RAINIER — For the third year in a row, Rainier residents will see increases in their water and sewer rates — a jump of 4 percent for water and 23.5 percent for sewer.

By a 4-2 vote on both measures, the City Council approved the hikes Monday night.

The council raised monthly residential sewer rates from $34.25 to $42.25 and usage rates from $2.90 to $3 per 100 cubic feet (a little more than 700 gallons). The council also raised water rates from $18.38 per month to $19.12 and consumption charges from $2.57 to $2.67 per 100 cubic feet.

Council members Russ Moon, Bill Vilardi, Phil Butcher and Dave Langford voted for the measures while Sloan Nelson and Scott Cooper were opposed. Councilman Mike Avent and Mayor Jerry Cole were absent.

The city is looking for ways to make its sewer account self-sustaining without using general funds or reserves. Without the increases, the sewer fund was looking at a $128,000 shortfall for the 2011-12 budget. This year, the sewer fund had a $105,000 cash carryover, which is now gone.

The water fund already is self-sustaining. The 4 percent water rate increase is based on the federal Consumer Price Index.

"If you remember, two years ago, you fixed the water fund (rates) and it's now self-supporting and a little is set aside for capital projects," City Administrator Lars Gare said. "This will fix the sewer fund and it won't drain from anywhere else. If we can get there, then it allows us to focus on the general fund without it being siphoned off."

Rather than raise sewer rates so much this year, Councilman Nelson suggested the city look at continuing to subsidize the sewer fund's shortfall with $50,000 elsewhere in the budget.

"We're balancing the (sewer) budget solely on rates and not on any cuts," he said. "I'd like to see it taken from the timber fund or the general fund like we've done in the past. I'm not comfortable with this proposal. I think there are other options."

The biggest drain on the sewer account is annual loan payments of $242,000 to pay off $2.7 million the city borrowed to overhaul the sewer treatment plant, a state-mandated project completed in 2009. The ultimate cost of the project was 30 percent higher than the $7 million engineers had estimated.

The council also approved a 4 percent increase in U.S. Gypsum's monthly rate for water to $10,920 per month and raised the company's sewer bill from $1,500 to $3,000 per month. The council also agreed to charge Rainier School District $10.31 per 100 cubic feet for sewer use with a monthly cap of $3,000 for the next three years. The district currently is paying $2,737 per month.

Both of those measures passed unanimously.

The rate increases take effect July 1.

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