Port funds to earn interest while Corps “recalibrates” bidding

The delay of the Port of Nome expansion project due to the U.S. Army Corps of Engineers’ cancellation of the bidding process in October has created an opportunity for the City: some of the money waiting to be spent on the project can now be parked in an account, earning interest while the Army Corps “recalibrates” the bid to try again attracting contractors to build the Nome Port expansion project. In last Monday’s regular Nome Common Council meeting, the council gave its blessing on a resolution to open a bank account with Northrim and to deposit about $80 million in the account to see it grow.
The City as the sponsor of the project is obligated to a 10 percent cost share of the federal portion of the expansion – basically the rocks that create the causeway and the spur removal. The roads, surfacing, docks, electricity, service lines and fuel headers are not included and the city is to pay for 100 percent of these so-called Local Service Facilities.
The city has received funds from the state to pay for the first phase and had transferred the required money to the Corps, only to find out that the construction of the first phase is delayed due to the canceled bidding process. Mayor John Handeland said the Corps’ new target to start the bidding process again is February 2025. Interim City Manager Brooks Chandler explained that the partnership agreement between the city and the Corps has a provision that allows the city to put the money in a sort of escrow account where it can accrue and earn interest. Only the Corps can take out funds from the principal amount, but the city can use the interest earned and must spend it on the port project. Handeland said that the interest would come out to be roughly $300,000 per month. Chandler mentioned how hard it was to find a bank that would be willing to open such an account and announced that the local Northrim bank has been chosen as the bank. On Monday the Corps approved of the agreement with the bank and funds were transferred.
The council unanimously voted to approve the resolution.
In other business, the council passed a resolution to pay $85,000 to contractor PND to reduce the scope of phase 1 for local service facilities. The modification in design is funded by a 2023 State of Alaska grant awarded to the City of Nome.
 The council also passed a resoltuion to use the 2022 and 2023 Community Benefit Share from NSEDC totaling $250,000 for Nome Swimming Pool repairs ($100,000), for a new oven at the XYZ Senior Center ($14,000) and for renovations of the Rec Center’s saunas and locker rooms (estimated $136,000).