Raleigh, N.C. — City officials are considering a 17 percent rate increase for customers of the municipal water and sewer systems to help close a projected budget deficit.

Mayor Charles Meeker said the increase would add about $5 a month to the average residential water bill.

The city's Public Utilities Department is funded by charges for water and sewer service, and the combination of water conservation and the slowdown in local development has left the department about $13 million short of its revenue projection for the current fiscal year, which ends in June.

"If people conserve like you ask them to, then the fund is short of money," Meeker said.

Meeker and other city officials urged residents to cut their water consumption as recently as a year ago, when a record-breaking drought was gripping North Carolina.

"(It was) a very dry time in weather and in business," said Joshua Logan, owner of Logan's Trading Company.

Logan said his Raleigh nursery sold more rain barrels than plants in late 2007 and early 2008 as residents tried to conserve water and recycle rain for irrigation.

"This time last year, we were ordering these (barrels) by the truckload. There was a lot, (and) businesses in the area were competing for a limited supply," he said.

The City Council could vote on the new water rates during its April meeting.

Resident Tyson Warren said he doesn't think raising rates is a fair way to close the budget gap.

"You do the right thing, and you still get taxed for it," Warren said. "I wish they would come up with a better solution."

The rate increase is separate from Raleigh's plan to implement tiered water rates that would charge a higher rate to customers who use more water.

The tiered rates are scheduled to go into effect in December, but Public Utilities Director Dale Crisp said in a memo that they might have to be delayed until July 2010 if the department continues to run at a deficit.

Conservation would eliminate the added revenue from the higher rates, and the city would end up spending more sending out monthly bills instead of billing every other month, Crisp said.