Legality of port fee hike questioned

City plans to use money to pay off bonds for Steamship Wharf, Marine Park Plaza

Posted: Thursday, February 10, 2005

A private dock manager and cruise ship officials are challenging the legality of the Juneau Assembly's proposed port development fee increase.

The Assembly is seeking to increase the city's fee in 2005 from 18 cents to $1.18 per arriving passenger per day at a private dock and from $2 to $3.18 at a public dock. By 2007, both fees would jump to $3.

The city plans to use the money to pay off the revenue bonds used to build the Steamship Wharf and Marine Park Plaza and some projects in the Long-range Waterfront Plan. The $1 increase would generate $900,000 in 2005 and $950,000 in 2006.

James Reeves, manager of the Franklin Dock, said the fee increase would violate a clause in the U.S. Constitution.

"The Tonnage Clause of the United States Constitution provides that no state shall, without the consent of Congress, lay any duty of tonnage," Reeves said in a memo to colleagues at Franklin Dock Enterprises.

Reeves submitted the memo to the city right before the Assembly Committee of the Whole meeting Wednesday evening.

In it, Reeves said that the proposed ordinance doesn't assure that the projects in the Long-range Waterfront Plan would directly and proportionately benefit the vessels subject to the increase. He said the fee would be paid by the owner or agent of the vessel, not the passenger.

"This directly impacts the cruise ship industry and ultimately impacts the dock owners as well," Reeves said.

Kirby Day, director of shore operations for Princess Cruises and Tours, said arbitrarily raising the fee is a departure from the way the industry used to conduct business with the city.

"For the Marine Park expansion, we sat down with the city and we came up with a project that was agreed by both parties. That is where the current port development fee is from," Day said. "This is a lot different. There is no specific project they are talking (about)."

Day said the city should fund waterfront projects with the $4.5 million it makes annually by charging a $5 head tax per cruise ship passenger.

City Attorney John Hartle said he would revise the ordinance to state clearly the ordinance follows the federal law. He would prepare a memo responding to the challenge and report to the Assembly March 14, when the Assembly will hold a public hearing on the fee increase.

Worried about the legal issues, Assembly members Randy Wanamaker and Johan Dybdahl voted against forwarding the ordinance to the Assembly, while the rest of the Assembly members voted for it.

The port development fee doesn't apply to vessels having accommodations for 12 or fewer passengers, noncommercial or government vessels and vessels operated by federally recognized Indian tribes.

• I-Chun Che can be reached at ichun.che@juneauempire.com.



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