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Kenai Peninsula officials weigh effects of cruise fee suit

December 25, 2018

KENAI, Alaska (AP) — Officials on the Kenai Peninsula are examining what effects port cities might see from a federal court decision on the use of cruise ship passenger fees.

U.S. District Court Judge H. Russel Holland ruled earlier this month that Juneau can keep collecting the fees, but their use must benefit the cruise ships, the Peninsula Clarion reported this week.

“Passenger benefits are not relevant,” the judge wrote in the ruling. “The proper question as to each category of expenditure by the City and Borough of Juneau is: Does the expenditure provide a service to a vessel? If the answer is yes, the expenditure is constitutional.”

The ruling will tighten up restrictions and could affect Seward’s summer shuttle bus, said Will Earnhart, Seward city attorney.

“We’ve got the shuttle going to the cruise ship dock when the ships are there and that’s its primary purpose,” Earnhart said. “My reading of the case is that it’s probably OK, but that is a vast grey area. It depends on how incidental it is to the cruise ships or not.”

Seward receives funding from the commercial passenger vessel excise tax. The $5 passenger fee is split between the city and Kenai Peninsula Borough. The borough’s portion of the fee is made available to Seward and Homer through grants. The city received $458,165 from the shared revenue distribution this year.

Seward uses the revenue for port and harbor infrastructure projects and passenger services, the city said.

Plans for future projects include ambulance services to cruise ships, safety and aesthetic improvements to the cruise ship pedestrian walkway, continued port and harbor infrastructure improvements, and cruise terminal amenities, the city said.

How the city’s use of that revenue will be affected is still to be determined, Earnhart said.

“The nice thing is, we’re probably not the main target,” Earnhart said, noting Seward doesn’t get as many cruise ships as other cities.

Juneau officials have not announced if they will appeal the court decision.

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Information from: (Kenai, Alaska) Peninsula Clarion, http://www.peninsulaclarion.com

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