By AARON MUELLER
Niles Daily Star

The Niles Utilities Department will propose a 3 percent water rate increase at Monday’s city council meeting.

If approved by the council, the increase would be effective April 1.

Utilities Manager Jim Lehmkuhl said the hike is necessary to meet revenue requirements for its $5.8 million general obligation bond for the iron filtration plant built in 2005.

The department conducts a cost of service study each year to determine if an increase will be necessary.

The original rate adjustment projection in 2009 for this year was 5.8 percent. But Lehmkuhl said a wage freeze for utilities employees and a more conservative capital budget allowed the department to reduce the rate adjustment to 3 percent.

For the average residential customer, the hike will raise bills $0.64 a month. Despite the proposed increase, Lehmkuhl believes water bills have remained competitive to other local communities.

Also on the agenda for Monday’s city council meeting is discussion of the Niles Blue Grass Festival and a potential Indiana-Michigan trail that would cover 34 miles and connect Niles, Roseland, South Bend and Mishawaka.

Monday’s city council meeting will take place at 6 p.m. at the Niles Fire Station.