Questions had been raised about the implications of a federal judge’s ruling in December that the city could continue collecting the passenger taxes but the money should be spent in a way that serves the cruise ships. (AP Photo/Becky Bohrer, File)

Tentative deal reached in dispute over Alaska cruise passenger fees

The passenger head tax won’t increase for at least three years

A tentative agreement has been reached in a legal dispute over how the City and Borough of Juneau spends money collected from cruise ship passenger fees.

City Manager Rorie Watt said the agreement allows continued use of the fees by the city but with more input from a cruise industry association that sued the city in 2016, alleging misuse of funds.

Questions had been raised about the implications of a federal judge’s ruling in December that the city could continue collecting the passenger taxes but the money should be spent in a way that serves the cruise ships.

John Binkley, president of Cruise Lines International Association Alaska, the group that sued, said his organization is pleased with the proposed agreement.

READ MORE: More sailings coming to 10 BC Ferries’ routes

“It certainly achieves our goals, certainty for how the passenger fees are going to be spent in the future. And it also continues to support important services for the guests and also for the community as well,” Binkley said.

KTOO Public Media reported the city has used the passenger head taxes to provide infrastructure and services for the millions of visitors that visit each year.

“The services that we’re going to continue to provide are bathrooms and visitor information and crossing guards and extra police foot patrol and the extra ambulance,” Watt said. “All those things that seem like normal activities to us.”

Under the agreement, the passenger head tax won’t increase for at least three years and both sides will meet yearly to discuss potential projects. The city will pay $1.5 million in legal fees for the cruise organization, the agreement states.

“I think we agree that nobody won and that even though the litigation took a long time and was hard on relationships, we were working on an important question to determine the legality of the expenditure of the fees,” Watt said.

He said the city will pay the association’s attorneys’ fees and the city’s own fees with passenger tax revenue.

The city spent about $800,000 on its legal defence. Watt said about half of that has already been paid with passenger fees.

The local Assembly is expected to adopt terms of the agreement.

The Associated Press

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