Property taxes, electric rates and the sales tax cap will all go up next year.

Ketchikan city mayor Bob Sivertsen said in a Friday phone interview that expenses are up and putting off a tax hike wouldn’t be responsible. 

“We’ve deferred for a number of years any potential for raising property taxes,” he said. “And in this particular budget, the pressures were such that I think it was felt that it was warranted.”

The city’s 2020 budget passed Thursday projects to raise $438,000 through a half-mill property tax increase that goes into effect in July.

City workers are getting a 2 percent cost-of-living increase next year. That’s on top of raises approved this summer that are already in effect. 

To help pay for this property taxes are rising. For example, a tax bill for a property assessed for $250,000 will be $125 more than last year. Electricity rates are also increasing by 3.5 percent in the new year. The city sales tax rate remains flat, but the cap will double. That means the first $2,000 will be taxable, affecting large purchases like vehicles, appliances and luxury goods.  

The city is also adding three new positions in both the police and fire departments. 

In other business, a short-handed council deadlocked over whether to buy a former waterfront property to expand harborside parking. The former Bar Harbor Restaurant is up for sale and members of the city council have expressed interest. But councilmember Judy Zenge was absent, and former councilmember Lew Williams stepped down earlier this month. That left too few votes to authorize purchasing it this month.

The owner wants $395,000 for the property, but a third-party appraisal put the value at $300,000. The property also needs nearly $15,000 in asbestos removal work before it can be torn down.

The council also approved a $1.16 million contract with Western Dock and Bridge to replace fenders on Berth III of the city’s downtown cruise ship docks. Staff have said that replacing the fenders would save the city money in the long term — the current fenders are often damaged by large cruise ships.

The council also approved $50,000 for hiring an outside lawyer as it faces a deadline from regulators to begin filtering the city water supply. 

In November, city revealed that its reservoirs tested above the legal limit for fecal coliform bacteria. An expensive water filtration plant may be required. The city hired the attorney to help negotiate through the process with regulators. 

The city has also hired Jacobs Engineering for technical advice.