Ketchikan’s city council will consider budget changes and an engineering contract at its Thursday evening meeting.

The first item is a budget transfer that totals more than $7.6 million. It would appropriate $5.5 million collected from the electric utility’s diesel surcharge to pay for expenses related to running diesel generators during this summer’s drought.

The other $2.1 million comes from money that would have gone to the Southeast Alaska Power Agency. But that money wasn’t spent because the drought meant SEAPA couldn’t generate enough hydropower to supply Ketchikan’s electricity needs.

The transfers don’t represent new spending — they simply move money that’s already been collected into the appropriate account.

The diesel surcharge funds backup electrical generators when Ketchikan’s hydroelectric facilities can’t keep up with demand. The charge is spread over six months to prevent massive spikes in electricity bills when the generators are needed.

With the area finally out of drought, city staff says the diesel surcharge will continue to decline. It currently sits at 5.3 cents per kilowatt hour, but officials expect it to drop to 3.5 cents in December and disappear completely by April of next year.

In other business, the council will consider a $100,000 contract with Jacobs Engineering to provide technical assistance while the city negotiates a new agreement with state environmental regulators. 

The city recently failed tests that allow it to maintain an unfiltered water system. A new agreement would give the city time to do preliminary engineering work and install a filtration plant. Early estimates put the cost of a filtration plant upwards of $70 million.

The council will also consider whether to sell its historic firehouse in a sealed-bid auction after a failed live auction earlier this year. It’s also expected to continue deliberations on the 2020 city budget.

Thursday’s meeting gets underway at 7 p.m. in Ketchikan’s city council chambers.