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Council Unanimously in Favor of Port Tariffs and Regulations, Despite Debate Over Rate Effects on Users

With new members Adam Martinson and Doug Johnson sworn into office, the 2017 City Council poses together.
With new members Adam Martinson and Doug Johnson sworn into office, the 2017 City Council poses together. Photo: Davis Hovey, KNOM (2017)

Nome’s port tariffs have been passed, and over the side transfers of petroleum products will be further regulated this season.

During Monday night’s City Council meeting, Ukallaysaaq Tom Okleasik, as an employee of Sitnasuak Native Corporation, spoke in favor of the fueling regulations that are included in the new tariff ordinance.

“And making sure that there’s equity in the tariff structure and that you as a council make sure that we have policy in our city that promotes onshore investment. Onshore investment such as Sitnasuak has made through Bonanza, but also future investment in an Arctic port and all the additional onshore services that come with that.”

Councilman Jerald Brown said that he understood why Sitnasuak would be in favor of this ordinance, and if passed without changes, it (the ordinance) could be seen as limiting other business in Nome’s waters:

“We are, in effect, restricting free enterprise, restricting the exercise of free enterprise. We are saying that only Sitnasuak basically, ‘cause Crowley isn’t really a player at the Port, that we are advancing the notion that we are in favor of a monopoly for fuel cells.”

Okleasik said he wouldn’t characterize the situation like that and reiterated his view that this tariff ordinance would encourage investments in the local economy and boost onshore infrastructure. Councilman Stan Anderson questioned if he was in favor of a slight rate increase included in the ordinance, which was originally proposed to be higher, at 3%. Okleasik responded by saying “it’s a good compromise.”

Nome resident and port user Judy Martinson weighed in by saying there’s already a monopoly that exists in Nome’s waters, as her vessel has a difficult time finding dock space to refuel during the summer months.

“And if it were not for Lucas and his good staff, I would venture to guess that a lot of people would lose a lot of work hours, because you cannot get on the wall to get fuel. We have to spud out at extra cost and wait, and then when they clear boats away or whatever, then eventually you can get to the wall, and you can get your fuel, and then you can go back to work. But you are definitely inhibiting commerce by what you’re trying to do here.”

Another Port Commissioner, Scot Henderson, who also works for Bonanza Fuel, a shore-based fuel operator at Nome’s port, addressed Martinson’s concerns by explaining that fueling can happen almost anywhere a boat can tie-up.

“So everybody understands, there are two shore-based fuel operators that operate in the Port. We both have trucks; we both have access to pipeline fueling. I can tell you with one-hundred percent certainty that there is very intense competition between both entities for the shore-based fuel business. So I just want to clarify that these changes will in no way, shape, or form be creating, or supporting, or strengthening any kind of monopoly in Nome, because it simply does not exist.”

Henderson then addressed the letter from Vitus Energy which asserted that the tariff ordinance would lower sales tax revenue for Nome. The Port Commissioner doesn’t feel this will be the case, because the ships that require additional services besides fueling will want to continue to refuel in Nome, regardless of who the vendor is that gives them fuel. And if there are vessels that have no reason to come to Nome other than for fuel, then they will most likely continue to refuel offshore using Vitus.

Port Director Joy Baker explained that the tariff ordinance would only round up or add less than 1% increases to some of the existing rates, unless the Council wanted to make amendments.

“The tariff you have in front of you is all of the language changes and only a few rate changes that are described in the memo, which was just some line-handling fees and rate rounding. There was no rate increase. If you passed what is in front of you, there is no technical rate increase. If you were to amend what is before you for a specific rate increase, it would have to be separate.”

Nome’s City Council then decided unanimously to pass the port tariff ordinance as it stood, without making any changes. All other business on the agenda passed as well, including another Port-related item.

Before adjourning the regular meeting, the Council approved Mayor Richard Beneville’s recommendation to appoint Gay Sheffield to vacant Port Commission seat F. Sheffield was chosen over three other applicants to serve as Port Commissioner.

The City Council is scheduled to convene again on April 9th for its next regular meeting.

Image at top: file photo: the Nome City Council, October 2017. Photo: Davis Hovey, KNOM.

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