HomeMy WebLinkAboutRes2017-005 Sponsored by: Hunt
CITY OF SEWARD,ALASKA
RESOLUTION 2017-005
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, ADOPTING AN ALTERNATIVE ALLOCATION METHOD
FOR THE FY2017 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 FY2017 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 2015 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 FY2017 funding available within the FMA 14: Cook
Inlet Fisheries Management Area, in agreement with all other municipalities in the area
participating in the FY2017 Shared Fisheries Business Tax Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SEWARD,ALASKA,that:
Section 1. By this resolution the Council certifies that the City of Seward did experience
significant effects during calendar year 2015 from fisheries business activities that occurred
within the Cook Inlet fisheries management area, and seeks to apply for funding under the
FY2017 Shared Fisheries Business Tax Program.
CITY OF SEWARD, ALASKA
RESOLUTION 2017-005
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 its adoption.
PASSED AND APPROVED by the City Council of the City of Seward,Alaska,this 23rd
day of January, 2017.
THE CITY OF SEWARD,ALASKA
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,-Jan Bardarson, Mayor
AYES: Keil, McClure, Squires,Altermatt, Slater, Bardarson
NOES: None
ABSENT: Casagranda
ABSTAIN: None
ATTEST:
dGtC�- rnna Kinn , CMC
• Clerk
(City Seal)
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AGENDA STATEMENT
Meeting Date: January 23, 2017
Through: James Hunt, City Manager
From: Kristin Erchinger, Finance Director
Agenda Item: 2017 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 24th year of this program, and municipalities across the state will share tax revenues from 2015
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 Anchorage, Homer, Kenai,
Kenai Peninsula Borough, Kachemak, Seldovia, Soldotna, and Seward. The State’s FY2017 Shared
Fisheries Business Tax Program allocation to be shared within this area has not been reported to the City
as of yet. In the prior year, the allocation amount was $40,240.18, and we would expect the current year’s
figures to be lower than that figure.
In fisheries management areas where the program allocation is greater than $4,000 multiplied by the
number of municipalities in the area, program regulations provide for a “long-form” application. In the
Cook Inlet Fisheries Management Area, the threshold value is $32,000 (8 municipalities x $4,000). The
final deadline for submitting application for the FY2017 Shared Fisheries Business Tax and Landing Tax
Program is February 15, 2017.
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 2015. 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 fifteenth
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.
Yes No N/A
CONSISTENCY CHECKLIST:
1. Comprehensive Plan (document source here): X
2. Strategic Plan (document source here): X
3. Other (list): X
ATTORNEY REVIEW: _____Yes __X___No
FISCAL NOTE:
Using this same allocation method, in 2016 Seward expected to receive approximately 6.6% or $2,662.42
of the total available $40,240.18 in Shared Fisheries Business Tax Allocation, and $32.53 of the total
available $491.64 in Landing Tax Allocation, and actual collections were $2,707. A similar amount could
be received in 2017, but preliminary figures have yet to be released from the State of Alaska.
Approved by Finance Department: __________________________
RECOMMENDATION:
Council approve Resolution 2017- adopting an alternative method for the FY2017 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.