By Jared Jacang Maher, FACE THE STATE

Water rates for Denver residents could be increasing in a big way.

In a contentious meeting with Denver City Council this afternoon, officials from the independent water authority revealed that the Denver Water Board is considering rate increases of 14 percent for residential users. The rate hikes could be adopted as soon as next month.

Denver Water provides service to cities throughout the metro area. Jim Lochhead, who replaced the late Chips Berry as CEO, said the rate increase is necessary to cover multiple capital improvement projects, including a significant update to Cheesman Reservoir.

Members of council were not pleased.

“I don’t think Denver Water has our best interest in mind,” said councilman Paul Lopez, who criticized the water district for failing to seek public input and being insensitive to ratepayers during a down economy. Councilwoman Jeanne Faatz relayed what she said is a common complaint from her constituents: “They keep asking us to cut back on water use and then keep charging us more.” The budget for the utility is projected to increase $19 million next year to fund operating expenses and capital improvement on Denver Water’s system. Under the proposal, the average consumer in Denver will pay $41 more in 2011, according Angela Bricmont, the Director of Finance.

Still, council members only got part of the story. Asked after the meeting if 2011 was the only year ratepayers should expect an increase, Lochhead replied he “would anticipate that rates will continually go up,” noting that Denver Water was seeking to ensure “long term sustainability and reliability of the system.” Under their current plan the utility hopes to “smooth” rate hikes over three years.

Denver Water already sold $90 million in construction bonds at a historically low 3.1% interest rate last week. Lochhead indicated that he expects the utility will issue additional bonds in the coming years, though he did not provide a specific dollar amount.