The Nome Joint Utility System now has the finances to pay for diesel fuel, thanks to the passage of two resolutions by the Nome City Council late last week. At a special session on Friday, the Council met to approve a loan between Wells Fargo and the City of Nome.
The City will provide NJUS with up to 4.6 million dollars at an interest rate of 2.68 percent per year. That’s lower than last year’s interest rate of 2.95 percent.
A second resolution that passed Friday secured an agreement for NJUS to pay back the loan directly to the bank. Utility Manager, John Handeland, stated why this agreement is needed in the first place. “This resolution puts in place a security and pledge agreement between the City and the Utility, which is primarily a backstop in the event the Utility could not make the payments.”
This is a transparent way to reassure people that there’s always dollars in the account; Handeland says, “this year, the payments are coming directly from the Utility accounts. We have set up a separate account so that we can show everybody that the payments are available.”
Wells Fargo required a credit guarantee from the City of Nome this year due to some payment problems with NJUS last year. That’s more than enough reason for Councilman Stan Anderson to oppose NJUS making payments independently without the City. He says “after the last go-round or the last couple of years, I’m not willing to do that.”
The first supply of 2.2 million gallons of fuel will be brought to the Nome Port by Vitus Marine between July 20th and 25th.
A third and last resolution at Friday’s special session will allow the City to apply for a matching grant from the Alaska Department of Environmental Conservation to help with water and sewer infrastructure improvements.
The next regularly scheduled City Council meeting will be held on July 11th.
