GARDINER — With little discussion and no public comment, the City Council gave early approval Wednesday to a plan to begin increasing sewer rates next month by 4%.

The proposal is expected to go to a second public hearing and a second and final reading at the City Council meeting July 20. The council held an informal public hearing June 22 on the proposal.

Denise Brown, Gardiner’s finance director, said the Wastewater Department had depleted its reserves over recent years to pay the rising costs of operating the department, including an expected $20,000 increase in the cost of sludge disposal.

The proposed budget increase is expected to generate about $52,00o a year.

At the same time, the department has been unable to replenish those reserves. As an enterprise fund, the Wastewater Department is funded by user fees from about 1,500 customers and not supported by property tax revenue.

Approving the 4% increase would balance the budget for the fiscal year that began July 1, Brown said, and would allow the department to set aside about $30,000 toward its next phase of system upgrades, expected to cost about $2.5 million.

Federal grant and loan money paid the first phase, at about $3.5 million, and the department is now making payments on that loan.

“We can’t afford to do the next phase unless we start saving for it,” Brown said.

She recommended the best practice for the City Council would be to revisit the matter for next year’s budget.

“I concur with Denise,” City Manager Andrew Carlton said. “We don’t know what the costs are going to be. We don’t want to pass on a big rate increase onto the ratepayers, but we have to keep operating.”

District 1 Councilor Terry Berry said approving the increase to balance a budget that has already been approved is like putting the cart before the horse, but he also understood changes in the city’s administrative staff affected the budget season.

Gardiner is not alone in enacting sewer budget increases.

Douglas Clark, Gardiner’s director of the Wastewater Department, surveys other sewer utilities in the region to see how Gardiner compares. He has tracked recent increases in Augusta, Richmond, Vassalboro and Winthrop.

Those increases reflect the individual needs of each utility. In Augusta, for example, sewer rates increased by 30% on July 1, Brian Tarbuck, general manager of the Greater Augusta Utility District, said Wednesday.

That increase follows a 29% rate decrease put in place three years ago. The current increase is expected to generate $779,000 to help pay for an upgrade to old pump stations, replace aging equipment and pay for increased power and supply costs, among other costs.

At Wednesday’s meeting, Brown said it was not clear how long the city could wait to undertake the next round of upgrades.

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