Petersburg residents will likely be seeing some reduced hours and fewer staffers in borough departments over the next few years. Petersburg’s borough manager is directing department heads to look for spending cuts in preparing their budget for next year. That’s in anticipation of another drop in state funding.
Borough manager Steve Giesbrecht sent out a memo to department heads in August setting a goal for next year’s spending. For borough services in the general fund, things like police and fire, the library, parks and rec, administration and public works, that goal is last year’s spending level plus five percent. That would represent a reduction from the current year and it could mean cuts in services, or even layoffs.
Giesbrecht said the borough absorbed losses of 200-300,000 dollars in state funding last year and anticipated the state reductions could be worse in the upcoming year. “We’re approaching it from the standpoint that it’ll be worse than last year and that we’ll have to be a lot more aggressive in identifying ways to reduce our budget,” he he said. “Now what those are gonna be we don’t know yet.”
Giesbrecht said ultimately the tough decisions will be up to borough assembly and he hoped they’ll be seeking input from the public during the decision process over the next year. Ultimately, he expects some reduction in borough services because of cuts to state funding. “At this point it sure appears, I mean low oil prices seem to be there for quite a while, low production seems to be there for quite a while and we have to kind of approach this from a standpoint of a new way of operating,” Giesbrecht said. “And it’s going to be some pretty substantial changes to how we fund our general fund budget.”
Some local advisory boards are already starting the discussion about what budget cuts would mean for office hours and programs.
The assembly will consider a budget policy in November, setting spending targets then. They wont be reviewing draft spending plans until the until the late winter and early spring. However, Giesbrecht expects that, like last year, the borough will have approved a budget well before the state legislature decides on funding levels.
He noted there are some areas he expects to see cuts to payments from the state. “You know we have some serious doubts about community revenue sharing which is a state program and also the remainder of the community jail program which is left. I think if I had to target the two areas that we are most likely to see reductions it’s in those two. You add those two together were getting pretty close to $700,000 in one fell swoop if the state chose to get rid of both of ‘em. It’s a pretty healthy chunk of money that we would have to figure out how to come up with, in some fashion or cut.”
There are a couple other pretty large question marks in the borough budget. One is the future level of state funding for public employee retirement systems and whether municipalities will be asked to pick up more of the cost of employee pension payments. Giesbrecht noted another unknown is the future of state funding for schools, with Ketchikan’s court challenge of the required local contribution for organized cities and borough’s. That case is before the state supreme court.
The manager expects another funding source for the schools, the federal payment called Secure Rural Schools, will eventually end. That program received a two year re-authorization last year. “I think based on what we’re hearing from our lobbyist at the federal level is that secure rural schools is destined to go away. We’ve been hearing that for a very long time I think the community’s probably tired of hearing it. I know the schools always tired of that conversation because it affects them in such a big way.”
Because the borough has squirreled away some of that money instead of spending it right away, Petersburg has some lag time between the time the payments stop and the municipality is left looking to fill in a 600-thousand dollar hole in the annual local school contribution. But that’s also a conversation Giesbrecht says needs to happen, as well as how to fund to replacement or repair for the aging hospital building.