Regina's mayor wants his country neighbours to pay more for services, such as water, that are supplied by his city.

Regina city council is studying a proposed hike in fees charged to outsiders who use Regina infrastructure.

Currently Regina charges a premium of 75 per cent above in-city rates for water and sewer provided beyond the city limits. Officials are proposing new connection fees that would add thousands of dollars to any new requests for service.

"We're talking about enterprises that are outside the city limits that are requesting service from us," Michael Fougere, the mayor of Regina, said Wednesday. "It's full cost-recovery to the citizens, so the citizens of Regina are not subsidizing it."

The proposed hikes have been working through city hall for months.

'The Rural Municipality of Sherwood has been excessively difficult to work with.' —Stu Niebergall, Regina Home Builders' Assoc.

In November, the city received feedback on the new policy from the Regina and Region Home Builders' Association.

The association's letter was provided to city council as part of the administration's background materials on the policy.

The home builders' president, Stu Niebergall, said the increased fees for residents of the Rural Municipality of Sherwood is a good idea.

Niebergall said the fee issue highlights a poor working relationship between Regina and the RM.

"We understand that the Rural Municipality of Sherwood has been excessively difficult to work with and they appear motivated to continuously throw glass under the feet of the City of Regina," Niebergall wrote. "We feel this is the right time for the City of Regina to advocate to the provincial government to step in and resolve these differences before the Rural Municipality of Sherwood becomes  a noose around the neck of the City of Regina."

Nothing nefarious going on, mayor says

Fougere, however, said raising the fees had nothing to do with the city's relationship with the RM.

"Is this the nefarious thing you're talking about," Fougere said. "I would say that's not true. We have an obligation and we want to be clear what the costs are going to be."

One person who has studied the costs associated with delivering water services believes the city may already be over-charging its rural neighbours.

"What's embedded in the interim policy are rates that are too high and don't need to be that high to recover their costs," Greg Argue, a water policy expert, said.

CBC News contacted the RM of Sherwood, but a spokesperson there declined to comment.

A final decision on the new rate policy will not be made until 2014.

With files from CBC's Dean Gutheil