Monthly combined water and sewer bills for the typical homeowner could rise 14.4percent in the fiscal year beginning July 1.
That would mean an increase of about $10.35 a month for homeowners using a typical combined 5,000 gallons a month.
The increase is needed to meet debt service requirements on the town's $36million in water and sewer capital improvement projects, consultant Utility Advisors' Network Inc. told the Mooresville Board of Commissioners last week.
The increase also will help maintain an adequate water-and-sewer fund balance of about $6million, the consultant said.
A typical commercial customer - with a 2-inch meter and monthly water-sewer usage of 100,000 gallons - would see an increase of about $189.34 a month, or 14.9percent, the consultant reported.
The rate hikes may seem dramatic, but they weren't unexpected, town officials said.
"You agreed through the bond documents (on the capital improvement projects) to raise the rates," Maia Setzer, the town's director of administration and finance, reminded the board.
The town needs the increases to cover a $1.4million debt payment for 2011, she said.
The improvement projects include expanding the town's wastewater treatment plant and other multimillion-dollar system upgrades.
Commissioner Chris Carney called the proposed increases "dramatic" and questioned whether commissioners couldn't consider using money from the fund balance to lower the increases. He also asked the consultant to return with any other options to take the financial squeeze off ratepayers.
The board is scheduled to vote on the increases in June.