The average monthly utility bill will increase about 24 percent for a Renton household over the next two years, under new rates approved Monday by the City Council.

Even with the higher rates, Renton homeowners will still pay among the lowest utility rates compared to 12 other cities in the county, including Seattle.

In recent years some rates have seen only small increases, and under the new rate structure, garbage rates won’t increase at all. For example, the average water bill has increased about 88 cents a month in the last 15 years.

The full City Council was briefed on the rate-hike proposal during its last two Committee of the Whole meetings. The rate hike has been before the council’s Utilities Committee for several months.

A formal ordinance adopting the new rates will go to the council this month, with the new rates going into effect in January.

“It’s critical we increase the rates. We have been keeping them flat for too long,” Gregg Zimmerman, the city’s public works administrator, said in an interview. Without higher rates, it’s possible the wastewater utility would have to borrow from other divisions to continue operations, he said.

The hikes are the biggest in the 20 years he has been with the city.

The utility bill covers the cost of water, sewage, controlling runoff and garbage.

The biggest part of the increase will come next year, about 17 percent. In numbers, an average household – one that uses about 750 cubic feet of water a month – will pay $83.74 a month next year for all local utilities, compared to $69.09 today. That’s a difference of $14.65.

Utility rates could go up even more, because the King County Metro is planning a 13 percent increase in its sewage rates, according to Lys Hornsby, Renton’s utility systems director.

Utilities are paid for with a combination of bonds (basically loans) and rates. Projects to build utility infrastructure, such as waterlines and sewerlines, typically are paid for with bonds. And, typically, rates pay for operations and maintenance.

The need for higher rates doesn’t mean the city’s utilities system was not wisely managed in recent years, Zimmerman said. Instead, the city’s priority was to build new capacity projects, such as reservoirs, to serve new businesses areas, including The Landing, and new residential areas.

Such improvements are essential to the city’s economic development and public safety, Zimmerman said.

Now, however, that debt is higher than the city would prefer, Zimmerman said. The city still has a good bond rating, he said.

Plus, on the sewage front, there have been some expensive failures, including the two 16-foot sinkholes that opened up next to the Rolling Hills Apartments in east Renton after a sewerline broke.

So city priorities are changing, with an emphasis on repairs and upgrades that annually could cost about $9 million, paid for from the higher rates.

City Council President Don Persson said Monday night he wasn’t happy with the higher rate. This is what happens, he said, when rates aren’t raised gradually.

“We are so far behind, we have to play catch up,” he said. But, Persson and the rest of the council voted for the rate hikes.

Persson asked what would happen if the council didn’t raise rates.

“We will run a negative in the utility accounts,” answered Hornsby, the utility systems director. “2011 is a very difficult year for us.”