A project that would expand the community’s hydroelectric capacity is the City of Ketchikan’s top priority for state funding following Thursday night’s City Council meeting. The Council also heard some concerns from Manager Karl Amylon about the city’s sometimes contentious relationship with the Ketchikan Gateway Borough.

The No. 1 project on the city’s legislative priority list is a $12 million expansion of the Swan Lake reservoir, with hopes that such an expansion would reduce the amount of diesel burned when lake levels are low.

Trey Acteson, CEO of the Southeast Alaska Power Agency – which owns the Swan Lake facility – spoke in favor of the project. He said that once completed, it would offset up to 500,000 gallons of diesel generation, and the average diesel use in Ketchikan for the past few years has been about 400,000 gallons.

“Twenty-five percent greater storage at Swan Lake compliments the Whitman project,” he said. “Whitman doesn’t have much storage, so while it’s running, we’ll be able to bank water at Swan and then utilize that in the winter.”

Acteson said the savings on diesel generation could be more than $1.5 million annually.

Other projects on the city’s list are replacement of the viaduct at Sayles and Gorge streets; various water, sewer and storm drain replacements; and completion of the downtown promenade.

Council Member Dick Coose asked why the city’s list didn’t include the planned hospital improvement project, or funding for the shipyard. City Manager Karl Amylon said the shipyard is on the Ketchikan Gateway Borough’s list, and the city should wait until Phase 2 of the hospital project before asking for more money.

The state approved $15 million for Phase 1 of the hospital renovation, and city residents will vote Oct. 1st on a $42 million bond proposition to pay for that project.

The community’s priority list is put together by a Lobbying Executive Committee that includes representatives from the City of Ketchikan, the City of Saxman and the borough. The committee’s first meeting is scheduled for Aug. 30th.

Amylon ended the meeting by reading a list of concerns he has about Borough Manager Dan Bockhorst’s written report, released recently as part of the Borough Assembly’s upcoming meeting packet.

Amylon said he asked that a couple of items be placed on the agenda for the next meeting of the Cooperative Relations Committee, an advisory group that meets to discuss issues of mutual concern to the city and borough.

The first item was water consumption at the borough-run airport,

“For some time, city staff has had concerns that the borough is consuming excessive water at the airport, perhaps as much as 750,000 gallons per month, to achieve minimum standards for treatment of its wastewater at city facilities,” he explained to the Council.

Amylon said city staff believes that excessive consumption is the fault of a nonfunctional valve. Because the city is looking into a new metered rate structure that would affect the airport’s water bill, Amylon said he advised the borough of this, so officials could fix the valve.

“I was somewhat concerned to see the borough manager represent my comments as a veiled threat of a rate increase, possibly as high as 500 percent,” he said. “That was not my intent.”

Amylon added that the likely rate increase to the airport would be closer to 11 percent.

The second item of concern was discussion by the committee of the borough helping to pay the debt service for the new library.

Amylon said the borough manager wanted to expand that discussion to include operational expenses, to which the borough traditionally has contributed. The City Council recently approved an agreement calling for the borough to pay about  $420,000 for library operations, but the borough has not yet signed on to that agreement.

Amylon said the borough wants the city to track library use, but he’s not sure whether the city has the ability to do that.

In his report to the Assembly, Bockhorst writes that, unless the Assembly directs him otherwise, borough funding for library operations will require tracking.