DURHAM - Water users will pay higher rates starting July 1, the City Council decided Monday night, against the objections of the local Chamber of Commerce and one council member.

The increase is needed to help pay for nearly $250 million in capital needs, such as building a new intake on Jordan Lake and fixing leaky water pipes, officials said. The five-tiered system, under which customers will pay higher rates the more water they use, also is intended to discourage waste.

"Rest assured that every major city in this state is going through what we're going through tonight," council member Eugene Brown said.

"We simply do not have a choice."

But council member Howard Clement III, in casting the lone nay vote, said raising rates "lacks compassion" for people struggling in a down economy.

"I'm sure my colleagues have been deluged if not inundated with phone calls from citizens concerned about the water rate increase," Clement said.

"'Is the council aware that gas prices have increased, food prices have increased, mortgages are being foreclosed on? People just don't have the money. Are we going to add to their misery?"

Casey Steinbacher, president and CEO of the Greater Durham Chamber of Commerce, asked the council to postpone raising rates until Jan. 1. She said chamber members understand and support the need to raise rates. But Steinbacher also cited poor economic conditions and asked for more time for businesses to budget for the increased water costs.

The council compromised by postponing the increase a month.

Staff members recommended implementing the tiered rates June 1, but council member Diane Catotti said adding an extra month would give more time for public education.

Single-family residences will be the first to be subjected to the five-tiered system.

Commercial and industrial users, including apartment and other multi-family housing complexes, will have to pay a flat rate of $1.98 per 100 cubic feet, or 748 gallons. That's the same as the Tier 3 rate.

The average city customer uses about 800 cubic feet, or about 6,000 gallons of water, per month.

If all that water comes from indoor taps, those customers pay $15.06 per month now. Under the new system, they will pay $19.93 per month.

Currently, outdoor irrigation is subject to a double rate, $3.12 per 100 cubic feet. Under the new system, outdoor water will cost $3.87 per 100 cubic feet, the same as the Tier 5 rate.

Don Greeley, deputy director of the city's water management department, said the tiered system is largely intended to encourage people to limit their outdoor use.

"If you want to use your water for irrigation, it's going to cost you more," he said. "It's our goal to stretch our water resources as far as we possibly can."