Petersburg’s borough assembly Monday did not propose any major changes to a draft spending plan for the municipality. However, assembly members will consider spending cuts for the school district and mental health services Friday morning.
The budget is for the fiscal year that starts up in July and the assembly is on track for an earlier review and approval of the annual spending plan.
Finance director Jody Tow told the assembly the proposed spending plan is a balanced budget for the upcoming year. “It’s down from our current year budget by 1.5 percent,” Tow said. “If you remember our budget policy we need to maintain a fund balance between four and six months of operating expenses. And if you remember, we did transfer out 950-thousand dollars from the general fund this year. But we still estimate to have about 3.9 million going into fiscal year ‘16.”
The assembly transferred 950,000 dollars in budget surplus last year into a property development fund and later earmarked that money for the renovation of the police station and municipal building. The proposed spending plan would transfer an additional 200,000 dollars to that project.
John Havrilek commended the manager and finance director for setting money aside for the borough’s top capital need. “I just wanna commend Steve and Jody for doing that because we’ve made these capital projects a priority and if we’re not putting money towards ‘em that doesn’t say much about our priorities. So, I really appreciate you all doing that.”
Between state and local funding, the borough still is short about 3.8 million dollars for that near 10 million dollar project.
Tow said the budget anticipates property tax and sales tax remaining at similar levels from recent years. The borough is budgeting for 200,000 dollars in new revenue from the tobacco excise tax approved by voters last fall. The borough is also anticipating a 50-percent decrease in a municipal revenue sharing payment from the state that’s been around half a million dollars. Staff members are also anticipating no renewal of the federal program called Secure Rural Schools, a payment to counties containing National Forest land. That program has meant a million dollars or more a year to the municipality.
Borough manager Steve Giesbrecht explained the impact of losing that money. “Doesn’t pose a problem for us this year,” Giesbrecht said. “But this is obviously one of those conversation’s we’re gonna need to have with the school and the community as a whole to find out how to make up what amounts to 6-700,000 dollars a year in funding if these programs truly go away and stay gone. We’ll have to figure out before we use up that remaining two million, before we use that up, coming up with a solution on how to replace that or make adjustments.”
The borough has been using about 600,000 dollars a year of that money for an annual appropriation of 1.8 million dollars to the school district. The rest has gone into savings and the borough in 2014 had saved up just under four million dollars. Some of the Secure Rural schools funding has also gone to Forest Service projects on National Forest land, as well as local street paving.
The proposed budget includes money for other proposed borough projects, among them 350,000 dollars for remodeling the power and light department building downtown. There’s also 160,000 dollars for design work to replace the Rasmus Enge bridge and 350,000 dollars for resurfacing the city creek dam, the smaller of the two borough water sources. In addition, nearly 3 three million dollars in state loan and grant money will replace sewer lines and pump stations just south of downtown and in Scow Bay.
The budget reflects small increases in the cost of many borough services already approved by the assembly. That includes ongoing annual water and waste water, electrical rates and garbage. The assembly also will be considering additional harbor rate increases this spring.
Havrilek requested a special meeting on the community service grant portion of the budget. Those are payments to KFSK, Petersburg Mental Health, the Clausen Museum, and the local appropriation to the school district among other grants. Havrilek has been unsuccessful in prior years attempt to reduce those line items.
Cindi Lagoudakis questioned Havrilek about his intentions. “I just have a question of Mr. Havrilek, what outcome are you hoping for?”
“To have less funding for both,” Havrilek responded.
That portion of the budget is just under two million dollars. That includes 1.8 million dollars the borough has been paying annually to the school district since 2008.
The assembly voted 4-3 to hold a special meeting this Friday, February 6th at 8 a.m. to discuss the two items in the community services budget. That meeting will be for staff direction in preparing the draft budget. The spending plan will still be up for three approvals in ordinance form starting in March.