part: " there are two (2) tax accounts that are currently delinquent. One is a sales tax account, the other is a leasehold tax account." II. Regarding the sales tax account, "At this point, service of the summons and complaint' has been accomplished on one of the two defendants named in the complaint. A response to the borough's complaint has not been received and there are no agreements pending to postpone this action." III. Regarding the leasehold tax account, `This account first became delinquent on October 16, 2004. Mr. Cork, through his attorney, has filed an appeal to the KPB Board of Equalization (BOE) regarding the assessment of these taxes... The BOE hearing on the appeal has been postponed to at least July 2006 and, to the best of my knowledge, the exact date has not been set. Further action on this account is pending the outcome of the BOE hearing." ' The Complaint for Sales Taxes is captioned Kenai Peninsula Borough, a Municipal Corporation, Plaintiff, vs. James L. Cork and Ultimate Tours LL C d/b/a Godwin Glacier Doa Sled Tours, Defendants, Case No, 3KN-06-269 Cl. Given the written material provided by Ms 5mnn, i cuilumuc that Ultimate Tours, LLC, is not current in its accounts with the KPB. 4. Application of the City Code to those facts. a. Recall that, as cited above, Seward City Code Section 8.30.025(c)(7) requires that as part of the application process, "Each application shall be accompanied by ... (7) Verification from the Kenai Peninsula Borough that all sales and property tax accounts are current." b. The letter from Ms. Smith makes it clear that Ultimate Tours, LLC, has not and can not provide to the City verification that all sales and property taxes owed to the KPB are current. In fact, the Borough has sued Ultimate Tours, LLC, to recover taxes which the Borough alleges have not been paid. C. Had the City Clerk issued a business license to Ultimate Tours, LLC, for the 2006 year, the Clerk would be required by Code Section 8.30.035(a) to "revoke, suspend or otherwise restrict" that license. D. Conclusion and recommendations 1. Based on the information I have received to date, strict application of the plain language of the Seward City Code requires the City to deny a business license to Ultimate Tours, LLC. a. Ultimate Tours, LLC, has not provided verification that all sales and property taxes owed to the KPB are current. b. I have found no provision of the City Code requiring or allowing the City to issue a business license contrary to other provisions of the City Code, pending the outcome of litigation. to do business pending the outcome of litigation. 2. However, there may be an alternative to denying a business license to Ultimate Tours, LLC. Such an alternative is desirable, because denial would not foster the best interests of the City or of Ultimate Tours, LLC. a. Time is of the essence in this matter. If Ultimate Tours, LLC, wants to avail itself of an option described in (3) immediately below (as distinct from the appeal option described in Section (E)), your response must be delivered to the City Clerk no later than 12:00 Noon on Monday, June 5, 2006. 3. In order to resolve this situation short of a flat denial of Ultimate's application for a business license, I propose that the City and Ultimate Tours, LLC, enter into an agreement containing provisions protecting both entities, including: a. A bond for thirty thousand dollars ($30,000.00) to be obtained by Ultimate Tours, LLC, and payable to the City, as surety guaranteeing that the City will be paid all tax it is owed by Ultimate Tours, LLC, for 2006 and for prior years, in the event the court decision in the pending litigation cited above determines that Ultimate Tours, LLC, is required by law to pay those taxes which are the subject of the Complaint for Sales Taxes filed by the Borough. b. A legal obligation on the part of Ultimate Tours, LLC, memorialized in a document in which Ultimate Tours, LLC, agrees that in the event the court decision determines that Ultimate Tours, LLC, is required by law to pay those taxes, within ten (10) days of the date that decision' is issued, 2 This is intended to apply only to the current litigation as cited above. The time involved is not intended to apply to any appeals which may be filed by any party. As above, this is intended to apply only to the current litigation as cited above. The time involved is not intended to include appeals filed by any party. C. In return, the City agrees to issue a business license for the 2006 season, to Ultimate Tours, LLC, within five (5) business days of the date the document memorializing this agreement is signed. d. Ultimate Tours LLC, may implement its part of this recommendation either by: Obtaining the bond described in (a) above and presenting it to the City, together with Ultimate Tours' draft of an agreement as described in (b) above [in which case the City reserves the right to negotiate the terms of Ultimate's draft agreement]; or ii. Obtaining the bond described in (a) above and giving written notice to the City that it wishes the City to draft an agreement as described in (b) above. iii. In either event, there shall be no obligation on the City's part to issue a business license to Ultimate Tours, LLC, until such time as Ultimate has complied with (c)(i) or (c)(ii) above, a reasonable amount of time has elapsed for the City to draft and negotiate a mutually acceptable agreement and both the City and Ultimate have signed the agreement. E. Notice of right to appeal. 1. If Ultimate Tours, LLC, chooses not to pursue either of the alternative resolutions proposed above, you may appeal this decision to the City Council under section 8.30.040 of the Seward City Code, which is appended hereto. date of this decision letter. If the City Clerk does not receive sucn a written notice within that time frame, Ultimate Tours, LLC, will lose its right to appeal. I hope to work with you to craft a solution in keeping with (D)(3) above. Please keep me informed of your wishes in this regard. Sincerely Clark Corbridge City Manager enclosure: Section 8.30.040 of the Seward City Code copies: Jean Lewis, City Clerk Kirsten Vesel, Assistant City Manager W.C. Casey, Public Works P.O. Box 2711, Seward, Aim 99664 inn(907`0_-2_ 91%i non-n"9 ttfree NAN bGJt (907)224-2398 fax infona alaskad -9a1ed.com www. alaskadogsled. com June 1.2006 City of Seward P.O. Box 167 Seward, AK. 99664-0167 RE: 2006 Business License Application for Ultimate Tours Dear Mr. Corbridge: C :s It has come to our attention that Scenic Mountain Air, our next door neighbor, currently holds a valid City of Seward, 2006 business license. In speaking with them yesterday, we were told personally that they are not paying sales tax nor have they ever paid sales tax to the City of Seward. They do tours and charter work exactly like we do. They continue to operate and are not compliant according to your sales tax requirements. I verbally told Jean Lewis, City Clerk, about this on May 31, 2006 and noticed on June I they are continuing to operate. It has also come to our attention from speaking personally with a bridge officer of Holland America over the Memorial weekend that the the cruise lines including Holland America and Celebrity Cruise Lines do not pay sales tax to the City of Seward. They cater to tourists just as we do and operate within Seward city limits. They continue to operate and are not compliant according to your sales tax requirements. Maritime Helicopters, based in Homer, AK. personally told us that they do not not pay sales tax nor have they ever paid sales tax. Again they have the same 135 air carrier status as we do. We have heard of several other businesses in Seward who currently have valid 2006 business licenses with the City of Seward but do not currently pay sales tax nor have they ever paid sales tax to the City of Seward, however we do not have this confirmed at this time but are looking into it. At our meeting with the City of Seward last week on Wednesday May 24"', we were told by Jean Lewis the City Clerk that she had personal knowledge that most every business in Seward is up 111�A IviJ. LV Yl1J 114 with their sales tax. It is apparent to us that many businesses in town are operating with valid 2006 business licenses but not in compliance with your sales tax obligation, contrary to what Ms. Lewis stated. This leads us to believe that selective enforcement is in place. More importantly sounds like DISCRIMINATION to us as you are allowing many businesses just like us to continue to operate knowing they are not paying sales tax, yet you are trying to stop us from operating knowing there is a possibility we are exempt from paying sales tax_ Contrary to Mr. Corbridge's statement in the denial of our business license this does subject Ultimate Tours, L.L_C, to disparate treatment by the City of Seward. Mr. Corbridge states in his denial of our application that the City of Seward strictly applies the Seward City Code in regards to business licenses. Yet the abovementioned examples appear to discredit that statement too. Rest assured we will certainly use this information in the lawsuit we are planning against the City of Seward. We will also subpoena the City of Seward's records indicating whether or not each and every business in the City of Seward that holds a valid 2006 business license is current on their sales tax obligations_ You are hereby put on notice we intend to appeal the denial of our 2006 business license. We are requesting an emergency meeting of the city council as our season has started, every day we are losing business and time is of the essence. Sincerely, Diana Chavez Godwin Glacier Dog Sled tours ` cc Jean Lewis �IIL/ ILI t� t 116-1 11 cL CIA- Sent: Thursday, June 01, zuub U:ll AM To: Wood, Laurie; Johanna Dollerhide Subject: RE: Tax exempt question Johanna, Neither Scenic Mountain Air or Maritime Helicopters are exempt from the collection of sales tax in the KPB. This said, both businesses may have exempt sales as they relate to KPB 5.18.200(A)(11) "Sale of passenger seat tickets by a commercial airline, air charter and air taxi sales are exempt" This would be different for Ultimate Tours sales if their sales are based on marine travel, etc. because there is no exemption for marine charters, sightseeing, etc. Hope this helps. Thanks Troy ----Original Message ----- From: Johanna Dollerhide [mailto jdollerhide@cityofseward.net] Sent: Thursday, June 01, 2006 8:57 AM To: Wood, Laurie Subject: YW: Tax exempt question Importance: High Laurie, Can you please forward this to Troy? The email address I have for him doesn't seem to be working for me (and if you have any insight or answers regarding the email, feel free to let me know!). Thanks, Johanna -----Original Message ----- From: Johanna Dollerhide Sent: Thursday, June 01, 2006 8:40 AM To: ttankersley@borough.kenai.ak.us Subject: Tax exempt question Importance: High Hi Troy, Is Scenic Mountain Air, 150183, tax exempt? And if they are, what kind of business do they do that makes them exempt? Ultimate Tours is saying Scenic does the same thing as they do, but have tax exempt status, and r • ____a ;r, f n .,.,,, WP nkn had A nnestiun about "Maritime Helicopters" out of Homer City of Seward, Alaska Phone: (907) 224-4046 Fax: (907) 224-4038 jdollerhide@cityofseward.net