Dalton Utilities executives presented a preliminary $176 million 2009 budget to their board on Monday that calls for 20 percent across-the-board rate increases for wastewater and water services.

Water revenues for 2009 are projected to be $22.7 million, up from an estimated $19 million this year. Wastewater revenues are projected to be $24 million, up from an estimated $20 million this year.

The preliminary budget, which would be up from $166.9 million this year, doesn’t contain rate increases for electric customers. But Dalton Utilities president Don Cope asked board members to talk to him and each other before final approval of the budget in November to see if they want an increase in electric rates. Without an increase in electric rates, the utility would have a negative cash flow of about $9.6 million in 2009 after capital spending, depreciation, investment income and other factors are taken into account.

Cope said Dalton Utilities has traditionally covered such negative cash flows by taking it out of the utility’s investments. That has allowed the utility to subsidize rates and keep them below the cost of providing service. Cope told board members the utility can no longer afford to do that. But he said even with the proposed rate increases, water and wastewater rates will still be below the costs of providing those services.

Officials say they plan to cut capital spending to about $35 million from $50 million. They say they plan to spend only for those items that have already been contracted or that are absolutely necessary.

Board chairman Norman Burkett asked if that spending really could be put off.

“We don’t want to see our infrastructure go down the way it was a few years ago,” he said.

“Those things will have to be done eventually, but we will wait until the economic climate is better,” Cope said.

The proposed budget calls for a 22 percent increase in health care costs from 2008 (up to $3.21 million from $2.62 million). It also calls for a 3 percent cost of living raise for employees as well as up to 2 percent merit increases.

In noting those increases, Cope said many employees have been hurt because the utility has ended almost all overtime this year because of the economic slowdown.

The budget also calls for a 258 percent increase for workers compensation (up to $396,000 from $110,000). Cope said that “nothing that has happened in the last year” has caused the need for greater workers compensation funding.

“Over the last seven or eight years, somebody has decided to take the workers comp excess fund and fund the shortage in the medical program, and we’ve got to replenish it,” he said.

Dalton Mayor Pennington said the city had been overbudgeting for workers compensation.

“The work comp fund was way overbudgeted as far as the amount they were charging the departments. The health fund was way underbudgeted, and they took the overbudgeted surplus that built up in the work comp funds to fund the underbudgeted health side,” he said.

Pennington, who has been mayor since January, said the City Council plans to correct that by cutting workers comp and increasing health care funding in its 2009 budget.