An eight-person volunteer committee spent several months studying the situation and making recommendations.
Moscatelli said additional increases of about 5 percent a year were expected after the initial hike, with another substantial increase around 2018. That money is deemed necessary to help finance the replacement of miles of mains and lines, as well to replace or upgrade four of the borough's six pumping stations in coming years.
The increase under discussion could be passed as soon as the commissioners' Feb. 11 meeting, with the first bills going out around the end of the month, Moscatelli said.
Rather than maintaining a flat-rate system, a three-tier system has been proposed under which the largest users would pay the highest rate.
Tier 1 would cover up to 32,000 gallons a year, currently about 19 percent of residents. Tier 2 - 69 percent of residents - would cover users of 32,000 to 160,000 gallons a year, and Tier 3 would be more than 160,000, 12 percent of residents.
Now, all users pay a $40 annual meter charge and $5 per 1,000 gallons of water, plus a sewer fee of $2.40 per 1,000 gallons.
Under the proposal, the annual meter charge would rise to $50 and the rates would be:
Tier 1: $5.60 per 1,000 gallons of water and $2.69 per 1,000 gallons in sewer fees.
Tier 2: $7.06 per 1,000 gallons of water and $3.39 per 1,000 gallons in sewer fees.
Tier 3: $7.84 per 1,000 of water and $3.77 per 1,000 in sewer fees.
The bill for someone in Tier 1 using 20,000 gallons a year would rise from $188 to $215.80, a 14.8 percent increase, according to the letter to residents.
A Tier 2 resident who uses 58,000 gallons would pay $571.70, up from $469.20, a 21.8 percent hike.
A Tier 3 user of 212,000 gallons would pay $2,113.76, up from $1,608.80, a 31.4 percent increase.
Moscatelli said users could lower their bills by consuming less water, although he conceded that if enough people did that, it could force even higher rate increases in the future.
He said other options, including hiring a management company to run the utility or selling it to a private company, were being examined in addition to studying ways to cut operating costs.
Thursday's meeting will be at 7 p.m. at the Borough Hall.