Legislature ok’s $175 million for Nome port expansion

By Diana Haecker
At last week’s regular Port Commission meeting, Port Director Joy Baker informed the commission that the Alaska Legislature passed an operating and capital budget that included $175 million for the Nome port expansion, officially titled Port of Nome Modifications Project. The budget bill is now awaiting the Governor’s signature before it goes into effect.
The $175 million would satisfy the non-federal fund share for phase one that the City is obligated to pay as the non-federal sponsor of the project. However, Baker said the $175 would be “targeted for the entire port extension.”  Simplified, the port expansion will increase the length of the existing causeway, include an L-shaped dock extension, move the east breakwater further east and build it up as a causeway with additional dock space. Phase one builds out the west causeway. The U.S. Army Corps of Engineers received an earmarked allocation of $250 million through the Infrastructure Investment and Jobs Act for construction of the west causeway extension. According to a letter from the U.S. Army Corps of Engineers they need to enter into a partnership agreement with the City of Nome and prior to going out to solicit bids on the construction the Corps needs to receive the non-federal share in the amount of $83.3 million from the city. Additionally, the Corps requires funding for moorage, utilities, road and other features on the causeway, currently estimated at $92 million. The letter says federal regulations require the city’s share to be made available prior to advertising of contracts and that $175.3 million are needed by February 2023.
Baker also reported that U.S. Senator Dan Sullivan included an amendment in the federal Water Resources Bill that would reduce the cost share obligation from a 65-35 ratio (65 percent paid by the Corps, 35 percent by the City) to a 90-10 split (90 percent federal money, 10 percent city obligation). “We have to see if we sign a 10 percent or 35 percent cost share,” Baker said. So, what if the provision is adopted and the City is on the hook only for 10 percent, does the City have to return the $175 million to the state, asked commissioner Drew McCann. Baker said that the latest cost estimates were from 2019 and that material costs have increased considering inflation and supply chain issues, for example, steel for sheet pile has increased 15 percent. She said the Corps is updating a cost estimate. But she said, the city has now enough money for phase one of the project.
Asked by Commissioner Gay Sheffield if the city has “other irons in the fire” to pursue funding, Baker said the port and city will talk with other entities on possible public private partnerships. Sheffield suggested again to have a joint port commission and city council meeting to be on the same page and to be informed of any potential negotiations or partnerships before agreements are signed, not after. “I feel concerned,” Sheffield said. “The bigger point is that the project is not just Nome, it’s going to affect the whole region. If I am struggling to learn what’s going on, I can only imagine what other communities feel. This will be a big maritime change,” she said.
“We are getting ahead of ourselves,” City Manager Glenn Steckman said. “There are no secret meetings, the project is still in design.” He said he included letters of support and interest in partnerships in the commissioner packets and that so far only Quintillion has articulated express interest in supporting the port’s expansion.
In other business, the commission discussed a solid waste reception facility complete with an incinerator. Commission Chair Jim West Jr. explained that in order to be classified as a regional port reception facility, the port has to have the capacity to take on trash. Baker said, the application for a grant to pay for the facility is only “the first bite out of the apple” to accept solid waste. The next step is to accept liquid waste, she said. The city’s Public Works department would run the facility, but the port would pay for building the facility, pay for the operating costs and the revenue from the facility would go back to the port.
In other business, the port commission discussed its lack of meeting procedures. The issue came up a few meetings ago, when a conflict-of-interest question came up and confusion arose on how to properly abstain from discussion or voting. Upon investigation, it became clear that the Port Commission, nor any other advisory panel of the City of Nome has identified meeting rules. Is it Robert’s Rules of order? No, City Manager Steckman said, the closest to meeting rules are those under which the City Council operates, which are set in code. He recommended the port panel adopts the rules and makes minor changes to suit the commission.
Under new business, the panel adopted the draft budget for FY23 to be forwarded to the City Council for final ratification.
The next meeting will take place on June 16.