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CLIA Alaska, Juneau amicably settle long-running lawsuit

Juneau
Juneau and CLIA Alaska agreed to meet annually to discuss any new proposed projects and services that may be funded with passenger fees PHOTO: City and Borough of Juneau
Juneau and Cruise Lines International Association Alaska have reached an agreement that will end long-running litigation over how a $5 head tax and $3 per passenger port development fee are spent.

A 'great solution' for all parties

'This agreement is a great solution for CLIA, [the city and borough of Juneau], cruise ship passengers and all Alaskan port communities,' city manager Rorie Watt said. 'I’m so happy to move beyond litigation and get back to the collaborative work of growing and supporting our economic development.'

Watt said the agreement 'solves the underlying tension between Juneau’s need to exercise local control and CLIA’s need to have predictable applications of the law and implementations of fee and tax policy that don’t create unintended consequences.' He added: 'My only regret is that the parties didn’t find this practical solution sooner.'

CLIA Alaska welcomes the settlement

'We're very pleased with the settlement,' CLIA Alaska president John Binkley told Seatrade Cruise News, expressing appreciation for the 'considerable efforts' by the mayor, assembly and city manager toward 'what is a very positive outcome.

'The agreement achieves our goal of providing certainty and predictability of how passenger fees will be utilized going forward, while still supporting services to our guests and the local community,' Binkley continued.

'Working together allows for continued positive economic benefits to Juneau in a manner that sustains the quality of life for residents and provides a great experience in a world-class destination.'

How the fees may be used

Under the agreement, Juneau will use passenger fees to continue providing cruise-related services and infrastructure including restrooms, signage/wayfinding, motor coach staging, crossing guards, fire and emergency medical service and police patrols. There will be no change to practices in the port area.

Juneau also will use passenger fees to fund up to 75% ($9.3m) of the $12.4m Statter Harbor project. The remainder of the project costs will come from local sources.

Legal expenses for both parties will be reimbursed from the fees.

Juneau also will continue to develop the downtown waterfront in accordance with its Long-Range Waterfront Plan.

No fee hike for three years

Passenger fees will not increase for the next three years.

Juneau and CLIA Alaska also agreed to meet annually to discuss any new proposed projects and services that may be funded with passenger fees. Moving forward, the city and borough and CLIA agree to settle future disagreements through discussion or mediation before resorting to litigation.

CLIA filed suit in 2016, alleging Juneau was unconstitutionally collecting and spending fees from cruise ship passengers—charges the city and borough denied.

Settlement follows December court ruling

In December, a US District Court ruled in a summary judgment that it’s constitutional for a city to collect such fees. However, under the Tonnage Clause, that revenue must go to services provided directly to a vessel, not to the passengers.

The ruling left CLIA Alaska and Juneau to come together and figure out how to agree on a future process without the need to create new legislation.

'Litigation was hard on everyone, but we all suffered enough to fully appreciate the value of a strong working relationship,' Watt said. 'I especially applaud CLIA’s willingness to step up, acknowledge community impacts and be a partner in the provision of necessary services and infrastructure.'

The agreement is scheduled to be adopted at a special assembly meeting on Friday in Juneau.

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