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City Council Scuttles Aircraft Tax, Puts City and Utility Employee Contracts on Hold

A close-up view of Nome Joint Utility System documents and letterhead.

Contracts for City of Nome employees and utility workers have been tabled after City Council members demanded more information on just how much money would be needed to pay for raises, overtime, and healthcare costs.

The city was set to consider four labor contracts at Monday’s City Council meeting—three with unions for public employees, engineers, and electrical workers at the utility, and a fourth for city employees—but, from the start of the meeting, council members Stan Andersen and Matt Culley said they wanted to know more about just how much the raises and benefits would cost.

According to City Manager Josie Bahnke, the contracts have already been through several rounds of negotiation with the city and the employees, were previously approved by the Nome Joint Utility Board, and have been presented to the council in prior executive sessions. But after reiterating requests for more information and explicit numbers, council member Matt Culley said his questions remained unanswered.

“We’ve been keeping the council up to date with what the status of our negotiations are, and these all would have been great questions to ask during that process, [but] to get to tonight and start asking …” Bahnke said.

“I’m not going to let you throw the shoe on our feet on this one,” Culley interjected. “I asked right from the get-go that those [figures for overtime and paid time off] are things that need to be looked at. Don’t say we didn’t ask, because those are the first things I brought up when we talked about this.”

Culley added, “I asked, I just never heard back.”

Culley said the contracts, in general, seem acceptable, but he insisted on firm estimates for costs like overtime, especially from Nome Joint Utility, which is already on uncertain financial footing in the wake of a $2.2 million emergency line of credit from the city.

“I see [the city’s] numbers sitting here,” Culley said. “NJUS doesn’t have those numbers in front of us, and they’re the ones in a fiscal crunch right now that’s significant, and I want to see that.”

City Manager Bahnke countered that a comprehensive ballpark figure for the contracts had been given in the council packet and at prior sessions. She argued a delay would punish city employees by leaving contracts in limbo going in to 2015. Council member Stan Andersen disagreed.

“City employees are getting penalized,” Bahnke began.

“They’re not getting penalized a bit,” Andersen said tersely. “You look back on all the wage increases they’ve gotten.”

“Well, our contract is on time, and you have the information,” Bahnke replied.

Later, Andersen said, simply, “I want the council to have all the information in front of it.”

The contract debate continued along similar lines throughout the night, and the council ultimately tabled a vote until council members got the information they requested. That vote should come at a special session next week.

But what about city efforts to bring in more tax revenue? After previous proposals died on the table, only one remained: tweaking city code to allow property tax to be collected on aircraft. Jim Hickerson, the president of Hageland Aviation who also works for Ravn Alaska, told the council the tax proposal was largely uncertain for businesses and aircraft owners.

“From the industry standpoint, we have no idea what the impact’s going to be to our business,” he said. “We’d like to encourage the council to have more work sessions to work that out.”

City Clerk Tom Moran noted that, much like how snowmachines and boats are currently taxed, removing the aircraft exemption on property tax would require self-reporting on the aircraft’s value. It was still unclear how any such tax would impact commercial operations like Alaska Airlines.

Council members suggested various approaches to make the tax work, including multiple tiers for private and commercial aircraft, but in the end, the aircraft property tax failed to get enough votes to move forward, and like past council efforts to find new tax revenue for the city, it also died on the table.

Finally, John Handeland and Barb Nichols approached the council as concerned residents looking for support in the community’s struggle with illegal drugs. They requested that “drug education, awareness, and treatment” be added to the short list of the city’s top priorities set to go both to Congress and before the state legislature.

“We’re all aware there’s a problem, an epidemic, I would say, in our community. And putting it on the city’s priority list would be a real good idea,” Handeland said.

“While nobody’s asking the city to fund anything, it will certainly be a help moving forward to have that listed as a priority with the city,” Nichols added.

The council approved the request, symbolic if only for now, absent a request to fund a specific program or initiative.

The city council will take up the utility and city employee contracts at their next meeting: a special session set for Tuesday, Dec. 16.