CONNEAUT — Skeptical of revenue projections and fearful of losing two municipal employees to layoffs, City Council approved a one-year, 15 percent sewer rate increase at Tuesday’s special meeting.

The rate hike fell short of the level sought by administrators, but is enough to head off the layoff of two waste water treatment plant employees.

By a 6-1 vote, council replaced the 20 percent rate hike sought by administrators with the lesser amount. A 15 percent increase will cost the city’s minimum users an extra $2.58 a month, while average users will see their bills climb $4.32 monthly.

Council unanimously agreed the rate hike will expire at the end of the year. By that time, the city will have a good idea how other revenue-earning programs are working.

Council had been debating the sewer rate for the past few weeks. Administrators said the 20 percent hike was needed to deal with a $400,000 shortfall in the waste water enterprise fund. The extra revenue would also help pump up the treatment plant’s capital improvement fund, used for equipment and vehicle purchases and repair work, proponents said.

The 15 percent rate hike means the city needs to trim an estimated $133,000 from the sewage treatment plant budget to make up the difference. Last week, plant superintendent Craig Pierce said the reduction will be difficult but can be accomplished.

A smaller rate hike would have put two maintenance positions at the plant in jeopardy. Some council members, including Greg Mooney (Ward 3) and Tony Julio (Ward 4), argued the city can’t afford to lose any additional employees. Sewage plant staff, for example, sometimes assist the Public Works Department perform chores, such as snowplowing.

Layoffs also mean unemployment payments and overtime expense to fill gaps in shifts, members said.

Councilman-at-Large Robert Naylor, who originally endorsed a 10 percent rate hike, opted for the 15 percent because he feared sewer revenue projections for 2010 could fall short. He was especially leery of reports that an automatic water meter reader system now being installed in the city could raise tens of thousands of dollars this year.

City Manager Robert Schaumleffel Jr., citing his experience in other communities, has said he expects the ARM system to boost water revenue by at least 20 percent. A formula ties sewer rates to a customer’s water usage.

Finance Director John Williams declined to endorse the manager’s ARM revenue estimates.

“It may or may not hit 20 percent,” he said. “I don’t know.”

Naylor said uncertainty over the ARM’s money-making potential was a big factor in his vote. A rate hike too small could mean another increase may be necessary in 2011, he said.

“There are problems we could create by making an easy decision (a smaller rate increase),” Naylor said. “Fifteen percent is the more responsible thing to do. The best chance that the (hike) will expire is at 15 percent.”

Ward 2 Councilman Charles Lewis voted for the 15 percent hike “very reluctantly.” Also supporting that level were Council President Thomas Udell and Councilman-at-Large John Roach.

Opposed was Ward 1 Councilman Dave Campbell, who said landowners in his ward are still paying assessments on sewer projects completed years ago. A rate hike that exceeded 10 percent would work a financial hardship on many people, he said.

“We have to look at other departments,” Campbell said. “Maybe we should make some employees wear two hats.”