There's good news and bad news about Santa Fe's plans to increase water rates. The good news is that a new proposal from city staff now calls for rate increases over the next five years instead of the next seven years. The bad news is that rates would jump 9.5 percent each year instead of the 6.99 percent proposed earlier.

For city water customers, bills would increase faster but could stop growing — at least for a bit — after 2013.

Under the current proposal, in 2013 customers would pay 57 percent more than they paid this year. The former proposal would have topped out at a 60 percent increase above today's rates by 2015.

City Water Division Director Gary Martinez said the current proposal came after he consulted with new city Finance Director David Millican, who recommended modifying the earlier idea for a variety of factors. Among them, the nationwide credit market is increasingly unstable, and the city's plans depend on issuing bonds at a reasonable interest rate.

But Martinez cautioned against the idea that rates under the current proposal would remain stable after the five-year increase is over.

"Future increases will be dependent on the city's needs, and rates could continue to go up," he said Wednesday. "In no case will those rates go down. ... The rates are tied to our current needs and assumptions, and those could change. It's our best guess as to what the system will require in the next 10 years."

Councilor Rebecca Wurzburger said at Wednesday's Public Utilities Committee meeting that she intends to introduce a resolution that would make the change at Monday's City Council meeting. The proposal would then move through the city's public-hearing process before it came back to the governing body for a vote. If approved, the rate increase would take effect in March.

Public hearings on the earlier proposal did not garner a wealth of participation. Martinez said that did not surprise him. "I don't think it shocks (ratepayers). They are just educated about what needs to be the course," he said.

Among major projects the rate increase will pay for is the joint city/county Buckman Direct Diversion. Other capital needs include more water rights, upgrades to the Canyon Road water-treatment plant and watershed management.

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