Miami's Water and utility customers will see in increase in fees, beginning with Monday's billing cycle.

The city's Board of Public Utilities approved rate increases Thursday that city administrators said are the result of a two-fold blow to Miami's utility revenue stream - a loss in utility customers and a rate increase by the Grand River Dam Authority.

At the request of interim city manager Tim Wilson and chief financial officer Charlie Tomlin, board members approved a 2 mill increase in electric rates and a 25-cents-per-1,000 gallon increase in water rates.

Water customers currently pay $2.25 per 1,000 gallons of water - after the initial 1,000 gallons.

Tomlin said the electric increase represents an estimated $2 increase for every 1,000 kilowatt hours of power used.

“We put this off as long as we could,” Tomlin said as he explained that the city budget is feeling the pinch of a tightening belt. “It is not easy right now to pay the bills and keep money in the bank.”

The approved adjustment will be coupled with an a 2-mill utility rate increase that will be passed on to customers, bringing the total cost of the increase to an estimated $4 per 1,000 kilowatt hour of power usage.

According to Wilson, the city lost between 125 and 150 residential customers and 15 business customers in the July 2007 flood. The decrease is blamed for a projected $1,340,000 projected loss in revenue for the upcoming fiscal year.

In turn, the deplete customer base also contributes to a projected decrease in expenses of more than $860,000.

The decision to adjust rates marks the first increase in water rates in a dozen years, according to Tomlin.

Utility rates increased in April of 2006 as the city's cost of doing business with GRDA increased 3 percent.

In other business, the board approved $14.7 million 2008 -'09 fiscal year utility budget - a budget that represents the leanest in recent years, according to Tomlin. The projected budget leaves room for an estimated 1-percent, or $168,000, to take care of unforeseen expenses in daily operation.

The utility department does have an emergency replacement fund that, prior to Thursday's meeting, held $3.2 million.

That fund was reduced Thursday by $700,00 as the board approved an allocation of funds to the city for the Main Street project.

The funding will allow the city engineer to launch the long-awaited renovation of Miami's Main Street with a two-block section of work just south of Central Avenue.