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NIAGARA FALLS – A preliminary spending plan under review by the Niagara Falls Water Board calls for 3.5 percent increases in water and sewer rates for residents and businesses next year.

A proposed $28.8 million budget, presented to the board Thursday, represents an increase in spending of about $2.1 million, or about 8 percent.

The rate increases make up for a $537,511 shortfall, Mary Jean Buddenhagen, financial services director, told the board during her presentation of the proposed budget late Thursday afternoon.

The spending plan is, at this point, only a proposal and “not the final budget,” Executive Director Paul J. Drof emphasized to the board.

“Now we will work with the board toward coming to a budget that will be acceptable to everyone,” Drof said.

According to the Water Board, the rate increases equate to roughly 3 cents per day for a customer who is charged for minimum services.

A number of expenses will increase next year, officials said, including debt service, which will go up by $626,000; property and liability insurance, up $224,815; employee medical insurance, up $215,000; and prescription drug coverage, up $215,000.

The massive flooding damage to its sewage-treatment facility from a rainstorm in July led to the higher insurance costs, Drof said.

There are 3½ new positions created in the spending plan – a full-time employee and two part-time employees at the sewage-treatment plant, a full-time worker at the water plant and a billing/office supervisor.

It also includes some salary increases. Total salary and benefit costs are estimated to be about $10.5 million next year, up from about $9.7 million this year. Salaries and benefits represent more than 36 percent of the proposed expenses for next year.

Next year also will represent the first time in two decades that there is no income from a settlement between the city and Occidental Chemical Corp. The last payment received this year was for $500,000.

“In light of the serious issues that we had this year, it’s good to see that we’re starting out at a base point that’s relatively low,” board member Gretchen M. Leffler said, “but I would encourage all the board members to really look this over.”

A public hearing on the spending plan has not yet been scheduled.

email: abesecker@buffnews.com