Bonds for the new Ketchikan Fire Department downtown station and the new Ketchikan Public Library building are cited as reasons for the half-mill property tax increase city residents likely will be asked to pay in 2013.

After cutting a proposed mill rate increase by half on Monday, the Ketchikan City Council expects to approve the 2013 city and Ketchikan Public Utilities budgets Thursday night.

The draft city budget had included a one-mill property tax increase, which would have brought the city’s mill rate to 7.2 mills. During a special budget meeting Monday, though, the Council approved more than $400,000 in cuts, and then lowered the property tax increase to 6.7 mills.

One mill equals one dollar for every $1,000 of assessed value. The half-mill increase means that the owner of a $200,000 home will pay $100 more annually.

The cuts approved on Monday were suggested by Council Member Bob Sivertsen. The Council voted unanimously to cut $25,000 from staircase reconstruction, and $15,000 from rock and tree maintenance.

Only K.J. Harris voted against cutting $175,000 from the fire department’s equipment replacement fund.

The biggest savings on Sivertsen’s list was a $200,000 cut to the Hopkins Alley reconstruction project. Another $200,000 still remains to be spent in 2013, with the intention of completing the project over two years rather than in a single year.

Harris, and Council Members Marty West and Matt Olsen voted against that cut, which passed 4-3. West said the project needs to be done.

“I just worry about the safety of Hopkins Alley if we don’t get on it. It’s postponing the inevitable, and we really need to do it,” she said. “I’m still concerned that we’re not putting fencing up on Third Avenue. We had someone fall off that place and die. I think that this could prove to be a huge problem and we just need to fix it.”

Sivertsen responded that as long as the deck was fixed, the full project could wait a year without compromising safety.

City Manager Karl Amylon said that while Monday’s approved cuts will allow the city to make it through the next fiscal year without a full mill increase, it’s not a long-term solution. He said the city’s spending is not sustainable without additional revenue or more substantial reductions.

Amylon had suggested different budget cuts, such as grant funding for the Small Business Development Center and other nonprofit organizations; and two police officer positions.

Olsen proposed Monday that the Council could shift all community agency grants – about $350,000 – to the KPU budget, which would help the city budget’s bottom line. He says that and asking the Ketchikan Gateway Borough to help pay for library construction bonds could mean no property tax increase at all.

The Council rejected Olsen’s motion 2-5 with Olsen and Council Member Sam Bergeron

The front desk at the Ketchikan Public Library’s new building on Copper Ridge is seen during a special event before construction was complete. The library plans to open Jan. 2.

voting yes. In a 3-4 vote, the Council also rejected a motion from Dick Coose to use more of the city’s depleting reserves rather than increase the property tax. Coose, Bergeron and West voted yes.

Harris said it’s time to pay for the city’s big-ticket projects.

“We in the city voted for the fire department, we voted for the library. We got our $12 million library, and $15 million (fire hall). Did nobody think we had to pay for it?” he said. “I’m not at all in favor of a big mill increase, but by god I’ll do it. We voted for this stuff we got; we got to pay for it.”

During Thursday’s meeting, public hearings on the city and KPU budgets will precede the Council’s votes.

Also on the agenda is an executive session for the Council to talk about plans for a KPU 4G wireless network. The Council meeting starts at 7 p.m. Thursday in City Council chambers. Public comment will be heard at the start of the meeting.