Borrowing money to pay for improvements to Sebastopol's water and sewer system is not cost-effective and would raise the price of the project by $2.2 million, according to a city study.
As a result, city administrators say that doubling residents' water and sewer bills over the next four years is the best way to finance the project.
"If you are going to borrow money, you pay more in the end," City Manager Jack Griffin said. "We are not recommending that."
The study, along with the recommendation by city staff, will be given to the City Council at a special meeting tonight, the third time the council has taken up the rate hikes.
Increasing the sewer and water rates has been the subject of lengthy debates by the council, which is looking for alternatives to the city staff proposal.
The new study was done at the request of Vice Mayor Mike Kyes.
The staff has recommended water rate increases of 25 percent beginning in July, 22 percent in 2013-14, 18 percent in 2014-2015 and 15 percent in 2015-2016.
The proposed sewer rate increase is 12 percent for each of the next four years.
Without a rate increase, deficits of $450,000 to $525,000 are projected for each of the next four years as the city puts money into repairing and replacing parts of the system.
The city says it needs to cover the deficits, the cost of water and sewer service and also set aside $500,000 a year for maintenance and improvements for each of the systems. Sebastopol deferred $1.1 million in maintenance on the water system and $3.9 million on the sewer system.