Highland residents will see their next water increase in their September bills.

The Water Board at a special meeting Thursday night approved a resolution accepting the settlement among the city of Hammond and the towns of Dyer, Munster, Griffith and the city of Whiting that establishes a wholesale water rate for 10 years, with an option to renew for an additional 10. The settlement initially was introduced during a special meeting earlier in July.

Per the agreement, all the communities, including Hammond, will pay nearly double what they’ve been paying in wholesale rates, with Hammond paying them as well because the city sells water to Illinois communities. For Highland, the rates will increase to $2.06 per 1,000 gallons from $1.61, Clerk-Treasurer Michael Griffin said.

A separate rate increase on which the Water Board has been working will be implemented later in the year, after the directors have more time to review a rate study conducted by accounting firm London Witte. The board initially wanted to introduce the rates together but decided instead to introduce the wholesale increase in residents’ August water bill, to start being paid in September.

It will be indicated as the Hammond water increase on the bills, the board agreed.

While any increase is likely to be jarring, it’s still cheaper than it could be, Board member Ed Dabrowski said.

“I can go into the grocery store and pick up 24 12-ounce bottles of water for $5, but residents are paying $2.06 for 1,000 gallons.

They’re still going to be mad at it,” Dabrowski said.

The town’s sanitary and stormwater rates increased 56% and 58% in February, but customers are paying a 23% to 25% increase to their bills, depending on the amount of consumption. The board was looking at a 99% increase, Griffin said previously, but with expected increases to the water rates later in the year and a potential wheel tax, Griffin said 99% would be tough to inflict on residents.

The sanitary board, with its accountant London Witte, was able to change just the flow variable and the fixed rates affecting non-metered customers — to $4.85 per 1,000 gallons for flow rate and $46.33 per unit for nonmetered customers per month. The increase is expected to generate $1 million in revenue above what the town currently collects — bringing the total to $2.1 million — and would cover system improvements as well money the town can legally return to the general fund for raises and other expenses.

The Hammond agreement establishes a wholesale water rate with Dyer, Highland, Griffith, Munster and Whiting for an initial 10 years, with the option to renew for an additional 10, Hammond Mayor Thomas McDermott Jr. said previously. McDermott proposed in October to raise the water rates to $1.90 per 1,000 gallons in most cases because Hammond has essentially lost millions of dollars since 1985, when his father, then-Mayor Thomas McDermott Sr., set the city’s water rate at 44 cents per 1,000 gallons.

The move made the rates the lowest in the state, which was good for customers but not the city’s water utility.

Municipalities that purchase the water are considered retail customers and are therefore allowed to charge their residents reasonable rates above the rates they pay to Hammond, McDermott said.

Michelle L. Quinn is a freelance reporter.