WENATCHEE — Chelan County PUD officials Monday proposed raising water rates by more than 20 percent over the next four years and sewer rates by more than 60 percent.

The increases are necessary, they say, to close spending gaps and build a nest egg for future replacement expenses and capital improvements.

Commissioners are scheduled to vote on the proposal in May. If approved, new rates would take effect June 1.

The rates would be phased in from 2013 through 2016 — an average of 5 percent per year for the PUD’s approximately 5,600 water customers and 15 percent per year for its almost 500 sewer customers, Ron Slabaugh, water resource manager, told commissioners Monday.

Compounded yearly, the total increase for each service by the end of 2016 would be 22 percent for water and 74 percent for sewer, Slabaugh said. Increases apply to both residential and commercial customers.

The PUD owns and operates water and sewer systems in unincorporated or rural areas of the county with relatively few customers each.

The areas tend to be more costly to serve than population-dense urban areas, officials have said.

The sewer system ended 2012 with a nearly $400,000 operational deficit, not including capital expenses.

By 2019, the utility will have to spend about $5.5 million to improve the Peshastin and Dryden sewer systems, which don’t meet state Department of Ecology standards for phosphorus deposits in the Wenatchee River.

A portion of the project cost would likely be covered by government grant funds, he said.

The proposed increase is in line with customers’ wishes for “modest, predictable increases over time” to move rate revenue closer to covering service costs, Slabaugh said.

But Commissioner Dennis Bolz asked staffers to consider the pros and cons of smaller increases over a longer period of time.

“I’m having a hard time understanding that 15 percent is ‘modest,’ ” Bolz said. “That’s the itch that I can’t scratch.”

Slabaugh said a 10-year rate phase-in for sewer would mean yearly increases of 7.5 percent.

Other commissioners cautioned that the systems could remain underfunded if the necessary hikes weren’t approved.

PUD commissioners and staffers will host two public-information meetings:

Leavenworth: April 16, 5:30 p.m. at the local PUD office, 22 Chumstick Highway.

Wenatchee: April 24, 5:30 p.m. at the PUD Auditorium, corner of Fifth Street and North Wenatchee Avenue.

A public rate hearing is planned for May 6. Commissioners could vote on the proposal right after the hearing.

Christine Pratt: 665-1173

pratt@wenatcheeworld.com