The city of San Luis is in the early stages of considering whether a gradual hike in utility rates is the answer to help close a nearly $373,000 water and water treatment services budget deficit.

"Cities run their water and sewer operations like businesses," said Dan Jackson, a consultant at Economists.com. "So when costs go up, and they do for most businesses, a city has no choice but to pass those costs through to their rate payers."

Jackson offered the city some suggestions--one, would be to increase rates for water and sewer services over the next four years.

"Their [San Luis'] rates right now are about $25 below state average. If the city adopts our preliminary proposal, then the rates will continue to be significantly below the state average," Jackson said.

San Luis Mayor Jerry Sanchez said this way the city would not have to keep dipping into their general fund to foot the rest of the bill, which is what Sanchez said the city has been doing for the past recent years to keep up with increasing prices and a budget deficit.

"What we're trying to do is basically look at the many ways in which we can minimize these subsidies, because it's basically hurting the city, and it's been hurting the city for many, many years," Sanchez said.

He also pointed to the city's growth and its need for new infrastructure to provide proper water services to all residents.

These possible rate increases would help fund a $5.8 million project for new infrastructure; this was part of Jackson's proposal.

"We are growing, and with it, our infrastructure needs to grow with it also," Sanchez said.

Regardless of what council members decide, Jackson said that because of water scarcity, water services will, over time, become more expensive across the state and the nation.