Nome council weighs new taxes, fuel tariff and fee changes as part of FY27 budget talks

Nome’s City Council spent its work session probing options to close an anticipated FY27 shortfall and stabilize city reserves, reviewing staff projections and several new revenue concepts that would require further legal and public review.

City staff presenter Nikki, who led the budget walk-through, said the FY27 general fund working document projects about $19.6 million in revenue after recent adjustments. She reported a $165,000 increase in sales-tax projections tied to fuel/utilities assumptions and an $86,500 bump in remote-seller sales tax; staff also noted a $360,000 passthrough increase tied to a fee billed and remitted by the local utility, NJUS.

The meeting turned to potential special revenues, including a council-discussed proposal for a 6% special tax on alcohol, tobacco and marijuana. One council member described annual revenue estimates ranging from about $500,000 to nearly $900,000 depending on calculation method and base; staff cautioned any change would require a referendum and stepped-up public education before it could appear on the ballot. “If you say 6% based on the retail part…people are not gonna understand that,” a staff member warned, urging a simple retail-based approach for clarity.

Council members also discussed a fuel tariff concept that would exempt fuel from point-of-sale sales tax and instead charge a per-gallon tariff assessed when fuel is imported into Nome at the port. A council member explained the concept as a way to make fuel-related revenue easier to predict using port-import records: “So under the current sales tax code of 6%…the sales tax that most customers pay per gallon of fuel is 36¢. … But instead, a 36¢ per gallon tariff would be charged on all fuel brought into Nome,” the council member said, adding any tariff design should avoid raising pump prices for consumers.

Staff described the complexities of applying a similar approach to utilities, which use fuel to generate power rather than resell it. The council asked staff and the city attorney to hold a targeted work session this summer to walk through legal and implementation issues for the tariff and other options.

Landfill fee increases also drew support in discussion: council members noted the fee had not been adjusted in decades and that a council action (ordinance or budget resolution) would be needed to change billing. Staff said additional detail from NJUS on the passthrough charges is pending.

The session covered broad expense adjustments: elimination of a proposed assistant city manager position (reducing administration costs by about $106,277), removal of a part‑time building inspector (-$74,447), higher placeholders for fuels and utilities (5–7.5%), and higher police training costs to support multiple academy recertifications. Capital transfers include placeholders for heavy equipment (loader, dump truck) and a $5.5 million placeholder tied to a pending deep-draft port grant.

Staff said many options will require further analysis and that midyear revenue performance could reopen hiring questions: “What I would like to do is see where we get this year on revenue…If there’s something there then to come into the winter and come back to you and say, okay, I can bring the other one on,” the city manager said.

Votes at a glance: the council approved a procedural amendment to the agenda and the April 13 meeting minutes, and formally adopted Resolution 26-4-03 declaring May 5, 2026, Missing and Murdered Indigenous People Awareness Day (see 'Votes at a glance' provenance below).