Council looks at in-harbor fuel transfers
In a work session before the regular meeting of the Nome Common Council Feb. 12, Joy Baker, port director, laid out an issue for Council consideration concerning fuel sales at the Port of Nome.
The Nome Port Commission was to meet Feb 15 during which session the panel would adopt the 2018 port tariff. The tariff will come before the Council for ratification after it is adopted by the Port Commission.
It seems that last season, fuel vendor Vitus Marine had fueled vessels in the port by taking a hose from their vessel across the deck of the recipient to fill their fuel reservoir in an over-the-side fuel delivery. Other vessel owners were buying fuel from barges offshore. Baker declared an intent to bring Council into the loop before the Port Commission included a remedy in the port tariff.
The over-the-side transactions meant that Vitus was not paying the same port fees as onshore local businesses, like Bonanza Fuel, for example, putting the local vendors at a disadvantage. According to the work session discussion among port commissioners and Council members, the practice was unfair to local businesses who paid sales tax and wharfage fees to bring in fuel and also take it across port to send fuel elsewhere.
Tom Okleasik, vice president of corporate affairs at Sitnasuak Native Corp, owners of Bonanza Fuel, reminded the Council that SNC had paid significant amounts of property tax for many years, which benefitted Nome’s economy, on top of activities that amounted to a heavy investment in the port and produced jobs.
The competition was chilling infrastructure development onshore, some said. “Do we want to take away the incentive for onshore infrastructure investment?” Okleasik asked.
The group reached the consensus that offshore vendors should pay taxes and fees to equal or exceed the amounts paid by Bonanza and other on shore vendors, or be cut off from vending off the side to vessels.
Vessel operators are tending to buy fuel offshore as fuel is a big ticket item, said Scot Henderson, manager of Bonanza Fuel, The purchase of cheaper fuel offshore plus the 7 percent seasonal sales tax Bonanza has to charge are hurting Bonanza’s business, Henderson said.
The Port Commission will deal with the issue and bring a solution back to Council for approval in the port tariff package, Baker said.
Fuel transfer and delivery was risky at best, Henderson said, adding that a solution should not encourage off shore transfer while vessels bob on the waves.
Vessel operators taking on fuel would be responsible for any spillage, Baker said. “Yeah, but it would end up on our beach,” Councilman Lew Tobin said. If over the side transfers are deemed too risky, barge-to-barge transfers of bulk fuel will also be subject to consideration and a decision, Baker said in a memo to Tom Moran, city manager.
The work session also heard from Shawn Arnold, Nome Public Schools superintendent, who went through the draft Nome public schools budget, highlighting cuts in staff travel and allowances for substitute teachers. The school budget process has eliminated two certificated teacher positions, cut the librarian and reduced the music program, cut four aides and a behavior specialist as well as one social worker and the summer school program. All after school activity bussing has been eliminated. Some cuts may be restored when final funding figures are available.
In other business, the Council:
• Passed a resolution authorizing the City to enter into an agreement for the execution of a ground-penetrating radar survey at the Nome Municipal Cemetery. The bid was awarded to Logic Geographics for $67,870. The goal of the survey is to locate current burials and establish a plot location plan for future burials.
• Passed a resolution proclaiming February 2018 School Board Recognition Month to honor the contributions and service of the Nome Public Schools Board of Education.
• Heard that Troy Miller has been selected to be City of Nome Employee of The Month.