Water and sewer users in Connell will see rate increases starting July 20.
The city council agreed Monday to raise the rates to pay for operating costs and ongoing capital projects.
"The city had not been keeping up on regular water and sewer rate increases," said Steve Taylor, city administrator.
Single-family residences will see the base monthly water rate increase by $2 to $13, and the rate per 100 cubic feet used will increase by 2 cents to 70 cents. Sewer rates will increase from a base charge of $33.04 per month to $35.35.
Rates for other water and sewer users also were increased.
Taylor said the increases will help pay for capital projects, such as the replacement of water lines in the Klindworth and Campbell neighborhoods. Aging water lines there have had frequent leaks and breaks and maintenance costs have increased, he said.
Replacing the lines will cost the city about $2 million. Taylor said the city hopes to get a state public works trust fund loan or a U.S. Department of Agriculture grant and loan.
If that doesn't work, the city will consider issuing 30-year bonds supported by sewer revenues to pay for the project, he said.
When the state Department of Corrections expanded the city's sewer lagoons to handle additional demand from the expansion of the Coyote Ridge Correction Center prison, Taylor said the city paid $250,000 for additional capacity for future city growth. That money had to come from the city's reserves because there wasn't enough in the sewer fund, he said.
The recent increases are the second in a six-year series of increases recommended by a rate study done by FCS Group, Taylor said.
Rates were increased last year, but the poor economy and the slower growth of prisoners and staff at Coyote Ridge meant there was less revenue than expected, he said.
The council also will consider rate increases in November that would go into effect Nov. 20, Taylor said. Those changes would bring overall water revenues up by 7.5 percent and sewer revenues up by 8.5 percent.
The council also agreed Monday to increase the utility tax on water by 3 percent to a total of 9 percent. That money will go to fire suppression costs, Taylor said. The increase will show on Sept. 1 bills.