Raleigh, N.C. — The City Council voted Monday to phase in higher rates for customers on the municipal water system, with a 9 percent increase taking effect Friday.

The average residential customer will see the monthly water bill increase from $29.69 to $32.36, officials said.

The increase is needed because the city is selling less water and making less money because of the economic downturn and because area residents adapted to the conservation measures officials urged during North Carolina's record-setting drought in 2007-08.

An internal accounting error also contributed to a $13 million deficit in the city's Public Utilities Department budget, officials said. Some of the increase also will pay for a new water treatment plant scheduled to open this year.

Water customers will face a second increase in December, when the city adopts a three-tier rate structure to charge heavy users more.

The bottom residential tier would be for customers who use less than 3,000 gallons a month, while the second tier would be for those who use between 3,000 and 7,500 gallons. The top tier would include anyone using more than 7,500 gallons a month.

The city would charge Tier 1 customers $2.80 each every 1,000 gallons, while Tier 2 customers would pay $4.15 and Tier 3 customers would pay $5.50 per 1,000 gallons.

City Council members rejected a proposed one-time, 17 percent increase, saying they didn't want customers to be hit with such a large change in their bills all at once during tight economic times.

City Manager Russell Allen said the two increases combined would end up being more than 17 percent because the city needs to recoup the money lost by delaying part of the increase by seven months.

Under the phased increase the average residential customer's monthly bill will increase to $36.84 a month, a 24 percent increase over the current amount, officials said.

Councilmen Thomas Crowder and Philip Isley voted against the rate increase. Isley said he doesn't like the proposed tiered-rate system.

Even with the increase, Raleigh's water rates will remain among the lowest in the Triangle.