Council approves $11.3 million budget for Nome Joint Utilities

The Nome Common Council Monday unanimously stamped “approved” on two action items—one, next year’s budget for water and power operations, the other, municipal land disposal in a three-month lease for a house rehab job on Kings Place.
The Council unanimously approved the 2018 operations and maintenance budget for Nome Joint Utility System. This sector of City government provides electrical power and water to Nome’s residents and carries away wastewater, garbage and sewage.
NJUS administration has been working on the budget since January, with work sessions with the City. According to Nome Code of Ordinances, the Council has the authority to approve or disapprove all NJUS budgets.
The spending year 2018 budget predicts revenues of $12,217,115 and operation and maintenance expenses prior to non-cash depreciation of $11,258,708, leaving a net operating margin of $958,408.
According to a detailed business plan by John K. Handeland, utility manager, NJUS last updated power rates in August 2015 and a change in water-sewer rates effective in November 2016. Due to lower fuel rates from the summer 2017 purchase, NJUS recalculated the fuel surcharge and reduced the rate effective in October 2017.
Based on projections for both sales revenue and expenses for 2018, the plan does not propose or require any base rate increases to meet the 2018 operating budget or debt service needs. However, fuel costs are trending higher toward this summer’s supply purchase, which if it occurs, will result in a higher fuel surcharge this fall.
Future rate changes are not off the table, according to Handeland, due to demands of water and sewer system upgrades needing to be addressed. While NJUS staff continue to look for grant funding opportunities, the drying up of the Alaska Dept. of Environmental Conservation Municipal Matching Grant Program would likely require NJUS to finance replacement of systems through loans beginning in 2018-2019, and servicing this debt will require consideration of rate changes in the future, according to Handeland.
The Council introduced and passed onto second reading on a subsequent Council meeting agenda an ordinance that would lease Lot 5A, Block 50, to Jessica and Howard L. “Chugie” Farley for three months at a cost of $1,500. The City determined the market value of the approximate 2,900 square feet at around $0.05 per square foot per week.
City law allows use of the property for the furtherance of the development of local trade or industry, specifically, the rehabilitation of a dilapidated structure into much needed residential housing. The Farleys need the property for lay-down space for a job to upgrade the former Gil Pelowook residence at 103 East King Place, a property formerly on the City’s abatement list.
In final business, Mayor Richard Beneville reappointed Katherine G. Scott to Nome Library and Museum Commission, with Council approval.



The Nome Nugget

PO Box 610
Nome, Alaska 99762

Phone: (907) 443-5235
Fax: (907) 443-5112

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