Claremont — Concerns about the increasing burden on taxpayers was a recurring theme during City Council budget discussions over the last two months and it is likely to come up again when a proposed increase in the water and sewer rates is presented in the coming weeks.

“Water and sewer rates cannot stay where they are,” City Manager Guy Santagate said Thursday.

The water and sewer budgets, which are supported by user fees only, not taxes, for the fiscal year beginning July 1 were also approved Wednesday night in addition to a $17 million general fund budget. But both have projected revenues far below expenses and will rely on fund balances in their respective budgets to cover the differences.

The approved water budget of $2.9 million estimates $1.47 million in fund balance and retained earnings to add to the $1.44 million in revenues and the sewer budget of $3.2 million requires $576,000 in fund balance and retained earning to make up the difference between expenses and revenues.

Santagate said a study conducted by a firm hired by the city resulted in three possible options for addressing the budgets’ revenue shortfall.

Though he did not want to provide specifics until the council has had a chance to see them, Santagate said all three options do carry a rate increase.

Because of the city’s aging infrastructure, broken water and sewer pipes are a constant concern for the public works department. In his budget report to the council, Santagate said rates will need to increase to pay for infrastructure improvements to the city’s dams on its public water supply reservoirs and upgrades to the sewer system.

The last time the city had a “major” water or sewer rate increase was in 2000, Santagate said in his budget proposal, though there was a minor increase in water rates in 2009.

The $17 million general fund budget is just $62,000, or 0.4 percent, more than the proposal Santagate submitted in early May. With additional revenue from capital reserves, the amount to be raised by taxes is up just $20,000 from Santagate’s proposal and reduces the city portion of the tax rate by 13 cents per $1,000 of assessed valuation versus the 16 cent decrease in Santagate’s budget.

In a statement released Thursday, Santagate noted how little the budget had changed during the review by the council.

“The city manager wants to thank the mayor and the city council members for essentially supporting his entire budget as submitted,” Santagate said. “An enormous amount of time was spent reviewing each line item with a fine toothed comb and again, in the end, the budget passed without any major changes.”

The council on Wednesday night first added $111,900 for specific items to Santagate’s budget then cut $50,000 from that increase, leaving specific reductions to the city manager.

Though a combination of higher revenues and lower expenses for the current fiscal year ending June 30 will add almost $900,000 to the fund balance, the council noted that $1.6 million is being used from fund balance in the coming fiscal year to offset tax increases.

Part of the $1.6 million, about $330,000, will be used to cover a revenue shortfall in the Downtown Tax Increment Finance district, which does not generate enough property tax income to meet annual debt and expense payments. The remainder covers one-time expenses, Santagate said, including $500,000 for drainage on a Main Street rebuilding project and $144,000 for payroll to cover an extra pay period in the next fiscal year.

Patrick O’Grady can be reached at pogclmt@gmail.com.