CASTLE ROCK — The City Council here raised utility rates and agreed to borrow almost $240,000 to help balance its 2009 budget Monday — but not without some frustration among its members.

City officials have been working for two months to trim nearly $500,000 from its $1.5 million general fund budget. The city’s entire 2009 budget — including grants and other projects — is $9.8 million. The 2008 budget is $10.7 million.

Monday, the council took its first vote on the budget and a slew of fee and tax increases used to help balance the books. The council also approved borrowing $236,074 from other city funds to put the budget in the black. The borrowed money must be repaid, with interest.

Many cities and counties in the state are struggling to balance their budgets this year due to the faltering national economy and lower revenue projections. That didn’t make Monday night’s decisions any easier for councilmembers though.

In particular, they clashed about raising water and sewer rates, always a touchy subject in Castle Rock. The utility funds have to be self-supporting by state law. In addition, the council agreed to pay 30 percent of City Clerk Ryana Covington’s salary out of the water and sewer funds because she oversees billing and paperwork.

The $26,000 switch helped balance the general fund and better reflects how Covington’s time is spent, she said.

Councilman Mike Mask adamantly opposed the utility increase, saying even a few dollars more a month is too much for some of the city’s elderly and lower income residents.

“I’m really having a heartburn about this,” Mask told the council. “We’re going to price people out of their businesses. How far are we going to go?”

He suggested borrowing more money from other city funds rather than raising rates.

Other councilmembers said they had no choice and told Mask he was being unreasonable.

“We have to pay our bills,” Councilman Greg Marcil said. “No one likes this but there’s not much we can do. We have to pay our bills.”

“We’re already in the hole and borrowing money,” Earl Queen said about the idea of borrowing more money. “Nobody wants to raise rates but if you have to do it, you have to do it.”

In the end, the council voted 4 to 1 — with Mask opposed — to raise the water charge $1 per 100 cubic feet a month and increase the sewer base rate $4.10 a month. This plan affects customers using the lower amounts of water the least, which Marcil said was the fair thing to do. Otherwise, he said, the smaller consumers would subsidize larger users.

Someone using 600 cubic feet of water a month will see their overall water and sewer bill increase from $106.90 a month to $117.

The council also approved increasing the city business license, building permit fees and the stormwater utility to help balance the budget. In addition, the city scaled back or eliminated several projects, reduced services and cut employee hours.

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