2013-09-11 Joint Work Session Assembly Joint Work Session Packet September 11,2013 Page 2 of 17
CITY COUNCIL — BOROUGH ASSEMBLY
JOINT WORK SESSION AGENDA
Wednesday, September 11, 2013
Assembly Chambers
7:30 p.m.
(Borough Chairing)
Joint work sessions are informal meetings of the Borough Assembly and City Council where elected
officials discuss issues that affect both Borough and City governments and residents. Although
additional items not listed on the joint work session agenda are sometimes discussed when
introduced by elected officials, staff, or members of the public, no formal action is taken at joint work
sessions and items that require formal action are placed on a regular Borough Assembly and/or City
Council meeting agenda. Public comments at work sessions are NOT considered part of the official
record. Public comments intended for the "official record" should be made at a regular Borough
Assembly or City Council meeting.
1. Public Comments
2. Fisheries Analyst Report
a. Discussion of a Community Driven Economic Analysis Sponsored by the City/Borough
Regarding Fishing Industry Proposals Pertaining to Comprehensive GOA Trawl Bycatch
Management
3. City Sales Tax—COI and ACS Charges to Borough Residents
4. Compost Project Update
5. Animal Control Contract with the Borough
Assembly Joint Work Session Packet September 11,2013 Page 3 of 17
Item 3
BIRCH HORTON BITTNER&CHEROT A PROFESSIONAL CORPORATION
112/WEST SEVENTH AVENUE • ANCHORAGE,ALASKA 99501-3301 • TELEPHONE 807278.1550 • FACSIMILE 907.Z76.3680
NAL R.HORTON If Y1.Vitt)
PdLlD4 LERCH.. MN9 K .GROSS ARVIN.LMERES OF CCIMEL 1151 CONIELTWFAVE NW
MIMM H.WW1 TINA N.CRO1ER JAMES N LMOFM JENNIFER C.AMMNNFA OVRE 1100
MiMYNA.SLAG( WIIMN P.HORN' hl➢OFDI I.OWENS.FILM WOAlNTCN.D.C.20114
SUZANNE CREAM STEPHEN K IMGIINGS TOIOf(l J.PLTUMENOS 1ElEPKME 10215t0N0
/CAN W.COOK DYf80.KEW FLGKIN H.RODS. FAC®MA E72551.,027
.04 N.CEV ORE•• THOMAS F.ILLINXNER AARON D.SPERBH.'K
DOUGLAS S.FUIER• DASD E LAMPPi KEMETN E.VASSAR
NAN D.OWNER STANLEY T.IEWO HOLY C.Y.ELS -OC.AND4ANMBM
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ALL CneaA A5D WR
WRITERS DIRECT DIAL 907263.7268•WRITER'S DIRECT FAX 907.276.3680.6einkner@bhb.com
May 18, 2011
VIA ELECTRONIC DELIVERY
Ms. Mary C. Munk
Finance Director
City of Kodiak
710 Mill Bay Road
P. O. Box 1397
Kodiak,AK 99615-1397
RE: Taxation of Internet Sales
Our File No.: 505,786.58 •
•
Dear Mary:
You have asked for advice concerning the application of the sales tax levied by
the City of Kodiak (the "City")to sales of goods that a customer orders over the intemet
from a business located in the City, for delivery in the City. In general, the rules
governing the taxability of sales of goods that are ordered over the intemet are no
different than those governing the application of City sales tax to transactions involving
the ordering of goods by mail or telephone. Below, I have provided a series of
questions and answers to aid in determining whether any transaction that crosses the
boundaries of the City is a taxable sale made in the City, based on the criteria in KCC
3.08.010(c). After the questions and answers, I provide some additional explanation of
how the questions and answers should be applied, analyze the taxability of the specific
transaction that was the subject of your question, and discuss other issues related to
the taxation of sales transacted over the intemet.
1. Analysis of Taxability.
A. Introduction.
The approach described below may be used to determine the taxability of any
sale transaction that crosses the boundaries of the City. The beginning point for
analysis is that the City levies its sales tax on sales;made•within`theCityrl Rules then
1 KCC 3.06.010(b).
Assembly Joint Work Session Packet September 11,2013 Page 4 of 17
BIRCH HORTON BITTNER&CHEROT
A PROFESS/MAL CORPORATION
Ms. Mary C. Munk
May 18, 2011
Page 2
•
determine whether a sale "made,withWthe` "2 Because the City only levies the
tax on sales fmadewithin.the::City"these rulefine the farthest extent to which the
City sales tax may be applied to transactions thatcross;City boundaries. In addition,
the City may not tax transactions whose taxation is prohibited under the constitution or
statutes of the United States or the State of Alaska. This rule also is codified explicitly
as a tax emption.3 Constitutional prohibitions on the taxation of transactions that cross
City boundaries are incorporated in the analysis of the taxability of transactions below.
B. Taxation of Sales.
•
Applying the following sequence of questions will determine whether a sale
transaction that crosses City boundaries is subject to City sales tax.
I •iDelrverviifthe Citjj. Does;deliveryjof the sold item occur in the City?
K•"No The ttransecti n is not taxatiler_O
• Yes—Continue to the next question.
ti • Business Located in the City. Is the sale made by a business located in the City?
• Yes—The transaction is taxable.
• No—Continue to the next question.
I • Place of Business. Agent or Employee in Alaska. Does the seller maintain a
place of business, or an agent or employee, elsewhere in the State of Alaska?
• No—The transaction is not taxable.
• Yes—Continue to the next question.
a • Solicitation inside of the City. Does the seller regularly or repeatedly promote
sales in the City by means such as advertising, promotional events or solicitation
of sales?
• Yes—The transaction is taxable.
• No—The transaction is not taxable.
2. Discussion of Particular Questions Concerning Taxability.
A. Business Located in the City.
A seller of goods or services over the intemet also may maintain a `bricks and
mortar place of business in the City, in which case the seller meets the "business
located in the City criterion for taxability. For example, if ABC Big Box Retailer, Inc.
has a store in the City, and a City resident purchases goods from ABC Big Box Retailer,
2 KCC 3.08.010(c).
3 KCC 3.08.040(o).
Assembly Joint Work Session Packet September 11,2013 Page 5 of 17
BIRCH HORTON BITTNER&CHEROT
A PROFESSIONAL CORPORATION
Ms. Mary C. Munk
May 18, 2011
Page 3
Inc., over the internet, the sale will be subject to City sales tax, even though the internet
order is fulfilled from a location outside the City, and the goods are delivered directly
from that location to the customer.
However, care must be taken to identify the internet seller correctly, because the
Internet seller, although affiliated with the owner of the "bricks-and-mortar° store in the
City, may be a separate corporate entity. In that case, the simple presence of the
"bricks and mortar" store in the City may not be sufficient to justify applying the City's
sales tax to sales by the affiliated internet seller. The presence of the store will justify
applying the City's sales tax to the affiliated intemet seller's transactions only if the
entity that owns the store is shown to be acting as the °agent"of the intemet seller. This
agency relationship could be established by showing that the store accepts returns of
merchandise ordered over the intemet, or provides installation or maintenance services
for merchandise ordered over the internet, or otherwise acts as a local presence for the
Internet seller.
Your specific question concerned a business located in the City that receives
orders over the intemet for goods to be delivered in the City. These sales transactions
clearly are taxable under KCC 3.08.010(c)(1).
B. Solicitation inside of the City.
Under the City Code, a sale is made within the City if there is a delivery in the
City and "the sale is made by a business located outside of the city as a result of
solicitation inside of the city. As thus stated, this rule would apply regardless of
whether a seller has any physical presence in the State of Alaska, such as a place of
business, or an agent or employee. However, case authority establishes clearly that the
commerce clause of the United States Constitution does not permit taxation of an out-
of-state seller that solicits orders in the taxing state through advertising, but that has no
physical presence in the taxing state. In contrast, the solicitation of orders within a
taxing jurisdiction does supply the nexus between the seller and the taxing jurisdiction
that is required for taxation under the less demanding standard of due process.
Meeting the latter standard is sufficient to tax sales within the City by a seller with a
physical presence in the State of Alaska that satisfies the commerce clause, even
though the seller has no physical presence in the City. "The commerce clause of the
United States Constitution poses no bar to local taxation of purely intrastate
transactions which are not components of interstate commerce."5 Thus, a seller's
promotion of sales in the City by such means as advertising, promotional events or
solicitation of sales, provides a basis for taxing sales by that seller if, and only if, the
seller has a physical presence in the State of Alaska.
" KCC 3.08.010(c)(3).
5 Douglas v. Glacier State Telephone Co.,615 P.2d 580, 583 (Alaska 1980).
Assembly Joint Work Session Packet September 11,2013 Page 6 of 17
BIRCH HORTON BITTNER&CHEROT
A PROFESSIONAL CORPORATION
Ms. Mary C. Munk
May 18, 2011
Page 4
3. Federal Moratorium on Taxation of Internet Access.
Another issue that may arise when the City attempts to tax sales that are made
over the Internet is whether those sales are exempt from City sales tax under federal
law. You may encounter a misconception among some members of the public that
there is such an exemption, but that is not the case. The federal Internet Tax Freedom
Act of 19986 placed a three-year moratorium on the imposition of "taxes on Internet
access" services as well as any "multiple or discriminatory taxes on electronic
commerce" by state or local governments. The moratorium originally was set to expire
on October 21, 2001, but later was extended to November 1, 2014. The moratorium
only prohibits state and local taxes on Internet access (e.g., a sales tax on the monthly
fee charged a customer by an intemet service provider), and taxes that apply only to
electronic commerce, or make electronic commerce subject to a different tax rate than
transactions conducted through other media. It does not provide any blanket tax
exemption for transactions over the internet.
Please let me know if I,may be of further assistance in this matter.
Yours truly,
BIRCH HORTON BITTNER&CHEROT
Thomas F. Klinkner
TFK:cmm
6 Public L. No. 105-277, 112 Stat. 2681-2719, §§1100, et seq.
Assembly Joint Work Session Packet September 11,2013 Page 12 of 17
Or 7- Quayanna Development Corporation•
�° 1i xm 1
A k - ..., A 11801 Middle Bay Drive
m 1 , 7- o Kodiak, Alaska 99615
m �'
' � : TEL :(907)487-2297
p r t� CELL :(907)317-0083 r.Oae�� CO
e-mail :plarc@alaska.net
August 78, 2013
Lori Aldrich
Solid chaste Program Coordinator
Department of Environmental Conservation
555 Cordova Street
Anchorage, AK 99501
RE: Class B Compost Used at My Home
Dear Lori:
As I mentioned to you over the telephone, approximately 8 weeks ago I had transported about
20 cubic yards of Class B compost processed at our composting site at the Kodiak Island
Borough landfill to my residence in Bells Flats. Approximately 10 yards of this compost has
been mixed with screened topsoil and utilized in my yard and in some flower pots. The
remaining compost is in two small piles on my property. This project was my effort to create a
demonstration project that shows the beneficial uses of compost that will he possible when we
can offer a Class A compost product for sale to the general public.
It is my understanding that Class B compost can be utilized in applications where there is little
likelihood for it to come into contact with the public according to EPA regulations and it was
under this understanding that I have used it at my home.
Like all compost created at our site, this compost has experienced temperatures above 131° F in
excess of 45 days, far above the minimum of temperature requirements for Class B compost.
Our typical treatment is to create a pile each week with approximately 50 yards of biosolids
with approximately 200 yards of wood chips and processed compost mixture. Within 4 to 5
days that pile is above 131°. That pile will then be remixed and allowed to process another two
weeks before it is considered "processed". It then is placed into a "processed" pile and further
allowed to cure until the "processed" pile is screened to remove the larger wood chips for reuse
in a new batch. Our observations are that the screened pile remains above 131° F for at least
another two weeks after that. In most cases the compost has experienced consistent
temperatures above 131°F for over 6 weeks. Testing of the compost has shown it to meet Class
A standards.
Composting Permit Application Cover Letter Page 1
Assembly Joint Work Session Packet September 11,2013 Page 11 of 17
If these requirements cannot be met, further corrective action will be required.
• In the creek adjacent to the property, collect one sample upgradient of the biosolids and
one sample downgradient and have them tested for Salmonella.
• Compare the results of the upgradient and downgradient sample. If the downgradient
sample is more than 20%higher than the upgradient sample for Salmonella content.
further corrective action may be required.
• Submit all these sample results and temperature and metals testing data from ALL the
composted material from the landfill to ADEC no later than September 13, 2013.
• All remaining stockpiles of biosolids removed from the landfill must be returned to the
landfill.
Penalties for violation of state statutes and regulations can be quite serious. In a civil action, a
person who violates, or causes violation of a provision of regulation, a permit, or an ADEC
approval may be liable to the state for substantial monetary damages under AS 46.03.760.
Depending on the nature of the violation, you may also be liable for the state's response costs
under AS 46.03.822, for spill penalties under AS 46.03.758-759, for administrative penalties
under AS 46.03.761,or for other kinds of damages or penalties under other statutes.
In a criminal violation,a person who acts with criminal negligence may be guilty of a Class A
misdemeanor-AS 46.03.790. Upon conviction, a defendant who is not an organization may be
sentenced to pay a fine not exceeding$10,000.00 and/or sentenced to a definite term of
imprisonment of not more than one year. Upon conviction,a defendant that is an organization
may be sentenced to pay a fine not exceeding the greater of$200,000.00 or an amount which is
three times the pecuniary damage, loss caused by the defendant to another or property of another
-AS 12.55.035. Each day of violation may be considered a separate violation. Alaska laws
allow the State to pursue both civil and criminal actions concurrently.
Nothing in this notice shall be construed as a waiver of the state's authority or as an agreement
on the part of the state to forego judicial or administrative enforcement of the above-described
violation(s)or to seek recovery of damages, cost, and penalties as prescribed by law. In addition.
nothing herein shall be construed as a waiver of enforcement for past, present, or future
violations not specifically set forth herein.
Lori Aldrich
Enforcement Officer
Credential No. R-0292, Issued 8/30/2012
() Personally Served
(x ) Sent by Certified Mail
#7012 1010 0003 0389 9903
on the 22nd day of August,2013 .
2 of 2
Assembly Joint Work Session Packet September 11.2013 Page 10 of 17
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
STATE OF ALASKA
NOTICE OF VIOLATION
Failure to meet the conditions of ADEC approval,dated December 18; 2012, for Composting
Sewage Sludge at the Kodiak Island Borough Landfill
Violation of 18 AAC 60.505(c)requirement for a permit for landspreading of Biosolids
To: Mr. Peter Olsen
Quayanna Development Corporation
11801 Middle Bay Drive
Kodiak,Alaska 99615
Enforcement Tracking No. 13-0974-40-0001
The Alaska Department of Environmental Conservation (ADEC)alleges that on or about August
15,2013, in Kodiak, Alaska, Peter Olsen did unlawfully landspread composted sewage sludge
(biosolids),from the project at the Kodiak Island Borough Landfill,on his personal property at
11801 Middle Bay Drive. Such actions are in violation of ADEC approval,dated December 18,
2012 for Composting Sewage Sludge at the Kodiak Island Borough Landfill and 18 AAC
60.505(c), which requires a permit for the activity.
Mr. Olsen self-reported, on August 15. 2013, that he had landspread several cubic yards of the
Class B Biosolids on his personal property. hi addition, on August;l6, 2013; ADEC received an
anonymous complaint regarding the situation. Landspreading of Class B Biosolids requires a
permit under 18 AAC 60.505(c), and the original authorization for the composting project at the
landfill approved the use of the biosolids only at the landfill. In a letter,dated August 18, 2013,
Mr. Olsen argues that it is likely that the biosolids would meet Class A Exceptional Quality
standards, which would not require a permit; however, he has not produced data to demonstrate
this. He contends that the use of the biosolids at his home poses no risk to health or the
environment at his property or surrounding properties.
To address the violation(s) described above, ADEC requires that Mr. Olsen do the following:
• Collect five independent random samples of the landspread biosolids and have them
tested for Salmonella, and metals listed below.
• Compare the results to the following requirements:
o Salmonella <3MPN/4 am
o Arsenic 41 mg/ke
o Cadmium 39 mg/kg
o Chromium 1,200 me/ke
o Copper 1,500 mg/kg
o Lead 300 mg/ku
o Mercury 17 mg/ke
o Nickel 420 mg/kg
o Selenium 36 mg/kg
o Zinc 2.800 mg ke
Assembly Join/Work Session Packer September 11.2013 Page o or rI
Alternatives Evaluation for Management of Biosolids
Or,"Why did the City of Kodiak choose Compost?"
Alternative Description Advantages Disadvantages Estimated Costs
Technology (as of studies by
C112JIUill)
Cannibal Modify existing Integrated process Only 42%reduction in Installation/capital:
Process WWTP process to Less frequent solids biosol ids—not enough $171s1
optimize metabolism processing than existing Inert solids volume increases Annual O&M:
of microbes digesting Eliminates primary clarifier Requires additional WWTP $10k
sludge. and sludge volume Not recommended
May increase WW nutrient Does not•cork in cold
removal climates
USCG still requires
processing
Dry/Incinerate Dy and incinerate Max solids reduction high O&M costs Installation/capital.
existing sludge from compared to others high capital costs S25M
WWTP. Energy recovery possible High maintenance and Annual O&M:
Pathogens eliminated replacement costs 550k
Stable,odorless ash or Ash may be hazardous Annual sewer rate
granules Costly air emissions control increase per
Ash can be used as mineral 2-5 year expensive EPA equivalent
aggregate for permit for new sewer sludge residential unit:
building/landfill incinerator(SS]) 5420-500
Ship biosolids Slap and dispose of Removes hiosolids from the high cost Installation/capital:
Off-Island hiosolids off-island in island Specialized shipping and $300k
special containers. containers required Annual O&M'.
Transfers biosol ids to $650k
someone else to Annual sewer rate
process/dispose increase per
Not a longterm solution equivalent
Multiple contracts for residential unit:
shipping and for handling $150-180+
required
Deliver Continue to truck No new facility and Landfill space not available Installation/capital:
hiosolids to biosolids to existing equipment needed for at least 2 years 510k
Landfill landfill. More cost-effective than Borough operating Annual O&M'.
incineration or shipping_ costs/rates estimated to 5500k after 2015
increase 3%per year. Annual sewer rate
Landfill will fill up again increase per
equivalent
residential unit:
$80-5100
Compost Treat hiosolids with Compost muy be marketable May need to import organic Installation/capital:
aeration,amendments Works in cold climates substrate 52SM
(wood chips)and Landfill site should be Kodiak compost market Annual O&M:
curing to create available for composting not developed SI 50k
biological Compost useful for landfill Requires odor control Annual sewer rate
decomposition cover Labor-intensive increase per
resulting in stable Can eliminate cardboard Larger footprint equivalent
organic and nutrient- and yard waste from landfill residential unit:
rich product. waste stream $70-90+
Extends life of landfill
Sustainable solution
Economic development
Successful pilot project with
DEC approval
Operating in 44 states and
other AK communities
This matrix summarizes disposal alternatives for nearly 2000 tons annually of hiosolids produced on Kodiak
Island.The information was developed by the City of Kodiak and its consultants.The Council evaluated the
pros and cons,and the capital and operating costs to determine that compost was the hest solution.The
bottom line is that composting provides an environmentally sound.sustainable solution that could promote
economic development and will minimize the impact on residential sewer rates.
The next steps are to look at the details of operations, location,permitting,licensing, leasing and
Cite/Borough agreements,community outreach and feedback.
Prepared by the City of Kodiak to support public process and community engagement August/September 2013.082913
Assembly Joint Work Sesame Packet September t 1,2013 Page a or 17
Past, Present, Interim and Future Solutions for Kodiak Island Biosolids Management Rem 4
This chart summarizes the past,present and desired future City and Borough actions to manage biosolids from Kodiak Island,
including City-piped sewage;K113-piped sewage;USCG WWTP's biosolids;septic tank haulers. All residents and visitors to
Kodiak on the City,Borough,and State road system contribute to the biosolids processed by the City's treatment facility.
'Diming Riosolids Management Activities:City of Kodiak and Kodiak Island Borough
1987-2013 1987 Regulations require that biosolids he hauled to landfill,and not released into the ocean.The
PAST City has delivered almost 2000 tons of biosolids annually to the Borough's landfill since 1987.
1998 CH2M HILL study sludge management due to concerns expressed by KIB for both City and
USCG biosolids being too wet going to landfill.
2001 Upgrade of the City's Wastewater'treatment Plant(W WTP)to add primary clarifier and other
improvement to produce drier biosolids for co-disposal with solid waste.
2007-2013 2007 Borough advised City of insufficient landfill capacity and need for new solutions for biosolids
PRESENT- management.
STUDY AND
TEST 2008 City approved study with CH2M I11LL.City approved Pilot Composting Test Study.
2010 Compost A was successfully achieved in Biosolids Composting Pilot Test.
2010-2012 Meetings continue between City and Borough.
2012 City signs 5-year agreement with Quayanna Corp(QDC)to develop public private partnership
for composting.QDC submits permit application to ADEC.
June 2012 Borough notified City that biosolids could not be accepted at landfill after IS December
2012.
December 2012 USCG provides land for interim biosolids stockpiling.Borough and City agree to
process biosolids at landfill to Class B compost. Borough approved license agreement with
expiration of 15 August 2013.DEC authorized KIB for temporary Class B composting of biosolids at
the landfill.
2013-2015 January 2013 QDC begins composting(Class B)at the landfill.Public concerns with any proposed
INTERIM composting operations at Middle Bay result in examination of long term land lease for composting
SOLUTION operations at the landfill.
February 2013 City meets with CI I2M HILL to review management options,operations and
construction costs,costs to ratepayers,
May 2013 QDC withdrew DEC permit application for composting at Middle Bay site.
.luly 2013 KIB Planning and Zoning Commission supported recommendation that landfill area was
available for longterm lease for future composting facility.
July 2013 City and Borough meet to develop plan for interim license,draft of longterm lease at
South Dump Site,DEC permit,site survey and design/construction ofa composting facility,QDC
contract,public outreach.
August 21113 Borough administratively extends license for composting on landfill.City requests
proposal from CH2M HILL for design of Class A composting facility_Received 14 August.
August 2013 QDC moves compost from landfill to private property.DEC issues Notice of Violation
to QDC that is supported by City and Borough.
September 2013 Borough meetings to review extension of license agreement until 2015 when new
site/facility is constructed:12 September worksession, 19 September Assembly meeting
September 2013 City/Borough officials and community representative to tour comparable
composting facilities in Washington state with CH2M HILL biosolids engineer_
September/October 2013 City works with Kodiak community to define future solution for
managing biosol ids.This will include meetings with Monashka Bay Service Area Board,public
meetings,ongoing worksessions and hearings with the Borough.
2015 forward 2015 forward
FUTURE • Class A Composting facility to be built and operating on landfill site.
LONGTERM • Nearly 2000 tons of biosolids from Kodiak community to he processed annually.
SOLUTION • DEC permit to be approved.
• Borough to issue longterm land lease for operations on landfill site(South Dump Site).
• City to contract with QDC for private operations of the Compost operations.
• Life of KIB landfill to be extended due to processing and export of biosolids_
• Class A compost to he produced and marketed.
• City/Borough ratepayers to benefit with reasonable monthly rates.
For additional information,please contact Mark Kozak,Public Works Director mko,akrcity.kodiak.ak.us
Assembly Joint Work Session Packet September 11,2013 Page 7 of 17
JUDITH KIDDER Page 3 o14 -- _
Account Number 1819931 ff
Invoice Date August 5,2013 alaska
------ ------- -- --- - -..r' COMMUNICATIONS.
•
Payment Detail
Payment on July 21,2013 166.59 CR
Total Payments 166.59 CR
ACS Bundled Services
(907)487-2421
Local Services
Call Forwarding Pkg Feature 8/5/2013 - 9/4/2013 1 Unit 0.00
Caller ID N/C 8/5/2013 - 9/4/2013 1 Unit 0.00
Continuous Redial N/C 8/5/2013 - 9/4/2013 1 Unit 0.00
Caller ID on Call Waiting N/C 8/5/2013 - 9/4/2013 1 Unit 0.00
Call Waiting Pkg 8/5/2013 - 9/4/2013 1 Unit 0.00
Last Call Return N/C � I OCC - 8/5/2013 - 9/4/2013 1 Unit 0.00
r I:Redn(llLii Se-tvt ° " 8/5/2013 - 9/4/2013 1 Unit 14.50
Custom Calling Feature Pkg In c1 i3- , 8/5/2013 - 9/4/2013 1 Unit 7.95
Three Way Calling N/C 8/5/2013 - 9/4/2013 1 Unit 0.00
Voicemail (Inactive) 8/5/2013 - 9/4/2013 1 Unit 0.00
Long Distance Services
ACS Instate Long Distance 0.00
Easy Choices-100 Minute Plan 5.95
Internet Services
Special Offer Bundle Credit 8/5/2013 - 9/4/2013 I Unit 28.40 CR
Home Internet I.OM 8/5/2013 - 9/4/2013 I Unit 79.00
Total ACS Bundled Services ye le Ma fn o f;, ,e v---■ . 79.00 =
By choosing an ACS Bundle,you saved S 28.40 CR over the cost of the same service sold separately.
Additional Monthly Services
(907)487-2421 a
Local Services
RTB Refund 8/5/2013 - 9/4/2013 I Unit 0A3 CR
Total Additional Monthly Services 0.13 CR
Surcharges
•Access Recovery Charge 8/5/2013 - 9/4/2013 1 Unit 0.53
*Federal Subscriber Line Chrg 8/5/2013 - .9/4/2013 - I Unit - 6.50
Federal Universal Service Fund 1.96
Alaska Universal Service Fund 2.90
Total Surcharges 11.89
Taxes and Other User Fees
*Alaska Network Access Fee 8/5/2013 - 9/4/2013 1 Unit 4.75
Federal Excise Tax(Local) 1.17
E911 Surcharge Kodiak/FtGreely 8/5/2013 - 9/4/2013 I Unit 0.75
AK Regulatory Cost Chg-Local 0.30
AK Regulatory Cost Chg-ACS LD 0.18
Alaska Telcom Relay Service 8/5/2013 - 9/4/2013 1 Unit 0.01
Sales Tax 5.67
Total Taxes and Other User Fees 12.83
Assembly Joint Work Session Packet September 11,2013 Page 13 of 17
Consequently, it is reasonable to believe the use of the compost at my home poses no risk to my
family or anyone else. I have come to understand that this incident may be in violation of some
portion of either State or EPA regulations. Please review the applicable regulations and let me
know what needs to be done to properly address this situation.
Quayanna Development Corporation is committed to seeing the proper processing of Kodiak's
biosolids via composting and are optimistic about its future use in our community. If we have
unintentionally misused our compost by bringing it to my home we want to correct the
situation as soon as possible.
I look forward to addressing this situation with you.
Sincerely,
I
, t
Peter J. Olsen, Executive Director
Quayanna Development Corporation
Composting Permit Application Cover Letter Page 2
Assembly Joint Work Session Packet September 11,2013 Page 14 of 17
Compost Located at Peter J. Olsen
Properties in Bells Flats, Kodiak, Alaska s
M . TIP
_"va r � k Peter J. Olsen property at Bells Flats includes
', - "" ., Plle 2 ti two lots. One is my primary residence and
, r the other a rental currently occupied by my
,�i r y > yw - 2 eldest son Aaron and his family.
a." i lrY yW���gg T 1
. '¢ c " y ,- The compost has been used in the new yard
i-i r ' � `` "g "'� at my house and in flower beds as well as
� vd ' ,',,s' - Creek , Sitka s ruce seedlings transplanted into
, -i �Yy4i,- 2 coffee cups.
t�t �P iay G� �'
1 dT'i4*it: ' e,,
I '' - dr vy . L
4:y� u��.+.s
r Yard j �e .; ,
7 ` wr , Y` 't r �1 .5 i ' '", The yard at my house has
K ,g ,ti4A been redone using a mixture
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Assembly Joint Work Session Packet September 11,2013 Page 16 of 17
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Assembly Joint Work Session Packet September 11,2013 Page 15 of 17
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Assembly Joint Work Session Packet September 11,2013 Page 17 of 17
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MELVIN M . STEPHENS. II
A PROFESSIONAL CORPORATION
ATTORNEY AT LAW
328 CENTER AVENUE, SUITE 90A
P.O. BOX 1129
KODIAK,ALASKA 99615
TELEPHONE 19071 4883143
September 10, 2013
Kodiak Island Borough
710 Mill Bay Road
Kodiak, Alaska 99615
Ann.: Nova Javier, Borough Clerk via e-mail
Re: Item #3 on Agenda of September 11 Joint Work Session
City Sales Tax — GCI and ACS Charges to Borough Residents
Dear Nova:
I see that the above item is to be discussed at tomorrow's joint work session with the city
council. In order to facilitate that discussion and clarify certain issues likely to arise in that context,
I would ask that this letter be distributed ahead of time to the meeting participants, both City and
Borough.
I assume that placement of this item on the JWS agenda is a result of complaints recently
voiced by Judith Kidder regarding the imposition of Kodiak City sales tax on telephone and intemet
services which she receives at her home, which lies outside of the City of Kodiak. The agenda
packet for this item includes a page from Ms. Kidder's August 5, 2013 billing statement from ACS
for telephone and intemet access services showing that her bill included a sales tax of$5.67.1
The agenda packet also includes a 4-page letter dated May 18, 2011 from city attorney
Thomas F. Klinkner to city finance director Mary C. Munk which, among other things, discusses
"application of the sales tax levied by the City of Kodiak . . . to sales of goods that a customer
orders over the internet from a business located in the City, for delivery in the City." (Emphasis
added). I suspect that some of the highlighting or notes added to that letter may be confusing or
potentially misleading in the context of Ms. Kidder's complaint.
This is because sections 1 and 2 of Mr. Klinkner's letter address only how the Kodiak City
sales tax applies to the sale of goods — i.e., "tangible personal property" — as opposed to the sale
The billing statement in question does not identify the City of Kodiak as the source of this tax
but I am assuming this to be the case for present purposes. A sales tax of $5.67 is the equivalent
of a tax of 7.0% on a sale of $81.00. I am unable to determine which items on Ms. Kidder's bill
may have been disregarded in arriving at the conclusion that she purchased total services of$81.00
which were subject to city sales tax.
Nova Javier -2- September 10, 2013
of services.' Since Ms. Kidder is being taxed on a sale of services, sections 1 and 2 of Mr.
Klinkner's letter are largely irrelevant and, therefore, potentially confusing.
An inquiry as to whether the City of Kodiak may properly impose a sales tax on the
telecommunications services which Ms. Kidder receives at her home (beyond city limits) should
begin with KCC 3.08.0I0(d)(l), which reads:
(d) For the purposes of the tax levied by this section, services are made within the
city if regardless of the location of the business rendering the services:
(I) The services, or any essential or substantial pan thereof are rendered
within the city.
Needless to say, this language does not purport to impose a city sales tax on services rendered
entirely beyond the city limits. In order for it to apply, some essential or substantial part of the
services must have been rendered within the city? The fact that the vendor rendering the services
maintains an office or other place of business within the city is irrelevant.
Even if the Kodiak City Code clearly and unequivocally purports to impose a sales tax upon
a given type of transaction, of course, the city may not do so if state or federal law is to the
contrary. In section 3 (on page 4) of his letter of May 18, 2011, Mr. Klinkner discusses the Internet
Tax Freedom Act and states that it imposed a moratorium on state and local taxes on internet access.
He cites "a sales tax on the monthly fee charged a customer by an internet service provider" as an
example of the type of tax subject to this federal moratorium (which will run at least until
November 1, 2014).'
As noted in footnote 1, above, Ms. Kidder's bill from ACS appears to impose a sales tax on
internet access. At the joint work session, I would appreciate a succinct discussion of the legal
authority the City has been relying upon for imposing this tax (if, indeed, it is a city sales tax). If,
as Mr.Klinkner advised the City more than two years ago, it is precluded by the Internet Tax
Freedom Act, then internet customers both inside and outside of the city would appear intentionally
to have been taxed in violation of federal law.'
2 Mr. Klinkner cites KCC 3.08.010(c)(1) and (3) in the course of his discussion. Subsection
(c) of KCC 3.08.010 outlines the circumstances under which "a sale of tangible personal property"
will be deemed to have occurred "within the city" so as to be taxable under KCC 3.08.010(b), which
reads: "A sales tax of seven percent of the sales price or charge is levied on all sales, rentals, and
services made within the city, other than rentals of transient rooms."
3 A bill which would make the moratorium permanent is presently before Congress. See H.R.
434, introduced 1/29/13 and referred to the House Subcommittee on Regulatory Reform,
Commercial and Antitrust Law on 2/28/13.
° Under the original version of the Internet Tax Freedom Act, taxes on Internet access
"generally imposed and actually enforced prior to October 1, 1998" did not fall with the moratorium.
P.L. 105-277, §1101(a)(1). To meet that definition, however, the tax which was imposed and
actually enforced had to have been "authorized by statute." Whether a municipal sales tax would
meet this criterion is perhaps arguable. Be that as it may, the 2007 amendments to the Internet Tax
Nova Javier -3- September 10, 2013
On a related matter, I am advised by more than one local service business maintaining an
office within the city, that the city finance department has insisted that city sales tax be charged and
collected on all services rendered by that business, even if they are rendered entirely beyond the city
limits. As noted above, KCC 3.08.010(d)(1) requires that some essential or substantial part of a
service be rendered within the city before it is subject to city sales tax. Tomorrow's joint work
session would present an appropriate opportunity and forum for the city to clarify its position on this
issue.' I would ask that it be addressed at that time.
Thank you,
Mel Stephens
Borough Assemblymember
Freedom Act removed the exception for taxes imposed before October 1, 1998. The law now reads,
in relevant part: "No State or political subdivision thereof may impose any of the following taxes
during the period beginning November 1, 2003 and ending November 1, 2014:(1) Taxes on Internet
access." P.L. 108-435, 118 Stat. 2615, §2(a).
' The only circumstances under which the Kodiak City Code purports to impose a sales tax on
services rendered entirely outside of the city are described in KCC 3.08.010(d)(2). For that
subsection to apply, however, the services must "benefit or directly relate to" a person, property or
organization within the city. The provision in question reads:
(d) For the purposes of the tax levied by this section, services are made within the city [and thus
subject to city sales tax under KCC 3.08.010(b)] if, regardless of the location of the business
rendering the services:
a * rt
(2) The order for the services is solicited or received within the city or payment is received within
the city, the services are rendered by a business maintaining an office, agent, or employee within the
city, and the services benefit or directly relate to any person, property or organization within the
city. (Emphasis added).
The telephone and Internet services delivered to Ms. Kidder's home (outside the City) would
not appear to "benefit or directly relate to" a person, property or organization within the city. The
same holds for most routine hands-on services such as house cleaning, lawn and garden care or home
maintenance services.
KCC 3.08.010(d)(2) will typically apply only to professional services rendered entirely
outside the city — e.g., by law firms, accounting offices and other professionals who maintain a
branch office within the city. If the client of such a firm has appropriate dealings with the Kodiak
office, KCC 3.08.010(d)(2) could impose a sales tax on the services which were rendered even if
all of them were rendered'outside of the city (e.g., by the firm's Anchorage office).
Saand
do oFP Ko o
.
, . ,,-
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t+bx t uoGi �; ;
Kodiak Island Borough City of Kodiak
710 Mill Bay Road, Rm. 101 710 Mill Bay Road, Rm. 220
Kodiak, AK 99615 Kodiak, AK 99615
907.486.9310 907.486.8636
September 12, 2013 Mr. Eric A. Olson, Chair 1IIIIJt\ T711'
North Pacific Fishery Management Council
605 W. 4th Avenue, Suite 306
Anchorage, AK 99501-2252
Dear Chairman Olson:
Agenda Item C-5(a) GOA Trawl Bycatch Management
The communities of Kodiak Island have reviewed the eight public proposals for comprehensive
management of bycatch in the Gulf of Alaska (GOA) groundfish trawl fisheries that are published on
the NPFMC website. Five of those deal most specifically with the inshore trawl fisheries in the
Central GOA surrounding Kodiak and these received the bulk of our attention. We believe that
these five proposals provide a good, broad mix of goals, objectives, elements, options, and
concepts with which to begin the design of an effective bycatch management program.
The proposal submitted by the Alaska Groundfish Databank, the Alaska Whitefish Trawlers
Association and the Pacific Seafood Processors Association follows patterns of previous catch
share programs in the Gulf of Alaska and the Bering Sea, with a focus on ending the race for target
fishery catch in order to provide an opportunity for individuals and cooperatives to take greater care
in avoiding bycatch. The AGDB/AWTA/PSPA proposal, which would issue catch shares to owners
of eligible vessels holding valid LLPs and who belong to an established cooperative, sets a
framework for possible alternatives. For example, catch shares could be issued to harvesters and
processors instead of solely to harvesters through the intermediary of cooperatives, as outlined in
the proposal by Pacific Seafoods. Or some quota share could also be issued to communities, to
compensate for surplus infrastructure, as outlined by Plesha/Riley.
A separate proposal submitted by Americans for Equal Access focuses directly and solely on
bycatch, rather than on target species. It contemplates annually assigning portions of prohibited
species catch (PSC) limits and maximum retainable amounts (MRAs) to individual fisheries and
their harvesting participants, rather than issuing more permanent catch shares to private
individuals.
NPFMC
Page 2
September 12, 2013
Yet another approach is put forward by the Alaska Marine Conservation Council, the Gulf of Alaska
Coastal Communities Coalition, the Aleutians East Borough and others. Their proposal calls for the
issuance of any target fishery and bycatch shares to a community fishing association (CFA)
comprising representatives of local governments, industry, and conservation interests. The CFA
would then apportion annual harvesting opportunities based upon a formula including catch history,
number of harvesting participants, and specified performance standards.
We see value in more fully developing and analyzing the benefits and impacts of each and all of
,+I"aI�IVlilll'lUlp°'
these approaches. The communities of Kodiak appreciate,tti need to devise a comprehensive
to manage the bycatch of the groundfish trawt'fishru'° but we need also to protect our
program 9 Y g ,�gIIIl01PAllu�' "tiyludnlr. p
social and economic wellbeing. As noted in our prewous letters,to the Council, and in formal
resolutions passed by the Kodiak City Council andl!theCKodiak Island Borough, we request that the
III!II!i'Itl,.dl� `�tIIIVl11
NPFMC make sure that any management programsr'not only provide effective controls on bycatch,
r d!IIyII!11i1W !VibII
but also maintain or increase target fisherNyll�'Vllllaandings, maintain or )Inorease employment
opportunities, provide opportunities for value-added processing, maihtai!hyy opportunities for
fishermen and processors to enter the fishery, rI m a Ipe o "Vu�
p ry, minim¢e,any,adverse effects of cn�onsolidation in the
III I!Ip �A410p�.v!r�"� ryiGLP
harvesting or processing sectors, maximize active participation by owners of vessels and fishing
,� III IVIIIVI!IIIIVNn pI'llOn�
privileges, and maintain the economic Istrlength•and vitality of the Kodiak waterfront.
�pl u�„ I:II 1 11
!1(IIII ',i1�1 Illlplllr� �I�f; j IIIuLw
However you choose to proceed, the localep overnments of Kodiak will need assurance that our
proceed,
b^a. IiiIl9 '1LiI II!!IIIIIV !4!ci: )�
community interests, economy;,and wellbeing!Iwill be protected and enhanced.
�If" p,�!�IIIII pmo.,,,40N1 1 t" I�!10,,uIIIIVI I q�1���p1I
IIIIIIIIII �v Nil lllp � hJIpIVll llil '"I�Iili�
We appreciate your consideration!IofI, our recommendation that°each of the various proposals be
N. I° IIII°A "Vdill!I!m
further developed and analyzed, and Iwe look forward to continued cooperation in the management
pl"p. mlpl l ry.., IIII II
of groundfish fisheries in the lcentral Gulfiof Alaska. ��u
,+^ Ipl II II IUIU ^v11WI IIII ! ly
�1' �lill�illl ii, �I!I IhI11111' V:41,11,11
'I�1 IIII I�ib1 ,„,, IIII 1d1)1
Sincerely tI `1; 1111111 hII� 11GII�III, 1hp
,1I,n. VIII ll 'I
71�ll llil!11II dl l tt,4, 4' 1
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Jerome M. SelbywaMayor 'i1111111
1fli: Pat Branson, Mayor
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Kodiak Island Borough'I I ull City of Kodiak
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KODIAK ISLAND BOROUGH
Regultr-Mset f: at Il, 020/3
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