Council mulls keeping sales tax at 5 percent

In its Monday meeting, the Nome Common Council unanimously passed an ordinance through first reading that aims to reduce the seasonal summer sales tax from 7 percent to 5 percent.

The ordinance was introduced by Councilman Mark Johnson. Nome voters have passed a ballot measure prior to the COVID pandemic to raise the 5 percent sales tax in the summer months to 7 percent in an attempt to capture more revenue for the city as the Nome population surges in the summer months. Then came the pandemic, hitting Nome’s economy hard. The proposed ordinance states that the United States is still in recovery from the COVID-19 pandemic, and that the Common Council “desires to temporarily reduce the seasonal sales levy for summer 2022 to aid and facilitate economic recovery in the City of Nome.”

The switch from five to seven and now back to five percent requires bureaucratic steps to take effect. Aside from passing the ordinance through second reading, the city then needs to inform the Alaska Remote Seller Sales Tax Commission – a statewide body that helps cities collect sales tax from online shops and so-called remote sellers — to relay the information to the remote sellers to charge only five percent. In an email chain with City Clerk Bryant Hammond, Clinton Singletary with the Alaska Remote Seller Sales Tax Commission informed Hammond that they already told the remote sellers of the seasonal tax increase and that they need to see the supporting council action to rescind the notice of the two percent increase for

May through August.

The ordinance passed first reading, with Jerald Brown casting the only no vote.

The second reading and public hearing on the matter will take place at the next council meeting on April 25.

In other business, the Council passed two resolutions authorizing Port of Nome staff to seek U.S. Dept. of Transportation grants through the Rebuilding American Infrastructure with Sustainability and Equity grant program, RAISE for short. One grant request would ask for $3.3 million for the planning and design phases of local service facilities for the Nome port expansion, formally known as Arctic Deep Draft Port Modifications Project, with a city cash match of $830,638 for a total cost of $4.2 million for design and engineering of the local service facilities. This does not include construction.

The other grant under the RAISE program would seek nearly $3 million to complete the Thornbush storage site in the uplands of the port, to prepare an 18-acre storage and laydown area for cargo, machinery, equipment and also give it time to settle to support storage space for the needs arising for the deep-draft port expansion.

The Council voted unanimously to support both resolutions for port staff to pursue those grants.

The Council passed a resolution recognizing April as Child Abuse Prevention month; and a resolution to authorize the city manager to enter into an agreement with RSA Engineering to upgrade the heating and ventilation systems in City Hall and the Nome Rec Center. The fee of over $475,000 combined for both facilities would be for design and construction administration services.

Delivering the NJUS report, Ken Morton informed the Council that the communication system with the wind turbines at Banner Peek are fixed and the wind mills are spinning again. He also said that NJUS starts the recruitment process as several long time NJUS employees like David Ojanen and Arne Handeland have retired or are about to do so.

In Councilmember comments Adam Martinson updated the Council on a community celebration in honor of the Nome Nanooks basketball team. The event is planned for April 30, at the Rec Center.

Councilmember Scot Henderson requested a fiscal note or budget assumptions to supplement information on the sales tax holiday, “to have quantitative data to base our decision on.”

Mayor John Handeland acknowledged the Nome NYO team for getting several gold medals during last week’s Traditional Games NYO meet in Juneau.

The Council then went into executive session to discuss union negotiations.