The City Council late Wednesday narrowly approved an 8.2 percent boost in base rates for each of the next five years, allowing water managers to execute a 10-year plan to upgrade and maintain the community system.

The rate increase will push the average residential bill of about $31.51 to $33.78 next year and $44.62 in 2013. It is scheduled to go into effect in March.

On the table were five scenarios that mapped out paths for financing an aging and expanding water utility over the next five years. The ideas featured annual hikes ranging from 7.2 percent to 10.3 percent. The lower the increase, however, the more the city would have to rely on backup plans such as seeking loans and forgiving money transfers from reserves to help prop up the system.

The decision came on a 5-4 vote after 10:30 p.m., with Mayor David Coss casting a tie-breaker to join Councilors Chris Calvert, Miguel Chavez, Rosemary Romero and Rebecca Wurzburger. The plan includes deferral of a loan to the water company from the city's reserves and pursuit of a $9 million loan from an outside source.

A number of residents attended the hours-long hearing to both support and oppose rate increases, including several who expressed concern about the safety of the Rio Grande water delivered through the Buckman Direct Diversion because of the potential for contamination originating from Los Alamos National Laboratory.

The river diversion and treatment-plant project is under construction, and staff say discussions with the nuclear weapons lab about contamination continue. Staff have also said delaying rate increases would put the city at risk of not securing bonds needed to finance the work.

"I do not dispute that there is a need for a rate increase, but I feel that there are several things that have not been taken into consideration," said Corina Noltin, who raised the issue of possible laboratory pollution but later added that she was concerned that "with so many people losing their jobs it would be a stretch for many, many families to see those increases."

Others, including a representative from the Sierra Club, asked the city to use renewable energy sources to power the diversion and its water-treatment plant.

Resident Craig Roepke said although he will notice the rate increase having an effect on his household budget, he urged the council to implement it anyway.

"Even worse to me than a bigger water bill is a future of ... dry parks and a dry and dusty Santa Fe River, and in the end an even bigger rate hike," he said.

Retired chemistry teacher Carolyn Cook said she favored the idea of a rate increase and advocated for a 9.15 percent hike.

"I compliment you all on raising this water rate issue," she said. "It takes real courage to do this. ... Now I ask you to be even more courageous, state what you know are real facts and raise the rates."

The city has not regularly increased water rates since it acquired the water system in 1995 and took over its operations in 2001. Rate increases occurred in 2000, 2001, 2002 and 2003, but not since — although the city restructured its rates in 2007 with the goal of keeping revenues flat but making rates more equitable.

Rate increases would fund a $183 million capital program, about half of which will go toward the Buckman Direct Diversion project. Other spending includes upgrades to the Canyon Road water-treatment plant, pipeline repairs and storage tank rehabilitation.

In addition to approving a rate increase, the council also ordered the water division to immediately begin an analysis of the rate structure that addresses greater help for low-income residents, raising utility expansion fees for new development and an additional rate tier to penalize "excessive water users."

Councilors who voted against the plan — Matthew Ortiz, Patti Bushee, Ron Trujillo and Carmichael Dominguez — said they were doing so out of concern that the numbers presented were not accurate, that the plan called on ratepayers to fund new development or that they did not do enough to reward conservation.

Ortiz called the "bare majority" vote "imminently unfair and imminently inequitable." He advocated for a voter referendum on a property tax increase to pay for some of the water costs.

Councilor Patti Bushee said she did not think the proposed options were good solutions for spreading the cost burden among various types of water users.

"I don't think this is the model to keep using, going back to the same ratepayer," she said.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.