Petersburg may put aside some money for its top capital project priorities in hopes of attracting some state grant money. Local elected officials are still hopeful for capital project grant money this winter despite a gloomy budget outlook for the state government.

Petersburg finalized this year’s list of major construction project priorities earlier this fall and submitted the needs list to the state. The number one need remains a 10 million dollar renovation of the police station and borough office building. The borough has already received over half that amount from the state and is hoping for more this upcoming legislative session.

Petersburg's proposed $10 million renovation of the downtown police station and borough office building has about half of the funding needed for construction. (File photo courtesy borough of Petersburg)

Petersburg’s proposed $10 million renovation of the downtown police station and borough office building has about half of the funding needed for construction. (File photo courtesy borough of Petersburg)

Supporters of other projects on the long list are also hoping for grant money from the state.
Kimberly Kilkenny, president of the Petersburg Childrens Center, made her case for a 300,000 dollar expansion of the childrens center. Kilkenny said the facility has had a wait list for several years.

“This project would actually increase it so that we can take 20 more kids into our facility which is a very needed service in our community if we want new families to move here or to continue to work here,” Kilkenny said.

The childrens center and many of the other project on Petersburg’s priority list have yet to secure any borough or state grants. However, assembly members are talking about changing the way they approach public construction needs.

Assembly member John Havrilek wanted to set aside three to five percent of the borough’s general fund budget each year for capital projects. “But at least if we have that money in property development or wherever, we’ll have that to respond to the legislature,” Havrilek said. “And even if they give us nothing, we’re still putting aside funds for doing that number one priority. I’m not saying change the priorities or anything like that. I’m just saying be ready to pay for it ourselves and if the legislature gives us something, be ready to match it or be ready to do it.”

The local government may have some money to set aside this year in a property development fund that’s normally used for land purchases or improvements. Finance director Jody Tow reported that the borough has a revenue surplus of about 900-thousand dollars in the fiscal year that ended in June.
300-thousand dollars of that surplus is from increased sales tax revenue along with an increase in state revenue sharing payments to the new borough government.
However, Tow says 600,000 dollars of the surplus is a one-time thing – and stems from the timing of Payment in Lieu of Taxes funding from the federal government. That’s money paid to Petersburg because of federal land in the area that is not taxed. Because of the creation of the new borough and the way this money is doled out, Petersburg received two years of the federal payment in the same fiscal year.

Borough manager Steve Giesbrecht cautioned that putting aside borough revenue each year would have an impact on some services. “We’ll have to decide, and I’m not saying 900,000 dollars worth of services, but we’ll have to go into this saying we still have to have that contingency money there, if a boiler goes bad and now we’re gonna have to turn around and find a way to account for more savings,” Giesbrecht said.

Governor Bill Walker will be sworn in Monday December 1st and has until the middle of that month to draft his proposed operating and capital budgets. Because of the falling price oil, the state is facing a budget deficits and Walker promised during his campaign to make cuts to capital budget spending.

Mayor Mark Jensen, who participated in the Walker transition conference in Anchorage over the weekend, did not sound confident about state funding for Petersburg’s projects. “Our list has been formed and prioritized and it’s been sent in so it’d be kinda hard to change it now in my mind. And the governor has two weeks to come up with his operating budget. It’s probably going to be pretty grim. So I don’t think we’re gonna get anything from that.”

Typically, communities rely on state legislators to add in project funding during the capital budget process.

Petersburg’s assembly approved a new yearlong contract for the borough lobbyist in Juneau. Ray Matiashowski will get 42,000 dollars in the upcoming year to seek funding for projects and keep the borough appraised of important issues.

The assembly also agreed to continue the discussion about setting money aside for projects. That will be at their next meeting – and by the way, both meetings in December were moved back a week because of this month’s late meeting. The next borough assembly meetings are scheduled for December 8th at noon and December 22nd at 7 p.m.