Litchfield residents will pay more for sewer and electric service next year.

The City Council unanimously approved increases of 4.5 percent for sewer and 8 percent for electric Monday — increases that will provide the city with a “break even” standing for both the sewer and electric funds.

Both increases have been “on the radar screen” for some time, City Administrator Bruce Miller told the City Council. The sewer rate increase became a necessity about two years ago, after Innovex closed its manufacturing plant in Litchfield — a move that contributed to about a $100,000 hole in the city’s annual sewer budget.

Next year’s 4.5 percent sewer rate increase is basically a stop-gap move, however, as the city works on its plans for a massive wastewater facility upgrade. Once that project is in place and the city can better judge the impact of service and rates, an adjustment may be necessary.

As it is, the increase for next year will have to be accompanied by a transfer from the city’s electric fund to create the “break even,” Miller said. The sewer fund’s 2008 budget also was balanced by a transfer from the electric fund.

The electric rate increase is basically a “pass through” increase, Miller said — just enough to cover the increases the city will see from Western Area Power Administration (20 percent) and Southern Minnesota Municipal Power Agency (6 percent).