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City officials say they will likely increase utility rates to offset budgetary shortfalls, with the timing and exact amounts to be determined later.

In February, independent auditor Carl Wanlass reviewed the city's 1992 budget. Wanlass' report suggested that officials consider either raising some utility usage rates or adopting across-the-board departmental budget cuts to compensate for an undisclosed revenue shortfall.While a report in the Feb. 19 Lehi Free Press suggested that officials were considering 5 percent cuts in all general-fund departments - saving the city nearly $99,000 - Mayor Guy Cash denied in an interview last month that the city would cut important services to make up the difference.

Public Works Director Bob Kunz said that Cash and members of the City Council have determined that they will likely raise utility usage fees, not necessarily to make up the revenue shortfalls, but tobring utility revenues in line with economic changes.

"At this time, they're certainly looking into it," Kunz said. "Nothing's been done yet, but I'd expect it will happen soon."

According to Kunz, the council is considering 4 or 5 percent usage increases in residential and commercial electrical and sewer costs. Wanlass' report indicated that revenues for the latter were down for fiscal '92 and that increased costs for the electrical department have decreased its profitability.

Wanlass said in a February interview that the city's sewer rates are calculated on projected water usage for the system. Because usage is lower than anticipated, that fund's profit margin is down correspondingly.

As for the electrical department, changes in environmental regulations have forced the city's electrical supplier to increase power costs, Kunz said. "So far the city has absorbed those increases. We can't continue to absorb those costs forever."

One way to avoid the increases or budget cuts could involve deferring large capital improvement projects until 1993 and adjusting proposed revenues for the year to match those numbers, or a possible combination of project deferrals and budget cuts, Wanlass said.

However, Kunz said he would like to see the council take the initiative now and said that he supports the proposal to raise rates.

"Basically, we've had the same rates without any changes for about eight to 10 years," he said. "From a manager's standpoint I'd like to see the thing rushed into effect so we have more revenue now, but there's no movement to do this thing tomorrow."