Assembly reaches impasse on budget direction
The Petersburg Borough Assembly couldn't come to a consensus last Tuesday for next year's budget spending after it was tasked with providing direction to borough staff to make any changes the assembly would like to see.
The assembly met with department heads last week and went over budget line items department wide.
During Tuesday's budget hearing, members of Petersburg's community service organizations-organizations the borough funds annually-lobbied for their respective funding needs.
Petersburg School District (PSD) Superintendent Dr. Rob Thomason and Petersburg Mental Health Services (PMHS) Director Susan Ohmer responded to proposed cuts to school and PMHS funding made by assembly member John Havrilek during a prior work session. Havrilek said the borough needs to increase its reserves and cited future decreases in State funding and flat sales tax revenues as concerns.
During Tuesday's hearing, Havrilek made a motion for a 1 percent cut in budget spending across the board as well as cutting $200,000 from the $1.8 million of annual school district funding and eliminating, in its entirety, the borough's local $85,000 contribution to PMHS.
"I am really concerned about our spending level," Havrilek said. "When people come to us and are asking for funds, I don't disagree that they need them but I do feel strongly that we need to cut back somewhere."
Assembly member Bob Lynn seconded the motion.
Assembly member Jeigh Stanton Gregor recused himself from the vote because he previously worked at PMHS and currently runs a private mental health practice, and several members of the community felt he might be biased.
"That being said, any matters relating to this part of the budget I will be abstaining from in order to maintain the public trust even though I don't believe I have an agenda or bias either way," Stanton Gregor said.
That left the vote to four members of the assembly and any budget proposal needed four votes to pass.
Assembly members Havrilek and Lynn voted for the motion and Assembly member Nancy Strand and Vice Mayor Cindi Lagoudakis voted against it.
Stanton Gregor then motioned to reduce the budget by 2 percent department wide, excluding community services such as PSD and PMHS.
That motion also failed, with Lagoudakis and Strand voting against it.
Havrilek then motioned to cut the entire budget, including community services, by 1 percent. That motion also failed. Stanton Gregor again abstained and Strand voted against the 1 percent cut.
Lynn said a 1 percent cut would be agreeable for him if the assembly gave the department head freedom to make the adjustments.
"Some place down the line we're going to have to take care of ourselves, I believe, and we've got to start saving," Lynn said. "How we're going to do that, that's what we're grappling with here."
"We just spent several hours with meetings in work sessions with our department heads and I'm of the impression that they've cut as much as they can without really reducing services so I wonder where these additional 1 percent or 2 percent cuts are going to come from," Strand said.
She then asked for feedback from department heads and the superintendent.
Thomason remarked that in his earlier comments he suggested the assembly needed to resist simple, knee jerk quick fix solutions to complex funding issues.
"In the space of 20 minutes I sat here and heard 2 percent thrown out, 1 percent thrown out, $200,000 thrown out," Thomason said. "Nobody, other than just a moment ago, has put in the implications of those numbers."
Thomason again referred to the five percent of the budget district staff have control over at this point in the budget process which are sports, activities, music, art, professional development, vocational education, technology and teaching supplies.
"So if you're going to make this decision for the school district there will be a significant community impact," Thomason said. "If you were to take a longer range plan and say 'well we need to', as the district has done for five years, 'cautiously, judiciously with purpose and intent leverage retirements and resignations.' We have managed our house well and I guess what it feels like is that we're being punished for managing our house well."
Lagoudakis commented to the assembly that borough staff went through a thorough analysis of their budgets and that they've had the opportunity to ask questions.
"This seems like the 11th hour to say we want to make a change in how we're approaching the budget so I will give you one more opportunity for someone to make a motion and if not I will entertain a motion to adjourn," Lagoudakis said.
Havrilek responded by saying he's been pushing for cuts since last year.
"I know we went through these meetings and talked to people but I still think the bottom line is, that at this spending rate, we're being irresponsible and unless we create our own reserves, if we do have problems or emergencies we're asking for a disaster," Havrilek said. "I don't think it's too late I think we need to start planning now. I don't know what else to offer so I guess I move to adjourn."
Mayor Mark Jensen and assembly member Kurt Wohlhueter weren't in attendance.
The motion was seconded and the assembly adjourned.
The budget will appear before the assembly again during the first meeting in May and will go through a public hearing during the second meeting in May.
Proposed Budget Highlights:
• Revenues are expected to increase from $9.3 million to $10 million-much of which will come from increases in sales and property taxes and State shared revenue.
• There is an unassigned fund balance of $3.9 million-reserves that aren't assigned.
• The major increases in the Borough Assembly line item budget are attributed to a new online web based meeting software program that will allow assembly members and residents to participate in meetings online. The other large additional expenditure is for election costs.
• The Information Systems increase is attributed to replacing current out of date servers with a new private cloud virtual server.
• Dollars represented in the Transfers Out line item represent dollars going into savings outside the general fund.
$500,000 in raw fish tax revenues is proposed to be transferred to the harbor. Around $355,000 of general fund money will be transferred to a property development fund the borough uses to save for capital projects.
• Personnel costs increased across the board due to anticipated health care cost increases.
All data was taken from proposed borough budget documents, Borough Manager Steve Giesbrecht and Borough Finance Director Jody Tow.