Despite raising water rates 9 per cent a year since 2006 to replace worn-out pipes, Toronto needs to continue hiking rates because there’s still a $1.6-billion repair backlog, a new report says.

It seems residents are victims of their own success. Revenue has slipped because people continue to conserve water through efficient appliances and low-flush toilets so consumption has declined by 15 per cent over the last 10 years, the report says.

However, the costs needed to run the city’s water system remain constant. The average residential water bill would have almost doubled from $451 in 2006 to $854 in 2013 but with reduced consumption this year’s average bill is $768.

Water officials provided four revenue-raising options to be considered Wednesday by council’s executive committee headed by Mayor Rob Ford:

Raise rates by 6 per cent annually, for seven years starting in 2015.

Bring in a stormwater sewer charge on the water bill, where you pay more if you have more pavement and therefore more runoff.

Borrow the money. This would be a departure from past practice of pay-as-you-go — Toronto Water is debt-free.

Introduce a local improvement charge in basement flood-prone areas, which you pay based on the width of your lot.

First, Toronto Water needs to report how it spent the extra money that came in over the past nine years, said Councillor Cesar Palacio.

“How much of that money that’s been collected has gone into water infrastructure?” Palacio said. “Are we taking some of the money and diverting it for other purposes?”

Focus groups on the issue show people felt a rate increase was the simplest and easiest to understand while a stormwater charge is seen as fair because it relates to the actual runoff of a property. Councillor Glenn De Baeremaeker said he likes the stormwater levy because it’s “user pay.

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“Somebody with a 1,000-car parking lot that sends a tidal wave of water into the storm sewers and overloads it should have to pay more proportionally than a single homeowner with a beautiful lawn, lots of flowers and a tree.” People with lots of paving would have an incentive to install runoff tanks or plant trees, De Baeremaeker added.

Councillor Michelle Berardinetti, whose Scarborough ward has been hit with basement flooding, said the local improvement charge would amount to “targeting victims of basement flooding.”

Council’s budget chief, Councillor Frank Di Giorgio, agreed, adding basement flooding is often because “infrastructure is inadequate (and) that’s not the people’s fault, it’s the inability of the water department to rectify the problem because they weren’t able to get the money approved by council.”

The choice is either bite the bullet now or pay more later, De Baeremaeker said: “We’re not charging the proper price for water and we’re not fixing the basement-flooding areas fast enough.”