Hotel room tax hike goes on the ballot
The Nome Common Council gave the nod to seeking the public’s yay or nay on the issue of raising the sales tax on hotel and motel rooms.
Local voters will find the question on the Oct. 2 municipal ballot. Approval of the bed tax hike will not mean an immediate application of the tax, according to Tom Moran, city manager. The new rate would be effective Jan. 1, 2019, based on the daily room rate. It would not apply to rental or lease of a hotel or motel room for a period in excess of 27 days.
Bed and Breakfast owner Judy Martinson wanted to know how the City would spend the increased revenue raised by increasing the tax from 6 percent to 10 percent.
“Tourists are going to be taxed. Is this money going to go into tourism to help tourism?” Martinson asked. “Tourism is pretty defunct in this town. You have to invest in tourism before you tax the life out of it.”
Moran had an answer.
“The Chamber of Commerce came to us with their budget, but they wanted more money,” he said.
“In FY 2017, the bed tax was $135,000. We paid the Chamber of Commerce $144,000 to run the Visitors Center. We were in the red,” Moran explained. “This year they asked for $215,000. The bed tax was $135,000, meaning the City would be $75,000 in the red. We gave them $175,000, meaning we are $40,000 in the red.”
“If we’re going to get more tourists, good,” Martinson returned. “If we are only going to raise the price, it will hurt tourism in a big way.”
“The schools and the Chamber wanted more money,” Moran said. “We thought we would put it on the ballot to see if voters wanted it.”
“I hope the community will get off their dead asses and insist the Chamber does more,” Councilman Stan Andersen said.
All is not lost, Mayor Richard Beneville said. Cruise ship numbers will be up next shipping season. Some small private businesses are creating air packages.
The ordinance will do a good job, he said.
The discussion turned to cleaning up the town, ridding neighborhoods of trashy yards, solving vagrancy and public inebriation downtown.
“We had a trash ordinance before the Council and it failed,” Moran offered.
Back on the subject of hotel and motel room tax, Councilman Mark Johnson remarked that he was not a proponent of increasing any tax in town. However his thought process on the question at hand was that the increase in bed tax would get money from non-residents and enable the City to put it back into tourism.
The Council voted 6-0 to put the question on the Oct. 2 ballot.
Next, the Council responded to a measure passed up from the Nome Planning Commission urging the Council to develop appropriate funds for, and implement a strategy that addresses public intoxication, loitering and vagrancy in a socially responsible and culturally appropriate manner.
The City is on the eve of reworking its Comprehensive Plan. In past surveys the residents have placed a solution to public intoxication high on their priority list of community improvements. That the time was ripe to grapple with the issue came out in the discussion. The Council has tried several measures limiting the sale of specific bottles, changing package store hours from 10 a.m. to 10 p.m. to 11 a.m. to 9 p.m., but these have met opposition or have not worked.
“We’ve tiptoed around things; it has been very frustrating, very frustrating,” Mayor Beneville said. “I’d like us to take the kid gloves off, because the situation is hurting this town.”
“We haven’t abandoned the issue; we just haven’t found anything that works,” Councilman Lew Tobin said.
The Council directed Moran to schedule a work session. That session will occur on Aug. 27, prior to the regular Council meeting.
In money measures, the Council passed a resolution awarding a contract to Nome Machine Works for repair and maintenance of the City’s emergency service vehicles. The term of the contract runs from July 29 through July 28, 2019, with a one-year renewal option. Under the contract, the rates will be: repair and service, $90/hr.; tow service, $50 callout plus $2 per mile; and parts and supplies, cost plus 25 percent markup.
The Council approved a resolution awarding the contract for repair and upkeep of 28 light vehicles to Trinity Sails and Repair. The contract runs also from July 29 through July 28, 2019 with a one-year renewal option. Under the contract the rates will be: repair and service, $60 per hour; standard oil change, $120; winter and summer tire swap, $80; tow service, $100 callout plus $3 per mile, and parts and supplies, cost plus 23 percent markup.
The City rejected local bids on heavy duty and specialty vehicle repair and service. The City’s procurement law would allow Moran to assign the jobs costing a thousand or two to one shop or the other, he said.
The City did not award the emergency service vehicle work to the lowest bidder, which was TRS. Both shops gave responsive bids and did good work, Moran said. He chose to split the work, and gave the emergency vehicle repair to Nome Machine Works. NMW’s owner, Matt Johnson, had served on the Nome Volunteer Fire Dept. and had a keen interest in the fire engines and equipment, Moran observed.
Dave Young of Arctic Sea Mining, owner of the large dredge Myrtle Irene, took the podium during public comment period to ask the Council to help owners and operators of large dredges to get an exemption from U.S. Coast Guard regulations that he said would be cost prohibitive. The regulation requires vessels over 79 feet in length and or 300 gross tons to undergo a load line inspection.
“It is going to be a nightmare for the fleet,” Young told the Council. “They want us to meet the same regulations as barges loaded with freight.
“I’m spending money, already up to a million, to get my barge into the water. It is a serious matter that is going to affect Nome. I think that closing down my dredge is going to impact the community,” said Young. He said he has 15 employees and claims to add a $ 1 million or two to Nome’s economy during a season.
Load line? What in heck is a load line? Andersen asked. A load line pertains to how much of a vessel’s hull must be above the water line with a certain amount of cargo —how much “freeboard” —to prevent the vessel from sitting dangerously low in the water. The rule affects three large dredges wanting to continue mining in the Nome area and several preparing to come north to enter the region’s offshore gold mining industry.
During a session at the Nome Port Commission, Alaska District 17 USCG personnel gave the impression that the large vessel owners would be able to mine this year as long as they were showing good faith and working to comply with the load line regulation.
The load line regulation applies to vessels in the open ocean. In the Nome area, the boundary begins at the shoreline, whereas in other places there is a boundary three miles out, within which the regulation does not apply.
District 17 personnel in the meeting at the Port Commission felt that an attempt to get the boundary pushed out three miles would go nowhere, that the load line regulation might be more flexible as regards the unique gold dredge fleet working offshore Nome.
However, USCG regulators at the national level gave a hard ‘No’ on allowing any exemption from the load line requirement for the gold dredge fleet as a special class. Sen. Dan Sullivan had not been successful in getting any leeway.
He had spent at least $1 million and couldn’t mine this season, Young said.
“When is Rep. Don Young coming to town?” Andersen asked, noting that Young was running for re-election. “Could you [to Dave Young] have a packet [documented statements and e-mails from Sullivan and USCG personnel on the issue]? I will present it to Don and see what we can do.”
He could, Dave Young said.
“I am at a dead end without your help,” Young told the Council.
Meanwhile, Joy Baker, Nome’s port director, advised the Council and Young that the Coast Guard did not currently have a legislative vehicle for granting an exemption, as Coast Guard legislative authorization occurs on a two year schedule.
“That ship sailed three months ago,” Baker said, adding that the next opportunity for securing a dredge fleet exemption would be in the USCG authorization bill two years from now.
“It will be a timeline process to get there for 2020 authorization,” she said.
Dang right, shutting down the large gold mining dredge activities is serious, was Ken Hughes III’s attitude. Hughes chairs the Nome Planning Commission and is a member of the Alaska Mining Association. “Nome ought to declare an economic emergency,” he said. There was tremendous economic potential in the three large dredges companies and two more on the way north, “but Nome isn’t open for business.”
In yet other news, Diana Haecker with husband Nils Hahn and daughter Lizzy Hahn rose to the podium during public comment to announce that the family has closed the deal to become new owners of The Nome Nugget, Alaska’s oldest newspaper and Nome’s newspaper of record.