FARMINGTON -- A discussion Monday between selectmen and a rate consultant working for the Farmington Water Department left the board with an awareness that an 18 percent rate hike for fire protection is likely inevitable.

The water department, owned by the Farmington Village Corp., has hired Maine Rural Water Association to develop a new rate structure to meet rising operating expenses. The water department has about 1,500 customers.

"What troubles me is that (the town) has to come up with a balanced budget. Everyone is having a tough time," Selectman Jon Bubier told water department officials. "You can just set a rate and the public has to swallow it."

Under a state law, LD-1, passed two years ago, local and county budgets are subject to spending caps that are calculated annually to limit the amount of growth, regardless of current needs.

"Water is a bargain but under LD-1, we've got to break the law to comply," said Selectman Dennis Pike.

A public hearing on the water rate increase will be held at 7 p.m. on Thursday, Oct. 30 at the corporation's office at 137 High St. If approved by the Public Utilities Commission, the increase would go into effect Jan. 1, 2009.

The 13.2 percent increase for public fire protection would hike the town's hydrant rental fee from $230,000 to $260,427. The last rate hike was 8 percent set three years ago.

The rate for residential users will jump 8.4 percent and 8.8 percent for commercial customers. For a family using 1,800 cubic feet of water a year, their quarterly bill will rise from $54.75 to $59.75, or $236 a year. The average water customer in Maine pays about $300 a year, said Jane Woodman, the village corporation's business manager.

Steve Levy, director of Maine Rural Water, said the village corporation runs a tight financial ship and keeps debt to a minimum.

"The village corporation is diligent about putting back into the system and making smaller increases every few years," he said. "

He said the cost of all the products that water systems use has jumped 20 to 30 percent a year including the price of metals and plastics and water-treatment products. Ratepayers can petition the Public Utilities Commission to investigate the rate hike proposal, a lengthy review process that halts the increase until the inquiry is complete. Information on a petition is available at the corporation's office.

Betty Jespersen -- 778-6991

bjespersen@centralmaine.com