City managers are about to start work on the draft 2013 budget, and have asked the Ketchikan City Council for some direction about community agency funding.

Last year, the city went with a new process for providing grants to local nonprofit agencies. It designated a specific amount based on a percentage of sales tax, split the funding roughly 75-25 between the city and Ketchikan Public Utilities, and formed a committee to decide which agency gets how much.

The committee included two Council members and several community members. Using the formula, it allocated the approximately $313,000, and submitted recommendations to the Council. The Council amended the recommendation, adding $55,000 for agency grants.

Mayor Lew Williams III said the Council felt the city could afford it, and the 15 agencies that applied provide important services.

“They felt that there was some money we could utilize and put into the program, because there’s a lot of good agency requests,” he said. “That’s something this year’s (committee) will have to look at. They gave money to all 15 people that applied last year. I don’t know if we can do that this year, if we get more. Somehow they’re going to have to maybe limit how many agency programs they can fund.”

City Manager Karl Amylon said in a memo to the Council that sales tax receipts are up, so the allocation for 2013 based on the approved formula would be $317,000. However, he says that’s still about $50,000 less than what the Council ultimately approved for this year.

The Ketchikan City Council will decide Thursday night whether to stick with the formula, or go with the 2012 funding level.

Williams said it’s not known yet how tight the city’s 2013 budget will be.

“Myself, I’d go ahead with the formula and then make the decision to add the extra $55,000 after we see our budget,” he said.

Another big topic on the agenda is whether to move forward with the Whitman Lake Hydroelectric Dam project. Construction bids came in about $12 million over budget, and city managers have provided two options: Reduce the scope of the project, or abandon it.

Also Thursday, the Council will decide whether to hire Bettisworth Welsh Whiteley architects to evaluate the Centennial Building. The $47,000 contract calls for the firm to provide a baseline assessment of the building and its systems.

Amylon said in a memo that the assessment will be needed no matter what the city eventually decides to do with the building after the Ketchikan Public Library moves out. The library now shares the Centennial Building with the city’s Tongass Historical Museum. The plan has been to expand the museum into the soon-to-be vacant space.

The Ketchikan City Council meeting starts at 7 p.m. Thursday. Public comment is at the start of the meeting.