Amid warnings, city OKs head tax plan

Industry, residents criticize new ordinance

Posted: Tuesday, January 25, 2000

Panel drops ship impact study

After Deputy Mayor John MacKinnon moved to chop $5,000 off a proposed $25,000 study of the costs the city incurs because of cruise ship passengers, it was downhill from there.

The assembly axed the plan - at least for now.

City Manager Dave Palmer wanted the study to help determine how much of passenger fee revenues could be steered to city departments.

The information gathered from the effort would be used to help determine the amount of fee revenues that could be allocated to city operations and to help defend the city's decisions in court.

But MacKinnon wasn't convinced the project would give the assembly an accurate picture. ``The majority of the (assembly) members were not persuaded that spending the $25,000 was going to buy us anything we couldn't figure out on our own,'' MacKinnon said.

City Attorney John Corso recommended the study as a hedge against litigation by the cruise industry, with results usable to justify expenditures.

``I would much rather proceed to court with one (study) than without one,'' Corso said.

Assembly member Jim Powell expressed concern that the study would get ``only half the job done.''

The study's scope was too limited, he said, and should include not only direct costs to the city, but indirect and incremental costs as well.

``It'll come back,'' Powell said. ``And we can increase the amount (of the appropriation) if we need to.''

Explaining her opposition to the study, assembly member Cathy Munoz proposed the city calculate cruise passenger costs simply by considering the number of cruise passengers in the city and how long they remain, and then calculating a per capita basis how much of the city's $40 million general service expenditures they are liable for.

The study was to have been conducted by Elgee Rehfeld and Funk, LLC, the city's current auditors.

Three months after Juneau residents overwhelmingly approved a cruise ship passenger fee, the Juneau Assembly on Monday night put together the ordinance that in effect charges those passengers a $5 admission fee to the city.

But not without dire warnings from just about everybody.

North West CruiseShip Association President John Hansen said he and other cruise line representatives have been advising the city manager and the city attorney about some of the wording of the ordinance.

Though admitting that his Canadian trade group's participation has been ``awkward,'' Hansen did recommend further changes in the ordinance, including wording that would limit fee revenue expenditure to industry projects.

The cruise industry's participation in shaping the ordinance notwithstanding, Hansen pointedly criticized the measure. ``The fee is unjustified as a matter of policy and suspect as a matter of law,'' he said.

To Douglas resident Margo Waring, industry participation was suspect as a matter of course. Referring to a proposed board that would pass judgment on how to spend the money and which would include two industry representatives, Waring said, ``We don't need a spending board composed of people the majority of whom voted against the fee.''

To a degree, Waring later got her way when the assembly cut one industry representative from the board's makeup and added a second Docks and Harbors Board member. The score? One industry, two Docks and Harbors, and two members of the public.

Assembly member Don Etheridge Jr.'s motion to dump the committee entirely failed when his only support came from Cathy Munoz And Frankie Pillifant.

A previous amendment moved by Tom Garrett to exempt a person who rents a room within 24 hours of an entry into port from the sales and bed taxes for that room was further amended. The measure had been designed as relief for the smaller cruise ships plying the port which are nevertheless too large to qualify for the measure's small-ship exemption. Now, beginning in Nov. 2000, those passengers staying a night and paying a room rental tax will be exempt from paying the passenger fee.

``I think (the ordinance) is a pretty good piece of work,'' Garrett said. ``We've done the best job possible.''

Deputy Mayor John MacKinnon repeated earlier warnings by the city attorney that ``the farther we get from the dock with expenditures,'' the more danger there is of industry litigation. He also cautioned that although there is little case law directing the city, going to court to establish precedent may not be that desirable. ``We could set precedent, but that gets very precedent,'' MacKinnon said.

The assembly may have passed something Monday night that's a compromise for everyone, he said. ``Sometimes that's how it works.''

The ordinance will go into effect Feb. 24.



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