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Nome City Council Debates Millions From CARES Act, Drops Seasonal Sales Tax

Photo from Emily Hofstaedter, KNOM (2020).

Right now, the City of Nome is looking at a potential budget shortfall of about one-million-dollars. But Tuesday night, during the City Council’s regular meeting, they discussed ways that federal CARES Act money might be used to soften the blow.

Nome has been allocated more than $5.6 million from the state in federal CARES Act money to reimburse their COVID-19 expenses: including salaries for the City Clerk, police department staff, and even the City Manager, who have all spent many hours on pandemic related responsibilities. The money can also be used for applicable capital projects, like to pay for infrastructure to televise public council meetings.

Some councilmembers inquired whether the funds can be used to help local businesses that were hurt by the pandemic. They can, explains City Manager Glenn Steckman, but the city must have a way of showing those businesses have been financially impacted and he doesn’t want to put that burden on city staff.

“People are already saying we’re asking [them] for too much information as it is, and I don’t want to put the city staff out with a bullseye on their back.”

Councilmember Jerald Brown directed city staff to draft a declaration of Economic Disaster, that would be necessary for Nome to use CARES Act funding to help businesses impacted by the COVID-19 pandemic.

One aspect of COVID-19 relief that the council agreed on unanimously was the seasonal sales tax cut.

The council moved forward with the ordinance to repeal Nome’s seasonal sales tax of 7% for summer, 2020. This summer Nome merchants and residents will only need to pay a 5% sales tax.

Tuesday’s meeting also included the first reading of the city budget, however, those numbers were calculated with a lot of unknowns, according to the City Manager. They do know that so far, they are down about $102,000 in sales tax revenue for the months of March and April, compared to the same time last year.  

What has been lost in hotel and restaurant tax revenue is being partially made up in grocery and online sales. The council voted unanimously to move the budget onto the second reading. The city budget put forward on Tuesday did not take the reduced seasonal sales tax into consideration.

Manager Steckman is hopeful that CARES Act funds can be used for many policing costs as NPD is one department where the city is not planning on making cuts to spending. Currently the fiscal year 2021 budget does include money to hire a second investigator in the Nome Police Department who would primarily handle historical sexual assault cases.

During citizen’s comments, the council continued to hear from disgruntled residents and non-residents who were unhappy with Nome’s quarantine practices. Those practices have been changed but citizens said the updated travel form wasn’t accessible online and some felt that the language of the emergency order was still unclear. Steckman did admit that as of Tuesday those forms were not yet updated on the city website.

Most comments were from residents who have been speaking against the travel restrictions for weeks, but there were also some new voices.

Dani Smitheisler of Nome had to travel for last-minute medical care and said the permitting process nearly caused her to miss her appointment. She urges the City of Nome to stop requiring travel forms that the state does not.

“Everyone has a different situations, they have reasons to need to travel and leave Nome.”

And Smitheisler questioned the use of the forms, since the Department of Public Health has said the information gathered on those can’t be used for contact tracing.  

Manager Steckman maintains that the travel forms are for public education and to clarify city expectations, as well as to help enforce state mandates for interstate and intrastate travel. Recently, the City of Nome decided to give travelers different quarantine options. Travelers coming from Anchorage can now do a seven-day quarantine, if they test negative upon arrival and again at the end of their seven days.  Travelers from out of state are still expected to quarantine for 14 days as per state mandates.

The City Council chose to keep the emergency order in place, but Councilmember Jennifer Reader struck language from the order that said the travel forms could be used for contact tracing.

In other business, the council approved a contract with current acting police chief Mike Heintzelman, naming him as Nome’s new Chief of Police.

The next regular meeting of the Nome City Council is scheduled for June 8th.

Image at top: Councilmembers Jerald Brown and Mark Johnson during Tuesday night’s Nome City Council meeting. Both have been sporadically serving as interim Mayor during regular meetings recently. Photo from Emily Hofstaedter, KNOM (2020).

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