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The City Council has agreed to increase water fees 3.5 percent as part of its $11.5 million budget for 1997-98.

The water rates will increase 10 cents from the current $2.77-per-1,000-gallons rate. Oak Forest has had several rate increases the past six years from Oak Lawn, its Lake Michigan water provider, but has managed not to raise its rates, said City Treasurer Joann Kelly.

An estimated $7.8 million in general revenues collected from property taxes, coupled with water and sewer funds, the 911 emergency fee assessment, motor fuel taxes and other revenues will make up the $11.5 million budget approved last week.

The council approved $7.6 million in expenses for the coming fiscal year that begins Thursday.

The council added a new $55,300 community development director position, but refused to fund two vacant police patrolmen positions.

Aldermen set aside any decisions on capital improvement projects until May, when they will prioritize projects and look for needed revenues to fund flooding relief projects, new sidewalks, street repairs and equipment replacement.