The City and Borough of Juneau has reached an agreement with an industry group representing cruise companies over the way it spends money collected from cruise ship passengers.
The tentative agreement brings an end to almost three years of litigation between Cruise Lines International Association Alaska and the city over how it spends passenger fees.
CLIA Alaska filed a lawsuit against the city in 2016 citing $10 million spent constructing a park and seawalk downtown as a misuse of funds.
Last December, a federal judge ruled the city could continue collecting passenger taxes, but the revenue should be spent in a way that serves the cruise ships.
City Manager Rorie Watt said Thursday the agreement ends the debate and allows Juneau to continue using fees the same way it has in the past, but now with more input from CLIA Alaska. The city uses head taxes to provide infrastructure and services for the millions of visitors that visit Juneau 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.”
The agreement with CLIA Alaska states the $8 in fees passengers currently pay will not increase for at least three years, and that both parties will meet annually to discuss proposed projects.
CLIA Alaska President John Binkley said his organization is pleased with the outcome.
“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.
Although the city gets to keep collecting and spending its fees, the agreement also says it will pay $1.5 million to CLIA Alaska for legal fees.
“I think people might look at that and try to divine, you know, who won,” Watt said. “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.”
According to Watt, the city will pay CLIA Alaska’s attorneys’ fees, and its own fees, with passenger fee revenue.
The city spent about $800,000 total on its legal defense. Watt said about half of that has already been paid with those passenger fees.
Per the agreement, CLIA Alaska will not object to the city using passenger fees to pay for planned improvements to Statter Harbor, where many cruise passengers depart on whale watching tours.
Watt said the city has been in constant conversation with CLIA Alaska since the ruling in January. He said he and City Attorney Rob Palmer have kept the Juneau Assembly up to date with developments.
On Monday, the Assembly directed Watt to move forward on accepting the agreement.
The Assembly is expected to adopt the terms next week.
Read the full memorandum of agreement below:
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