Nome Council hears gloomy news from state legislators
Senator Donny Olson (D-Golovin) and Rep. Neal Foster (D-Nome) told the Nome Common Council on Monday of efforts in the state legislature to claw back some of the $175 million appropriated last year by the state for the Nome Port expansion project. Olson and Foster said they fought too hard for the money and won’t let go of it without putting on a fight. “We are in a defensive mode,” Foster said. “We’re trying to protect the port money and also protecting rural Alaska from attacks on the Power Cost Equalization.”
Foster, quickly breaking away from voting on budget amendments at the House Finance Committee, which he co-chairs, said that he and Senator Olson fought very hard for the $175 million that would go toward the City of Nome’s obligations to fulfill their portion of federal cost share to design and build an expanded Port of Nome. The legislature is currently hammering out the state’s budget, trying to navigate serious budget deficits. Governor Mike Dunleavy’s budget proposal is $5 million short of a balanced budget, or ten percent of then entire state budget. Adding a dismal projection of losing about $679 million in oil tax revenue due to falling oil prices, the state looks at a $1.5 billion deficit – based on paying out a full Permanent Fund dividend. Foster said the $175 million for the Nome port was “probably the single largest appropriation to a single district in the state’s history.” Paired with budget woes, Foster said, chatter at the Juneau State Capitol spell no good news for Nome. “There is a little bit of talking in the hallways about maybe pulling some of the money back from the Nome port and also the Anchorage port,” Foster said. In addition, Foster said, a statewide sales tax bill was introduced on Monday, and he advised Nomeites to keep an eye on that, as the City of Nome has a five percent sales tax and putting a state sales tax on top of that would affect residents. He said he’s advocating to fund the Nome-Beltz school campus’ roof replacement, at just under $4 million. In terms of housing, the City tries to build a new teacher and public safety personnel housing, and the state has appropriated $7 million for that project.
Senator Olson is the co-chair of the Finance Committee in the Senate. He added that Anchorage Senator Löki Tobin – formerly of Nome – has introduced a bill to raise the base student allocation from $5,960 to $6,960 per student, which makes its way through the system. Olson also said the governor proposed a full dividend but “so far he hasn’t shown us
where to find the money.” Olson reported that efforts are afoot to change the formula for the Permanent Fund dividend calculation from a full statutory dividend which is based on the average earnings on the last five year to either a 50/50 split for state government and paid out dividend to qualified residents or a 75/25 split. “That fight is going on and hasn’t been settled yet,” he said. He made his position clear saying that he and Rep. Foster are “for a full PFD for everybody out there because many people that live in our constituency are dependent on that PFD to make ends meet, to buy shells, to buy groceries.”
As for revenue streams, Olson said that a bill introduced on Friday by Bill Wielechowski (D-Anchorage) would cut an oil production tax credit, saving the state money and the governor has proposed a carbon capture and sequestration bill.
Responding to the news that the port money could be in jeopardy, Mayor John Handeland said that the City of Nome as the non-federal sponsor of the port expansion project must sign a funding agreement and has “basically gone to the U.S. Army Corps of Engineers to let them know that we have the funding in hand. Clawing that back would be the death knell in this project,” Handeland said. “We had expected to sign that agreement a few months ago, but it’s working its way through and likely be with the city within 30 days to actually sign on the dotted line for that project.” Handeland said that the state’s commitment to the project was also a factor in the federal bill that changed the cost share between the federal partner and the city from 65/35 to 90/10 percent.
Senator Olson, in other news from the capitol, said that the recent refusal to restrict bycatch at the Area M fisheries by the Board of Fish inspired an effort to draft a bill that would close down Area M. However, that bill hasn’t come out of the draft room yet.
Glen Steckman turned the discussion to Nome’s and the statewide housing crisis. He asked Olson if the legislature has discussed anything to incentivize the private sector to develop housing. He said Nome seeks help to develop teacher/ public safety officer housing which would help to stabilize the workforce. He asked for advice from Olson how the city and the school district should approach financing the project as they look at the possibility to get $6.5 million in a revenue bond and the same amount possibly through the Alaska Housing Finance Corporation. “How should we approach this?” Steckman asked. “We’re short, I estimate, about 150 housing units in Nome.” Steckman said this housing situation pushes up salaries, to which landlords respond with higher rents. “It becomes a vicious cycle,” Steckman said.
Housing, housing, housing, Mayor Handeland said, is up there on our radar in a big way. He described an outmigration of residents from villages that face their own housing crisis to Nome and if they don’t find sufficient housing for their families, the move further away. Steckman reminded those present that the Council has created incentives to encourage the private sector to develop housing by eliminating building permit fees and real property tax subsidies. Forms are drafted to apply.
Angie Gorn, CEO with Norton Sound Health Corporation, added to the housing conversation.
NSHC applied to AHFC and received $300,000 toward a total cost of $2 million for two duplexes in Savoonga, she said. “Even if that funding is available, it doesn’t appear to be enough to support all of the needs in Alaska, and it’s very competitive,” Gorn said. NSHC owns 29 units of housing and lease 70 units from different landlords in Nome. “It’s no surprise that Norton Sound often times the biggest consumer of housing in the region,” she said. “We’ve grown, patient care wise, we had to add to our work force. Now they are short on patient lodging and as they add more services and patient care, we don’t have enough room to house our patients,” Gorn said. NSHC estimates the need for three 20-plex apartment units. In addition, she said, NSHC plans to expand Quyanna Care Center, a long-term elder care facility, and this would entail additional housing needs for employees. She said NSHC has the goal to build three 20-plex apartment units which would free up more housing in Nome. Currently NSHC has over 200 job vacancies. “The number one reason cited by someone looking to take a job here, is the lack of housing,” she said.
Senator Olson agreed and said that housing is a statewide problem and to find other ways than AFHC to finance housing projects. “We as elected state officials need to step up to the plate and try to look after projects and details that many people don’t even think about, one of those is obviously housing,” he said.
Walter Rose with Bering Straits Regional Housing Authority reported on projects in Teller and Golovin. This summer, as part of the Teller Environmental Adaptation and Mitigation project, BSRHA will construct eight new homes across from the Teller airport and move 32 homes from flood threatened areas in Teller. BSRHA will provide funding for four new homes using money from an Indian Housing Block grant and Senator Murkowski as secured $5.1 million in Economic Development Initiative funding. Rose said that BSRHA is almost through with the environmental assessment for the 30-acre gravel pad across from the airport to be poured next summer, as well as constructing new homes and relocating existing homes the following summer. BSRHA applied for Indian Housing Block grant program to build ten houses in Golovin, but it is not sure if they receive this very competitive grant. Rose reports that BSRHA received funds to construct three emergency replacement homes in Golovin.
In closing of the work session, Olson said that he can almost “guarantee that they are not going to get their hands on any of the Nome money that we got last year [for the port].
“I wouldn’t get too excited about having that happen right now. It’s an unforeseen thing but I don’t actually see that becoming a reality at all,” he said.
Jay Sterne, the city’s federal lobbyist in Washington D.C. here in Alaska to attend the Arctic Encounters Symposium in Anchorage this week, reported that the strategy to “brand” the port expansion as the “Arctic Deep-draft Port” paid off as it made the project stand out as a project of not only regional, but national importance. He reported to the council that he and the City’s delegation that visited Washington D.C. last month made the rounds to the Alaska Delegation, NOAA, the Coast Guard and the Maritime Ad
ministration of the Dept of Transportation to learn about other federal funding opportunities. He said that Senator Dan Sullivan instructed his staff, after visiting Nome in November, to sit down with senior officials of the Army Corps and from the U.S. Navy to make sure that the final design details for the port expansion are taking their needs into account. Sterne said they talked a lot about the needs of the new port’s basin depth to bring a Polar Security Cutter into the port, which has a 36-ft draft physically, but needs a 40-ft depth operationally. They talked about fuel, dockside capabilities and supplies.
Sterne played a clip taken from a March 8 Senate Armed Services Committee oversight hearing in which ranking Senator Roger Wicker, R-Mississippi, questioned General Glen VanHerck, Commander of the U.S. Northern Command. They alluded to the strategically importance of Nome as it relates to security cutter readiness, Coast Guard ice breakers, Navy vessels and their need to get supplies or fuel from the expanded port in Nome rather than sailing to Dutch Harbor, 800 miles south. He added that although the Infrastructure and Jobs Act allocated $250 million to the port expansion to the Army Corps, but, he said, the dredging portion to dredge from 30 to 40 feet is currently not funded. The Senator heard that funding is adequate for commercial operations, i.e. barges and fishing vessels, but for military use, dredging needs to be done to 40-feet.
After the work session, the council held a brief regular meeting, not taking any actions. The city manager announced to be participating in a meeting hosted by Kawerak, welcoming a delegation from Greenland, consisting of the Greenland Minister of Housing and Infrastructure, the First Secretary of the Greenland Representation in Washington D.C. and three other high-ranking housing and infrastructure officials.
Steckman also floated the idea with the council to pay for heating and ventilation replacement at City Hall with left over federal COVID funds as the City has a “surplus” of $1.3 million from those federal grants. He said that boilers in the Rec Center broke down last year after having been identified for repair 12 years ago. “Maintenance is done… when it’s on fire,” Steckman said. The repairs were done in-house and he said it saves the City lots of money to do those things using inhouse expertise, but fixing heating and ventilation systems requires different expertise.
In Mayor’s comments, John Handeland announced that he will participate in panel discussions at the Arctic Encounter Symposium taking place this week in Anchorage.
He commended the Nome Nanook basketball team on winning runner-up place in the state championship and said they’ve done a fantastic job representing Nome and the western Alaska.
Handeland also informed the council that Alaska District U.S. Army Corps of Engineers Col. Damon Delarosa visited Nome on Tuesday, March 14 to introduce his successor to the region.
Handeland expressed his sadness to the passing of Louis Green Sr., who has held board positions at the Utility board, served as a Nome Common Council member and was an all-around good man, helping out when pipes froze up or the heat was out. “He’d be there to help,” Handeland said. A memorial service is held on Wednesday, March 29.
April 17 would’ve been Green’s birthday and Handeland proclaimed April 17 as Louis Green Sr. Day in Nome.