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1/2/2013
Hydro, bonds, Bawden in ‘12

By ANDREW SHEELER

Daily News Staff Writer

The Ketchikan City Council spent 2012 wrestling with several contentious issues: The Bawden Street Apartments building demolition, a $5 million harbor bond package, the fate of the Whitman Lake hydroelectric project, the 2014 community capital projects priority list and a city property-tax increase.

The Council spent the better part of the year attempting to secure a contractor to bring down the decrepit Bawden Street Apartments, which also was formerly the hospital. At its March 1 meeting, the Council voted to throw out all bids for the project, citing problems with the "project narrative" of Ketchikan-based BAM LLC and considering the bid of Anchorage-based Central Environmental, Inc. to be too high.

While the Council expressed interest in bringing the building down before the start of the busy tourist season, it was unable to do so. Nor was it able to meet its goal of completing the demolition by October. It wasn’t until the Council’s Nov. 15 meeting that it awarded a $685,300 contract to BAM to do the demolition. A BAM spokesman said the company is on track to begin demolition in early January, with an estimated February completion date.

Citing a need to complete significant harbor repairs and upgrades, including the construction of a Bar Harbor drive-down ramp, the Council proposed a $10 million harbor bond package to pay for the work. That was reduced to a $5 million harbor bond, which voters approved in a June 26 special municipal election.

The city held its regular elections on Oct. 2, with Council members DeAnn Karlson and Robert Sivertsen running unopposed. City Mayor Lew Williams III ran for re-election against Lewis Armey Jr., winning by a substantial margin.

In July, the City Council learned that the proposed Whitman Lake hydroelectric project cost had come in at more than $10 million higher than the city had budgeted. An estimate from engineering firm Hatch and Associates put the dam’s cost at roughly $14 million. The city budgeted $16 million and the lowest bid, from Ketchikan-based Dawson Construction, Inc., was $26 million.

City Manager Karl Amylon initially proposed either reducing the scope of the project, by cutting the larger turbine, or scrapping it altogether. The Council directed Amylon, Ketchikan Public Utilities, Hatch and Dawson to "value engineer" as much money off of the project as possible. They succeeded in trimming roughly $8 million.

However, a Federal Energy Regulatory Commission deadline to begin construction by March 16, 2013, meant time was running out to begin the project. The Council approached the Ketchikan Gateway Borough Assembly to help make up the difference.

On Dec. 17, the Assembly voted to give the city $2.5 million to finish Whitman Lake construction. The Assembly stipulated that the city had to use all other available funds first, including a new sources of funding, should any emerge.

At times in 2012, the relationship between the Council and Assembly was less cooperative.

Through their mutual Lobbying Executive Committee, the cities of Saxman and Ketchikan and the borough determined a list of seven capital project priorities to present to Gov. Sean Parnell and the Legislature.

Each of the three municipalities got its top two projects on the list. For the City of Ketchikan, that meant $20 million for a Ketchikan Medical Center upgrade and $12.75 million for Water Street bridge and trestle repairs. The borough’s top two priorities were $1.8 million to begin work on a Performing Arts Center and $4 million for service area road construction and repairs. Saxman listed $1 million for Mahoney Lake hydroelectric project preconstruction and $557,740 to build a parking lot for the Saxman Community Center.

All three communities agreed on $11 million for a Ketchikan Shipyard upgrade as a mutual priority.

Amylon and Council members took issue with the ranking of the top three priorities. The committee ranked them, in order, as the hospital upgrade, Mahoney Lake and the Performing Arts Center. The Council voted to recommend that the bridge and trestle upgrade be moved to No. 2 and the shipyard upgrade be moved to No. 3.

At their respective meetings in September, the Council and Assembly uttered heated words as both sides disagreed on the priority ranking. The two bodies, as well as the Saxman City Council, ultimately agreed on a list with no stated priorities. The Council voted on the final list at its Oct. 8 meeting.

Parnell didn’t include any of the projects in his proposed 2014 budget.

In its 2013 city budget, the Council confronted roughly $840,000 in deficits from the additions of bonding for the fire station and library to the city’s ledger. The proposed budget reflected no reduction in city services or personnel.

To make up the shortfall, Amylon proposed a 1-mill increase in the city property tax rate, from 6.2 mills to 7.2 mills. For a home assessed at $200,000, that would have been an additional $200 in city taxes.

Williams said he’d allow the mill rate to go to 6.7 mills but no higher. To make up the difference, the Council postponed the purchase of a new fire engine for the Ketchikan Fire Department, extending the Hopkins Alley reconstruction project over two years and making several cuts to the public works budget.

The Council finalized its 2013 city and KPU budgets at its Dec. 20 meeting. The city budget included the half-mill increase.

Also in 2012, the Council:

• Gave KPU the go-ahead to negotiate to implement 4G/LTE in Ketchikan. Implementation will cost up to $5 million and would be available to Ketchikan KPU customers around the middle of 2013. The Council must approve a final deal, though.

• Urged its members on the Southeast Alaska Power Agency board to reject a report by D. Hittle and Associates that calls for the consolidation of the operation and management of the Swan and Tyee lake dams, under a contractor to be determined by SEAPA. The dams are currently maintained by employees of KPU and the Thomas Bay Power Authority, respectively.

• Voted to give the Ketchikan Visitors Bureau $342,000 in community grant funding. It also allowed KVB to move into a city-owned building and assisted the agency in paying off its mortgages.

• Voted to join the Alaska Miners Association at the $5,000-a-year membership level. The Council signaled that its membership was intended to show the mining industry that Ketchikan was serious about encouraging it. The Council opted to reduce its membership to the $500 level for 2013, as part of an effort to reduce expenses.

• Initiated a change of ownership of the Gateway Center for Human Services building to Anchorage-based Akeela, Inc. The Gateway Center is a substance-abuse treatment facility.

• Switch to the use of iPads. Previously, Council members and the city mayor received meeting packets in paper form, costing the city approximately $114,000 a year. The iPads cost the city an initial $8,552 and will cost an estimated $2,880 to maintain.

• Extended the city’s lease of its hospital building to PeaceHealth, which runs the hospital, for another 10 years.

• Followed in the borough’s footsteps and repealed the city boat tax.