Hutto City Council approved a 5 percent increase to city water rates Sept. 18. The rate hike takes effect Oct. 1. Residents will see the increase reflected on November water bills, according to a news release.

The average monthly utility bill will increase by $3.46, the news release states.

Assistant City Manager Micah Grau said the increase would "help offset some of our future costs associated with our take-or-pay contracts," referring to contracts in which municipalities pay for a set amount of water per day regardless of how much is used. Hutto has a water surplus because of its water contracts.

City Council raised the water rate by 15 percent in 2013. A 2012 utility rate study conducted by HDR Engineering recommended the city increase water rates by 20 percent this year. City growth allowed for the 5 percent increase, Grau said.

"We are going to have to look at it again next year, but we are hoping with the increased growth that we are able to do a minimum, if no, increase," Grau said.