Petersburg assembly adopts FY2026 budget, approves $1M harbor appropriation for potential ACL dock amid debate

The Petersburg Borough Assembly adopted its fiscal year 2025–26 budget on June 2, 2025, approving an appropriation of $1,000,000 from the Harbor Enterprise Fund for a possible contribution to a cruise-ship dock project proposed by American Cruise Lines (ACL). The assembly approved the budget, including the harbor appropriation, by a 5–2 roll-call vote. The ordinance (20 25 0 5) requires that no funds be spent under the appropriation until the assembly approves a written agreement with ACL.

The appropriation and the process for negotiating with ACL drew public comment and extensive discussion. Bob Barton identified himself as chair of the Harbor Board but spoke for himself, telling the assembly he supports a dedicated cruise dock but questioned using harbor reserve money—funds generated largely from the commercial fishing fleet—to subsidize tourism. "If you cannot come up with a plan to replace this reserve money, then I think you have to admit that this form of tourism is a drain on the borough budget," Barton said, asking the assembly to commit to collecting $1,000,000 from cruise tourism revenue to replenish the harbor reserve.

Assembly members debated funding sources and protections. Member Don Marsh objected to using harbor reserves—money he described as coming from the fishing industry—and proposed an amendment to shift the appropriation to the economic development fund; that amendment failed for lack of a second. Supporters said the budget language limits spending until a negotiated agreement returns to the assembly. Member Steenbrenner (assembly member) said he was comfortable because "no funds may be spent under this appropriation without the assembly's approval of a written agreement," giving the manager negotiation authority but preserving assembly approval for any commitment.

During budget debate the assembly approved a separate amendment (4–3) to spend up to $6,000 from the property development fund to pay Hirai and Associates for revised concept drawings for the Papaleas Landing facility (referred to in some comments as Pappke's Landing). Member Lynn moved that amendment and it was seconded for discussion; it passed on a 4–3 roll call. The amendment also called for a committee led by Member Lynn and the borough manager to coordinate with the engineer and Alaska Department of Transportation, with possible future funding from the Dingell-Johnson (Federal Sport Fish Restoration) program if pursued.

Finance director Jody Tao provided fund balances and context in response to questions: the property development fund held approximately $734,000 in cash; the economic development fund showed about $4.6 million in reserves as of April, and certain items already budgeted from those funds include $651,000 for the Aquatic Center sewer project and $70,000 for the Banana Point breakwater project. Tao and other staff explained that some enterprise and internal-service funds show expenditures higher than annual revenues in the budget because those funds use existing reserves for one-time capital purchases (for example, fleet replacement through the motor-pool internal-service fund).

Roll-call outcome on the adopted budget ordinance (20 25 0 5) was recorded as: Members Stanton Gregor — yes; Newman — yes; Schwartz — yes; Lynn — yes; Valentine — yes; Marsh — no; Mayor Jensen — no. The amendment to fund revised Papaleas Landing concept drawings (move up to $6,000 from the property development fund) passed 4–3; the assembly recorded the amendment as passing but individual roll-call names for the amendment were provided during the meeting record.

Assembly members and staff said multiple paths remain before any harbor construction or borough contribution occurs. The appropriation sets aside funds contingent on a written agreement; any final funding or reimbursements would be subject to further assembly review and approval.

What happens next: the manager was directed (by prior motion included in the budget amendment language) to contact ACL to explore design options, terms and a financial plan; the manager is to return to the assembly with a proposed plan if ACL and borough staff find common ground. No borough funds will be released until the assembly approves a written agreement.