Boats tie up to the net float near Petersburg’s Middle Harbor in May 2018. (Joe Viechnicki/KFSK)

Petersburg’s borough assembly last night voted down changes to the proposed budget for the fiscal year that starts in July and passed that budget in its second of three readings. Assembly members also gave the first of three approvals to an increase in fees for harbor users.

Assembly members proposed changes to the proposed spending plan but didn’t have support from their colleagues. In one change, Eric Castro wanted to divert half of the money the borough collects in a local tax on tobacco to “health related functions.”

“I would like to see this go into a special fund, not just the building fund for the hospital that could be used into operating expenses but something where that if we forget about this thing four years down the road we all of a sudden find nearly a million dollars in a special fund that going to be dedicated toward a new hospital, I feel that that would be a great use of this money,” Castro said.

The borough expects to bring in about 230,000 dollars from that tax in the upcoming year, half of that is 115,000. The money goes into the general fund and along with other taxes helps pay for operations of the municipal government. Borough staff noted that the 115,000 would have to be made up elsewhere in order to balance the budget, either with cuts in spending, increased taxes or other budgeting changes.

Mayor pro tem Jeigh Stanton Gregor questioned the vague language of Castro’s proposal.

“If we were to be able to allocate this directly into a fund that we could see mature and grow that say if it were toward the future hospital construction project, is kind of more along the lines of… because yeah, the vagueness of health related functions does kind of throw me off as well,” Castro said.

That amendment was voted down 6-0. However, Castro sounded interested in coming back next meeting with more specific language for use of that money.

Another change was proposed by Jeff Meucci. He tried again to restore full funding to the Clausen Museum, adding 21-hundred dollars to that line item and taking that money from the assembly’s travel budget. He was the only one in favor of that change and it went down 1-5.

Another change that failed was to remove a two thousand dollar place-holder bonus for people overseeing borough departments. The borough is planning to give out one time payments of up to 2000 dollars, depending on how the salaries for those positions compare to similar jobs in other Alaska communities. Kurt Wohlhueter proposed cutting those bonuses for now.

“I don’t mean any disrespect for the department heads but I just think it would kinda clean things up a little bit until we get these other union negotiations clarified,” Wohlhueter said.

The borough and both union representing borough employees have yet to agree on new three-year contracts. Two separate bargaining units have voted down tentative agreements this year. Brandi Marohl joined Wohlhueter in supporting that amendment but it too failed 2-4. The budget itself then was approved in second reading by a 6-0 vote with mayor Mark Jensen not at the meeting. It has one more reading before it becomes the spending plan for the borough. But the assembly can pass a supplemental budget and make changes anytime during the year with three readings of an ordinance.

The budget includes a nine percent increase in moorage rates for the harbors and around a 12 percent increase in most other fees in the harbors. The assembly passed the ordinance to enact that increase with little discussion. It takes two more readings before taking effect, which could be as soon as July.

(Editor’s note: this story has been corrected to show budget ordinance was in its second of three readings.)