Halifax Regional Water Commission general manager Carl Yates said he can justify management salary hikes of 20 to 40 per cent. ((CBC))

Water bills in the Halifax Region are set to increase significantly, but the hike is still lower than what the Halifax Regional Water Commission had asked for.

Starting Jan. 1, residential customers will see their bills go up by 27 per cent. Commercial and industrial water users will see increases of 19 per cent.

The residential rate hike amounts to an additional $120 a year for the average homeowner.

The commission had been looking for residential increases of up to 40 percent to pay for repairs to the city's deteriorating sewer infrastructure.

The Nova Scotia Utility and Review Board turned that down. Board officials are deeply unhappy with the imprecise financial data provided by the commission.

Board members said they are allowing the increase to ensure the water system is maintained, but the commission's next rate increase application will be rejected outright if it's as poor as this one.

"There were numerous changes and revisions to the application, with final revenue tables not being filed until almost a month after the hearing," the board said in a 95-page decision.

"The board has been put in a position of issuing a 'do no harm' decision because of the poor quality of the evidence filed in support of the application."

The board said it made a decision that will allow the water commission to operate until it can return with a "properly documented and reliable application."

The UARB said a second round of hearings is needed so the commission can prove its actual cost of services.

Carl Yates is the general manager for the water utility.  He said the commission can live with the ruling because overall the total amount of money remains the same.

"There's certainly been a significiant increase for residential, but also an increase overall for business. In the original application there would have been some instances where business rates would have gone down," said Yates.

The UARB is also alarmed by increases to manager salaries at the water commission. Over two years, Yates received salary increases of 40 percent. Other managers got a 20 percent raise.   Yates said those increases can be justified.

"I don't think they're unreasonable. Our salaries are based on a plan approved by our board and based on a comparison of the market across the country," said Yates.

The board plans to keep an eye on commission salaries.

Sonia Frangieh and Rodi Salloum, who own the Olympic Laundromat on Chebucto Road in Halifax, said the rate hike will mean more struggling. The couple have owned the business for just a few years.

Salloum and Frangieh said if they pass on the increase, they will lose customers.

"Most of our customers are students and they are already struggling too, so I don't know how we are going to make it," said Frangieh.