Gainesville water customers likely will see an increase of 5.5 percent on their water bills come January.

Although the City Council initially tried to defer the rate increase for six months, Thursday it conceded to a previous proposal from the director of the Public Utilities Department that would make the rate increase effective Jan. 1.

Council members had asked Kelly Randall’s staff to consider deferring the rate increase for six months to help customers survive harsh economic times, but doing so would mean customers could get hit with back-to-back increases in July 2009 and January 2010, Randall told the council Thursday.

If the department delays the rate increase by a year, water customers likely would face even higher rate increases — possibly 22 percent —in January 2010, Randall said.

Completely avoiding a rate increase is not possible, Randall said. The utility has to pay its bills, too, and loans are coming due on $80 million of improvements to the city’s sewer plants.

Although Randall said he understood the rate increase would be just another thing for utility customers to stomach during harsh economic times, ignoring the need for maintenance would be irresponsible environmentally, he said.

"I realize this is another brick on the wagon," Randall said. "But the last thing we need is a weak utility when the economy comes back around."

Along with a 5.5 percent water rate increase, Randall’s proposal also for an 8.5 percent increase in sewer rates for customers living inside and out of the city.

Randall’s proposal comes after the department suffered one year of drought-reduced water revenues. The department’s revenues for water sales are what they were more than 10 years ago when there were fewer water meters, Randall said.

Along with the reduced revenues, Randall said the department had cut its expenses from about $53 million to $48.7 million this year by not filling vacant positions, deferring the purchase of replacement vehicles, reducing the number of take-home vehicles and finding ways to cut energy costs by using electricity during off-peak times.

The budget cuts alone, however, were not enough for the department to maintain its required bond coverage and keep the utility in good shape in the future, Randall said.