Place warm water in bowl; stir in yeast and 1/4 teaspoon sugar until dissolved. Let stand 5-10 minutes or until mixture starts to foam around edges.
Place milk and butter in 1-quart saucepan; cook over low heat, stirring occasionally, until butter is almost melted.
Combine 1/4 cup sugar and salt in bowl. Add warm milk mixture; mix well. Add egg; beat at medium speed until well mixed. Check the temperature in the bowl. It should be less then 115°F. If it is warmer, let mixture cool slightly. Add yeast mixture; continue beating until well mixed. Add 2 cups flour; beat until mixture is smooth.
Stir in enough remaining flour with wooden spoon, 1/2 cup at a time, until dough is easy to handle. Let dough rest 5 minutes.
Turn dough onto lightly floured surface; knead about 5 minutes until smooth and elastic, adding more flour if dough is sticky. Place into greased bowl; turn greased side up.
Cover; let rise in warm place 45-60 minutes or until doubled in size. Dough is ready if indentation remains when touched.
Punch down dough. Divide dough in half. Cut each half into 9 equal pieces. Shape each piece into a ball. Place balls onto large greased baking sheets. Cover with plastic food wrap; let rise 30-45 minutes or until almost doubled in size
Heat oven to 350ºF.
Bake 12-14 minutes or until light golden brown. Brush warm rolls with melted butter, if desired.