PHOENIX — Water rates will almost definitely increase in coming months. What remains to be seen is how much the city needs to raise to fund its water department, and how much to set aside for deferred maintenance and future system needs.

Citizens appointed to an ad hoc water-rate committee met Thursday and said they are just weeks from making a formal recommendation to the City Council.

The committee formed last fall in response to an August water-rate increase that caused public outcry and, ultimately, was the basis of a November election campaign that unseated three council members.

Jeff Bellah, chairman of the committee, said there is little doubt an increase is needed. In addition to suggesting a new rate structure, Bellah said, the committee would compile a list of suggestions to improve the city's struggling water department.

"The big problem is it doesn't look to me like they've had a real strong plan over the years, so they have all of this infrastructure, such as eight miles of pipe that needs to be replaced, and they've never really set aside any money to do that," Bellah said.

"I think we recognized from the start there needs to be some kind of increase, but you can't do it the way they did, with a small percentage of people paying for everything."

Dozens of residents, including Bellah, saw rate increases of 25 to 50 percent in the hottest weeks of summer.

Bellah, who said his August bill jumped from $90 in 2009 to $160 in 2010, said the city needs to run the water department "more like a business" and look at ways to save money and be more efficient.

"We're telling everybody we're doing this (increase) so they'll conserve, but then we find out that the city can't account for like 46 million gallons a year, which is 16 percent of what we get from Medford," Bellah said.

Committee member Nancy Miller said she hopes to see the city improve its planning and communication abilities.

"They haven't raised the water rate since 2007 ... and then to need all that money at once. Sometimes the city worries me," Miller said.

"I know what we come up with won't be putting as much into savings as was suggested. But ... if we want to save for future projects, we need to be saving now and we can't expect to have all the money today."

Miller voiced frustration that the recent election seemed to hinge on the rate hike.

"I've had several people complain that people ran on the water rates, and that was why people voted them in. Now it's quite obvious we're still getting an increase, and I think we all knew that before the election even happened."

Bellah and other committee members at Thursday's meeting discussed gradual increases to water rates, along with having the city stop borrowing from the water department for other city operations.

They also talked incorporating the nearby Charlotte Anne Water District into the city. The added customer base, which includes Phoenix High School and Ray's Market, would add at least another $64,000 in revenue, according to some estimates.

The committee meets again at 6:30 p.m. Thursday, Jan. 20, in the city's Public Works Office, 1000 S. B St.