About 15 people spoke to the board during a public hearing Thursday night. Most said the increase was excessive, reflected poor financial planning and showed that the agency had failed to increase its water supply as the population grew.

"I'm going backwards every year," said Devin Clark of Carrboro. "At some point it becomes prohibitive to even live here. The very thought of a 24 percent increase seems ludicrous to me."

Anthony Carey, whose Siena Hotel recently won an award for conservation, said that unlike his guests, he has no choice but to pay what OWASA demands.

"You go to 25 percent, I have to deal with it," said Carey, the general manager. "If I raise my rates, they'll just go to the Carolina Inn."

Two factors are driving the high rate increase, which OWASA has predicted would increase the typical residential customer's monthly bill by $14.51, from $58.18 to $72.69.

First, the agency predicts 13 percent less demand for water in the coming fiscal year, as drought-wary customers use less water.

Second, the agency predicts a 39 percent drop in connection fees from new development due to the slowing construction economy.

OWASA board members defended their numbers after the public hearing. Unlike water departments in some cities and states that get government subsidies, OWASA is a public nonprofit that must charge what it costs to deliver its services, they said.

The rate increase reflects the cost of making sure clean water comes out of the faucet when customers turn it on next year, they said. And they couldn't guarantee there would not be another increase a year from now.

In response to one speaker who said his son in Phoenix pays far less for water than OWASA charges, board Chairman Randy Kabrick was blunt. Politicians have hidden the true costs of water and sewer service by using other government funds to keep prices artificially low.

"This country has historically underpaid for one of our most valuable resources, which is drinking water," Kabrick said. "The reason they pay low rates in Phoenix is because they're idiots. They're pumping water like it's going to last forever. That's not going to happen here."

But two board members said they were still mulling the proposed increase, and one, Braxton Foushee, said he could not support it.