Ashland water rates will go up by 10 percent beginning May 1 and sewer rates will rise by 6 percent on June 1.

Ashland water rates will go up by 10 percent beginning May 1 and sewer rates will rise by 6 percent on June 1.

The combined increase will cost the average family living in a house another $4.29 each month, according to city of Ashland Finance Department calculations.

Ashland's combined water and sewer rates, already the highest in the valley, will go higher and cost the average family $51.60 per month.

An Ashland City Council majority reluctantly approved the rate increases on Tuesday night.

"We try to keep them as low as possible. There's no magic bullet here. We have to meet our expenses," Councilor Russ Silbiger said.

Last fiscal year, the city of Ashland raised water rates by 8 percent and sewer rates by 9 percent. But even with the increases, water revenues were flat because cool weather slowed water sales as people watered less.

"In the water fund, we're out of money," said city of Ashland Finance and Administrative Services Director Lee Tuneberg, noting that the city needs to raise water rates soon. "If we wait another year, we'll be $1.8 million in the hole."

Operating costs are rising and the city has put off infrastructure work because of the troubled economy, city officials said.

Councilor Mike Morris voted with the majority to increase the water and sewer rates. But he said the water price increase could cause people to trim their water use, and the city could end up with no additional money even after raising rates.

Ashland walks a tightrope when it comes to water sales.

If people conserve or use less water because of the weather, sales drop and revenues suffer.

But if people use too much, Ashland's limited water supply from Ashland Creek runs low. Then the city has to adopt water curtailment measures and take costly steps to get water from other sources.

During a 2009 water curtailment, the city had to spend extra money to treat Talent Irrigation District water to make it drinkable.

"We are in this catch-22. We want to sell just the right amount of water," City Administrator Martha Bennett said.

Councilor Greg Lemhouse said he wanted to vote against the increases, but had to be fiscally responsible and approve them.

However, he said councilors need to take any unexpected revenues and save them, rather than spending them. Otherwise they will be acting like people with massive credit card debts who go out and buy televisions when they get financial windfalls.

Earlier this month, councilors divvied up a projected 4.7 percent increase in city hotel taxes among city coffers, the Ashland Chamber of Commerce and smaller groups that put on cultural events, draw tourists and work to improve the local economy.

Lemhouse said at that time that he would prefer to only give extra hotel tax dollars to the city and the chamber, and to set aside the rest for financial reserves.

Lemhouse, Morris and Silbiger voted to approve the water and sewer rate increases. Councilor Dennis Slattery was absent.

Councilors Carol Voisin and David Chapman voted against the water rate increase, but for the sewer rate increase. (Correction: The voting record has been corrected in this story.)

He said the 10 percent water rate increase was not sustainable.

"People can't withstand that pressure," Chapman said.

Staff reporter Vickie Aldous can be reached at 541-479-8199 or vlaldous@yahoo.com.