The Flagstaff City Council has put off until later this summer a staff proposal to increase residential water bills by 35% over the next five years. Utility officials said the higher rates are needed to avoid a deficit.

The rate increase would have generated an additional $1 million a year for the water agency. Without the extra money, city officials said, the municipal utility could be posting a deficit by 2012. That would require annual contributions from the city, officials said.

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