NORTH LAUDERDALE — Water bills are likely to increase again this year.

Faced with a $643,000 deficit and no way of eliminating it without raising rates, city officials said they probably have no other options.

“We’re going to need to do that,” City Manager John Stunson told City Council members at a budget workshop on Tuesday. “We’ve been monitoring (rate income) since January, waiting for some kind of change. There wasn’t one.”

How much rates might go up is unclear.

Residents were hit with a rate restructure last year that increased water and sewer bills in many homes across the city.

City officials said a rate increase for the new fiscal year that begins on Oct. 1 is likely.

The problem, Stunson said, is that a new rate structure approved last year did not bring in as much money as anticipated.

That new schedule was to bring in $750,000, according to a study by the Fort Lauderdale consulting firm of Williams, Hatfield and Stoner Inc.

Finance Director Mark Bates said the new rates will bring in about $400,000 less than that by the end of the year.

“I warned them that raising the rate so much would cause people to cut back on their use,” said council member Gary Frankel, the sole dissenter last summer.

Frankel proposed his own rate structure that would have raised money by hitting heavier users harder. It was never approved.

“I just couldn’t get these people to agree,” Frankel said

Another factor adding to the dim budget picture is a dwindling utility reserve account.

The city has chipped away at a $1.4 million balance during the past five years. About $650,000 remained at the beginning of the fiscal year of 1991-92 and about $367,000 will remain after this year’s deficit is paid.

Without rate increases, utility department expenses will spend the rest of reserves and more, leaving a $643,000 deficit, Bates said.

Mayor Rich Moyle said he believed residents would support a utility rate increase if it was explained to them properly.

“If we don’t communicate with them, they immediately think there’s some shady deal going on, that we’re ripping them off,” Moyle said. “But as soon as you tell them what the expenses are for, they go, ‘Oh, OK.’ They support it.

“It’s like being told you need a new roof. You just need a new roof.”

The next budget workshop is scheduled for 4 p.m. on Thursday at City Hall, 701 SW 71st St.