Petersburg’s borough assembly passed its overall budget for the next fiscal year on June 2. But the option to allocate a million dollars from the harbor reserves for a potential cruise dock project caused friction for the final vote.
The Petersburg Borough’s general fund was nearly $400,000 in the red for the last fiscal year, but that’s not the case this time. The borough’s next budget is in the black, despite state and federal funding reductions and inflationary costs in all departments.
Assembly Member Jeigh Stanton Gregor thanked borough staff and the finance director for figuring out a balanced budget for the year.
“I know that is not easy, for every department to pare back some of the things they may feel important to their departments to get a balanced budget,” he said, reflecting the effort by department heads to keep expenditures to a minimum. “So I’ll definitely be voting yes.”
But not everyone was sold on the budget’s details.
Some contention arose with the move to include a $1 million appropriation from the harbor reserves in the borough’s new budget.
That idea was added to the budget proposal by the assembly in May. The money would go towards a potential dock extension project spearheaded by American Cruise Lines (ACL).
The company approached the borough about partnering on the project nearly a year ago. But the borough had trouble figuring out funding for its part in the project, so in April, ACL shifted its application to instead lease the tidelands from the borough and fund the new dock independently.
At the May meeting, Harbormaster Glorianne Wollen said the money could help design the project to benefit the harbor.
“Can’t afford, of course, the whole thing,” she said. “But the million dollars would, I believe, keep us at the table in the design area.”
The allocation included in the budget directs the borough manager to “explore” if there’s common ground with ACL about the project plans, and report back.
If the borough and ACL don’t come to terms, then the $1 million will remain unspent in the harbor reserves.
None of the money can be spent without getting written approval from the assembly first. Assembly Member Stanton Gregor said that gave him confidence.
“I like the ACL part in there,” he said, “because it gives the borough manager an opportunity to negotiate with them [ACL], and then it’ll come back before the assembly to vet it at that time. So I feel comfortable with that piece.”
Vice Mayor Donna Marsh suggested that the $1 million come from the borough’s economic development fund instead of using the harbor reserves, which is money generated by the fishing fleet. Her motion failed without a second given in support.
Borough Finance Director Jody Tow explained that they had considered using the economic development fund for the potential cruise ship dock, but went a different direction because of a few hurdles. Federal funding for a different waterfront development project the borough committed to is frozen “in limbo,” and Tow said they don’t want to spend down the economic development fund until the situation is sorted out. She also explained that using more than $200,000 from that fund requires approval from a public vote, which takes time — and time seems of the essence for the dock. The cruise company wants to complete the project for the 2027 tourism season.
Tow noted the infrastructure could generate revenue for the harbor, and from more than just the tens of thousands of dollars the borough gets paid in passenger fees from ACL’s cruise ships.
“When ACL isn’t using it, other cruise ships are going to use it, and that’ll get them out of the harbor,” she said, “so the harbor will generate more money being able to dock more boats.”
Mayor Mark Jensen voted no on the overall budget and has consistently opposed using the harbor funds for the dock project. He said he thinks that money should be used differently, or on other things for harbor users.
“I appreciate all the work from the finance department. I just think we’re going about this wrong,” he said. “That’s my rationale, and that’s why I’m going to vote no on overall budget, because I’m sure it’ll pass six to one … my crystal ball tells me that.”
Ultimately, the assembly passed the budget, voting 5–2, with Vice Mayor Marsh and Mayor Jensen opposed. The budget takes effect July 1 and lasts through June 30, 2026.
