Petersburg borough officials presented a balanced spending plan to the assembly this week. The review process for the budget is underway and will run into late April. However, the borough assembly may be forced to revisit the municipality’s budget after the state legislature gets through with its work this session.

Spending in the borough’s general fund is expected to be at 9.6 million dollars in the fiscal year that starts in July. That would be a decrease of almost 12 percent from the current year, although a lot of that drop in spending is from money set aside last year for the police station and municipal building renovation project.
city hall
Finance director Jody Tow explained the proposed budget to the assembly Tuesday. “This budget is based on what we currently know or have been told regarding the state of Alaska’s budget,” Tow said. “The state most likely will not have their budget approved before the new fiscal year begins. Once the state’s budget is finalized, we may be doing a supplemental budget to make changes or budget cuts to account for any state cuts in borough and/or school funding.”

The money expected to come into the general fund next year is down just one percent from this year. The borough is expecting a decrease in revenue sharing from the state, along with a 40 percent cut in the amount the state pays Petersburg for operating a jail.

Revenue from property tax and sales tax is projected to remain relatively flat. The borough’s new tobacco tax is projected to bring in 226,000 dollars in the upcoming year.

As for spending, some areas in the general fund, like the borough assembly, information technology and community services would see an increase from the current year. Other departments like administration, the attorney, police, fire, public works, the library and parks and recreation would see spending cuts.

Local resident and library board member Barbara Fish questioned those reductions. “Looking at the proposed budget what was the criteria for decreasing or increasing the amount of the expenditures for the different departments?,” Fish wondered. “I noticed that some are a lot lower than the year before and some are higher. And specifically the library and parks and recreation are a lot lower in expenditures. And at the library board we have talked about the budget but I was just curious what the criteria is.”

Staff explained that the levels of change are dependent on each department. The assembly on Monday will be digging deeper into the funding requests for one area of the general funding, community services. That’s an area where spending would go up with the proposed budget. That includes an increased funding request from KFSK radio along with a new funding request by the domestic violence advocacy organization Working Against Violence for Everyone.

Tow highlighted those funding requests. “I’m going to provide more information on Monday but just to get you thinking, the Clausen Museum has requested 42,000 out of the general fund budget, Petersburg Mental Health Services $85,000, KFSK $19,000, Mountain View food services $12,000. Those are currently in the general fund balanced budget. WAVE just a week or two ago requested money, I’d already put the budget out. So that’s another item that the assembly is going to have to consider.”

The borough’s enterprise funds include the local utilities and the harbors and are mostly supported by the rates charged for those services. Some, like the water, waste water and sanitation, have small rate increases in the upcoming year already approved by a past city council.

The largest capital project on the list is the borough’s top priority – renovating the police station and municipal building. The budget also includes some new capital projects. The borough plans to replace lighting fixtures in the swimming pool. Another new project would mean clearing trees along the penstock for the Crystal Lake hydro plant and building a rough gravel access road along that pipe.

Another project would repair the dam at City Creek contingent on a federal loan. That loan would require local voter approval. And the waste water department is planning to start composting as a way of disposing of sewer sludge.
The assembly is just starting their review of the spending plan.

Kurt Wohlhueter commended the department heads for trimming their budgets. “At some point I’m sure we’re gonna get a comment from the public that our budgets are just too low now, it’s totally unacceptable, the services need to increase,” Wohlhueter said. “But in the meantime I think we’ll just keep kinda going where we’re going and I appreciate the manager and everybody for all their diligent work.”

Mayor Mark Jensen agreed and noted the uncertainty with state funding levels. “I think in the back of all of our minds we’re wondering what the final cuts are going to be from the state and if Jody’s already got it figured out we’ll have to possibly have a supplemental budget hearing.”

The assembly will not be considering the actual budget ordinance until March 21st. The ordinance takes three readings and could be approved by April 18, the day after the legislature is scheduled to be done with its work.