The New York City Water Board on Friday voted to raise rates by 14.5% in the coming fiscal year over the objections of several City Council members. The increase was higher than an expected 11.5% increase that was projected last year.

Department of Environmental Protection commissioner Emily Lloyd said the additional increase was needed.

“We have seen a more than $118 million increase in nondiscretionary operations and maintenance costs, such as a dramatic growth in the cost of fuel and energy; increases in collective bargaining and health care costs; larger debt service payments on the Federally mandated projects that constitute two thirds of DEP’s capital budget, and also on other critical infrastructure projects,” Lloyd said in a press release.

The DEP operates the city’s water system.

City Council finance chairman David Weprin has led a fight two years in a row to change a practice under which the New York City Municipal Water Finance Authority makes rental payments.

The Water Board raises rates to meet expenses, which includes authority debt service, operations and a rental payment to the city. A portion of the rental payments go to the city to pay for debt service on general obligation debt incurred for water and sewer projects before the MWFA was created in 1985. The city, which makes a request for the rental payment that is subject to a cap based on a formula, uses some of that rental payment to balance its budget.

In fiscal 2009, $56 million of a $178.3 million rental payment will go toward city GO debt service, and in fiscal 2010 that will rise to $77 million of a $202.8 million rental payment, according to information provided by the authority and from an official statement from a MWFA bond sale earlier this year.

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