Local public water rates are expected to increase sharply in the next fiscal year, largely to pay for investments in granular-activated carbon filtration systems.

During the past week, the boards of the Rivanna Water & Sewer Authority and the Albemarle County Service Authority were both briefed on proposals for fiscal year 2015 operating budgets and accompanying water and sewer rates.

The service authority’s executive director, Gary O’Connell, told his board Thursday that carbon filtration was the biggest driver of upcoming rate increases.

“I think very few people will make the connection that we as a community went through a big debate … about going to a different treatment process … and that is a big part of why these rates are going up,” O’Connell said. “That was a pretty conscious decision, it was said during the process, it’s expensive, it’s better quality water, and that was the community decision.”

The Rivanna Water & Sewer Authority has been evaluating plans to implement a granular-activated carbon filtration system since July 2012, when the approach was selected over the use of chloramines.

The $18.38 million project is necessary to comply with more stringent federal regulations. Separately, the water treatment plants in Scottsville and Crozet also are being upgraded to use granular-activated carbon.

Data provided to the RWSA board on Tuesday showed that without the carbon filtration project, wholesale water rate increases would be 7 percent to 10 percent lower than proposed.

The RWSA has two wholesale customers, the Albemarle County Service Authority and the city of Charlottesville. Both will set their retail rates based on their expenses for water and sewer services from Rivanna, and for their own infrastructure needs.

The Albemarle County Service Authority is finalizing a rate study conducted by outside consultants. The Municipal & Financial Services Group has made preliminary recommendations for a 19 percent increase in Albemarle’s water rate in each of the next two years.

The median single-family household’s monthly water bill would increase from $18.14 today to $21.58 next year under the proposal.

Consultant Edward Donahue told the ACSA board that, unlike in past years when rates were held steady or slightly declined, increases should be a regular occurrence.

“You should raise rates a little bit every year, and that would build up your reserves, so that when you are hit with a big increase in costs, like in this rate increase, it doesn’t have to be that big,” Donahue said.

O’Connell said in an interview that the expenses for the new dam at the Ragged Mountain Reservoir, currently under construction, are not a big factor in the water rate increases.

“Because the dam project was known for so long, Rivanna built up some reserves, we built up some reserves, so there wouldn’t be a large rate spike,” O’Connell said. “That project is already in a rate that people have been paying for a couple years.”

The Albemarle County Service Authority was praised by the consultants for its tiered-rate structure, which creates an economic incentive to use less water.

“I’ve always been comfortable with this kind of structure,” said board member Bill Kittrell. “I think it does incentivize conservation and encourage it in a way that I think is meaningful … I think this is part and parcel of the overall effort to conserve water and think about how we use those resources wisely.”

The Albemarle County Service Authority will get the final recommendations from the rate study in April and a public hearing will be held on the budget and water rates in June. In the city of Charlottesville, proposed water rates will be shared with the City Council at a public hearing in May.

The RWSA board set its public hearing for April 22 and will advertise increased wholesale rates for both water and sewer.

Wholesale water rates for the city of Charlottesville will increase from $2.341 to $2.663 per 1,000 gallons, or a 13.75 percent increase. The Albemarle County Service Authority will see increases from $3.333 to $3.687 per 1,000 gallons, or a 10.62 percent increase.

Wastewater charges are expected to increase for Charlottesville and Albemarle by 4.04 percent and 3.44 percent, respectively. However, the RWSA staff has built its budget assuming that the current sewer cost-sharing arrangement is unchanged for fiscal year 2015.

For more than two years officials from both localities have been unable to agree on how to split the costs for the $33.3 million Rivanna Pump Station, which will replace an existing facility in the city’s Woolen Mills neighborhood. A mediator was brought in late last year, and O’Connell said a “pretty detailed” proposal is now on the table for the pump station and future sewer projects.

“It is complicated,” said Judy Mueller, the city’s public works director. “It isn’t going to be a simple agreement and we’ll have to spend a lot of time answering a lot of public input.”

The pump station soon will be under construction, and City Manager Maurice Jones said the City Council intends to hold a public hearing on a sewer cost-sharing proposal March 17.