Petersburg’s borough assembly Wednesday dug into the details of a proposed spending plan for the borough government for the fiscal year that starts in July. Some on the assembly signaled their desire to make spending cuts regardless of decisions on funding by the state government.

Borough staff proposed the draft balanced budget with general fund spending at more than nine and a half million dollars, an increase of over one percent from the current year. The borough manager calls the spending plan a “place holder” that he expects to revise once state funding to the municipality is certain.

Finance director Jody Tow voiced some concern that spending is increasing and one of the general fund’s main revenue sources is nearing its limit.

“Well it’s a concern just because we’re so unsure about the state’s budget,” Tow told the assembly. “We’re worried about our flexibility. We’ve had to use more property tax to balance this budget. And so that, you know we have a cap of ten mills and so we’re almost to that cap. So we’re going to have to figure out some other ways to balance this budget. You know usually we use property tax as you know the final number to balance and we won’t be able to do that soon.”

By charter, the borough can only charge up to 10 mills of property tax, not counting tax for voter approved projects. 10 mills is the tax rate of ten dollars on every 1000 dollars of assessed value for land and buildings. The proposed budget would increase the property tax rate increase of .4 mills. The assembly sets that rate each spring. The property tax rate could be raised further for service area one, if the state stops debt reimbursement for school projects as proposed by the governor. That money annually is over 469,000 dollars.

The borough still has around three and a half million dollars in school project debt including interest remaining. Tow explained that Petersburg was in a relatively good place with debt compared to other municipalities.

“I point that out too because there’s a lot of communities that have just issued bonds you know that have 20 years left that I have no idea what they’re going to do in their community,” she said. “It doesn’t seem like we’re that lucky but we are kind of lucky that the end is in sight.”

The first of three bond issues for the swimming pool will be paid off in 2021. Other local bond debt will be retired within the next decade.

Another big question mark is whether the state will eliminate or reduce payment of raw fish tax revenue to the municipality. That move could force spending cuts in the general fund and would impact harbor department reserves for projects.

The borough expects costs for health insurance to increase around 14 percent for the upcoming year and is also budgeting for one percent salary increases for employees. Those were agreed to in labor negotiations. Department heads, who are not represented by unions will also see those wage increases.

The budget flat funds the school district at one point eight million dollars. It would cut grants to community service organizations, KFSK, Mountain View food service, the Clausen Museum and Chamber of Commerce by 10 percent. To help balance the budget, the borough has removed money for unforeseen expenses. Mayor Mark Jensen highlighted that spending might have to be added back in.

“So we don’t have any contingency money. And normally we budget 80,000 dollars?” Jensen asked.

 “Yes,” said Tow.

“And we generally use half, “ Jensen asked.

“Yes,” replied Tow.

“So we could be looking for a 40,000 dollar supplemental if things continue historically?” Jensen wondered.

Yes,” said Tow.

“We’d have to come back to assembly and ask permission,” borough manager Steve Giesbrecht responded.

“So that could be another 40,000 dollars added to the budget,” Jensen said.


By personnel, the largest departments for the borough are assisted living with the equivalent of nearly 17 full time jobs while the police and jail have a combined 14 positions. Overall the budget as drafted includes funding for the equivalents of just under 90 jobs, although a number of those are not currently filled.

Assembly member Jeff Meucci wanted to make spending cuts.

“I mean that’s what I want to do I want to reduce the budget,” Meucci said. “You know I’ve talked about privatizing parts of public works, privatizing part of the sanitation department. I mean how do we get ideas in to the budget, to reduce the budget. I mean I’m all for, I don’t want a balance budget, I want a reduced budget. That’s what I want personally.”

Assembly members can propose changes to spending at any time during the assembly’s three readings of the budget ordinance. Cuts or additions need approval of a majority of the assembly, or four votes. Borough manager Steve Giesbrecht said staff would look into privatization if the assembly voted that way.

“Again it’s not apples to apples but we used to use an outside contractor to pick up recycling,” Giesbrecht said. “And it was a lot more than paying our own people to do it. My guess is snow removal would be pretty similar. Don’t know that. Clearly if four members of the assembly say hey, go get proposals to do our snow routes, then that’s what we’re going to do.”

Giesbrecht explained the driving force behind spending in the borough was mainly personnel costs.

“Again I’m not saying that’s not an idea worth looking into but it’s going to come down to people,” he said. “And it’s also going to come down to services. What is the community going to accept. You know, I suggested, eight hours from the library’s schedule and eight hours from Parks and Rec and this room was full. And that’s, ladies what did we say that was going to save us? 30,000 I think total?”

Some other assembly members did not sound ready to make big spending cuts now.

“It’s too much of a moving target in my humble opinion from Governor Dunleavy,” said Jeigh Stanton Gregor. “At this point we’re just trying to do our best and doing so with creating efficiencies or minor reductions in some areas, resonates much better with as opposed to really starting hacking and cutting until, you know, if we need to,” he said.

“I’m not in for great big cuts,” assembly member Bob Lynn said. “I’d like to maintain the school funding the way we have it here. I think the school is in for a some cuts. I just don’t see any way around that, watching the politics at the state level. That said, I also want to be very cautious. I would not be willing to fill any positions at this time until we how things occur at the state level.”

However, Meucci signaled a desire to fill vacant positions, a police sergeant’s job as well as an emergency medical services coordinator in the fire department, even if that meant cutting elsewhere.

“The police department and EMS, they’re very important to the community,” Meucci said. “I don’t think it makes any difference at all what the governor says to us. I mean if there’s cuts to the school, then we’ll sort that out and we’ll pay for that but I don’t think it’s up to the state government to tell us locally what’s important.”

The budget has limited spending for capital projects, mainly for water, sewer and electrical infrastructure.

The first reading of an ordinance on the budget is May 6th. The budget proposal is on the borough’s website.