Petersburg City Council has come to a consensus regarding the purchase of the Reid Marine Property. Based on that consensus, a funding proposal has been prepared that will be submitted to the voters at the Oct. 2 municipal election. The funding proposal provides for $250,000 from the Property Development Fund; $200,000 from the General Fund; $400,000 from the Economic Fund and financing the balance of the purchase, not to exceed $550,000, over a 15 year period payable from increased harbor moorage and upland outdoor storage rates.
Taking $250,000 from the Property Development Fund will leave a balance of $113,593; $200,000 from the General Fund will leave a balance of $3,465,664 which is equivalent to 4.6 months of operating expenses which is within the parameters of the City's Fund Balance Policy and $400,000 from the Economic Fund will leave a balance of $3,858,228.
The remaining possible $550,000 will be payable from a Harbor moorage rate increase in the amount of $1.35 per foot annually bringing in an additional $24,000 assuming a 87 percent moorage occupancy and a storage revenue rate increase that would bring in an additional $30,200. The loan payment, if $550,000 would be approximately $50,000 annually for 15 years.
With the decision made, there were still mixed feelings regarding the purchase of this property.
“The $400,000 from the Economic Fund is just too much,” Council member Nancy Strand said. “I don't feel I can support acquisition of the Reid Property with public funds from the City.”
There were others in attendance that felt the same way about taking money from the Economic Fund.
“I don't believe this should be a grant from the Economic Fund,” Petersburg resident John Murgas said. “The Economic Fund belongs to everybody in the community and it has always been intended to be something of a permanent fund.”
Murgas explained that the interest income from the principal of that fund has done a lot of good for the community and has potential for continuing to do good.
“But for future generations, if we remove principal it will be diluting its value for the community,” Murgas said. “I urge you to consider some kind of terms for that principal to be returned to the Economic Fund, so it can continue working for the community, including the harbor.”
Petersburg Economic Development Council Chairman Casey Flint explained that as a board they are in favor of this project and as a whole, this would help the fishermen and the community for economic development in Petersburg.
“We are not, however, in favor of spending any money from the Economic Fund that isn't going to be returned,” Flint said. “Continuing to take from that fund keeps us from helping future development projects.”
No matter the opinions for or against this proposal, this decision will go to the voters before anything can be completed.
“I have thought, all along, that buying this property is a good idea for the community overall and for the fishing fleet. I also believe it will expand current business in the community,” council member Mark Jensen said. “Out of the five options I think this is the best one, but if we approve this, all we are doing is putting it to the people to approve or reject.”
Council member Susan Flint is in favor of the purchase but would like to acquire it in another manner.
“I think this will be a good thing for economic development for Petersburg,” Flint stated. “My first choice would be to put it on the Capital Projects List and second choice would be for the Harbor to borrow the money, up to $1 million from the Economic Development Fund, but I can't see that they have a way to pay it back.”
Flint also explained that she would really hate to see the City take $200,000 from the General Fund.
“I think that will not be responsible of us to cut into our reserves,” Flint stated.
This proposition passed with a four to two vote with Flint and Strand voting in opposition.