DURHAM - Durham water bills almost certainly will be higher next year, as city officials must pay for pumps and pipes to connect to new water sources and offset the money lost when residents conserve.

Drought conditions in the area are expected to continue well into next year, and city leaders were told by two experts Tuesday that they would need to charge more for water to cope.

"It's easy for me to say because I'm not elected, but your water rates are too low," said Bill Holman of Duke University's Nicholas Institute for Environmental Policy Solutions.

Durham residents pay about $1.95 per 1,000 gallons of indoor water use, but it's roughly double that for outdoor use.

The lowest rate for Orange Water and Sewer Authority customers is $1.98 for 1,000 gallons, though rates go up the more a customer uses.

In Raleigh, the basic water rate is about $2.13 per 1,000 gallons.

Council member Eugene Brown said the council should and will be ready to bite the bullet and hope that customers understand.

"Water has become a scarce commodity," he said after the joint meeting of the Durham City Council and Durham County commissioners.

"If we can't be straightforward with our citizens, I don't know why we're here. We need to increase revenues to deal with the challenges," Brown said.

Those challenges include expanding water reservoirs to include Jordan Lake and the Teer Quarry.

The city has the ability to buy up to 10 million gallons per day of Jordan Lake water from Cary. A second pump into the lake could cost about $3 million, city leaders learned.

Durham also has a problem with cracked pipes causing leaks. Durham loses about 3.3 million gallons per day somewhere between the raw water going into plants for treatment and the water used by customers.

That's about 13 percent of the daily supply, higher than the 3 percent, 4 percent and 11 percent lost by Raleigh, Cary and the Orange Water and Sewer Authority respectively.

Dry weather makes the leak problem worse because the ground shifts as it loses moisture, causing line breaks.

Since Aug. 1, there have been 104 water main breaks in Durham.

That would be a lot for an entire year, said Don Greeley, deputy director of the city's water management department.

Detecting the leaks and fixing them will be expensive, officials said.

Then there's the problem of losing revenue as residents cut back their water use.

Water use in Durham has gone down about 25 percent since mandatory water restrictions were enacted Sept. 21. City Manager Patrick Baker said that means the water management department won't meet its revenue projections for the year. And water restrictions are going to continue for the foreseeable future, meaning the problem won't go away.

"If you're more efficient in your use, your revenues go down," Holman said.

Which leads back to why water rates likely will be higher starting next fiscal year.

City leaders expressed interest in the Orange water authority's rate structure.

Users of less than 3,000 gallons per month pay $1.98 per 1,000 gallons during regular times.

The rates go up at certain benchmarks. For instance, those in "Block 3," who use 6,000 to 10,999 gallons per month, pay $5.53 per 1,000 gallons.

Those rates are jacked up during mandatory restrictions. Block 3 users pay $8.295 per 1,000 during droughts.

That encourages conservation and bolsters the revenue stream, Holman said.