The City Council yesterday gave preliminary approval to a package of tax rate increases for most nonresidential properties but indicated it was still considering rate cuts and other tax relief for owners of houses and apartments.

The council also advanced a series of sewer fee increases that could raise the average home's monthly charge to more than $90 by 2011.

Actual tax rates and fees for the year that begins in July won't be known until a final vote on June 6, though the sewer plan is expected to win approval.

If residential tax rates remain the same as the current year — $3.59 per $1,000 of assessed value — most homeowners will still see higher tax bills because property values continue to rise.

Kane'ohe retiree Ted Kane-mori is among those pushing for a serious cut in the rate — he hopes for something below $3.

The home he bought 36 years ago for $25,000 is now assessed at $849,000, sending his tax bills skyrocketing.

The home's value shot up from $378,000 to the current figure in just the past seven years, he said.

"If things continue to trend the same way in future years, with no tax relief, living here in Hawai'i will become impossible for older folks like me," Kanemori said.

Council members said they are still considering their options as they gather information about city expenses and spending plans.

"We should look at the future obligations of the city, and I can see a lot," Councilman Romy Cachola said.

Lowering tax rates now could lead to steep and abrupt tax increases later, he said.

The council is also considering a one-time tax discount of $200 for residents who have qualified for a homeowner exemption, as was approved last year. Mayor Mufi Hannemann is seeking a $376 discount.

The council tentatively increased the rate for property classified as hotel and resort, commercial, or industrial, from $11.97 to $12.50 per $1,000 of assessed value.

The rate for agricultural land was dropped from $8.57 to $5.70.

The council has moved to trim about $5 million off Hannemann's proposed $1.6 billion operating budget by cutting money for some arts and economic development programs, and from job positions that have remained vacant.

The council also reduced the amount to be set aside for public workers' post-employment benefits other than healthcare, from $62 million to $32 million.

City finance director Mary Patricia Waterhouse said failing to set aside the full amount would likely cause the city's bond ratings to be lowered. That could raise interest rates on money the city borrows for construction projects and operating equipment, costing taxpayers more in the long run, she said.

But some council members argued that it is better to set aside less money because the actual cost of the benefits is not clear, and city spending can be kept lower in the meantime.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com.