But Pratt said approving rate increases three years at a time is "unfair" to residents. She recommended that the Department of Public Works compare actual revenue against projections after each year to see if the increases are merited.

She also called on the city to do more to collect unpaid water bills.

The audit showed that more than 15,000 city accounts have water bills that are more than 260 days overdue. Those outstanding balances total $24.5 million, including $11.4 million from businesses.

City auditor Robert L. McCarty said $7.3 million is owed by RG Steel, which has filed for protection under federal bankruptcy laws.

By comparison, the first year of the rate increase is expected to generate $40 million in new revenue. The second and third years would generate $27 million and $29 million, respectively.

Rudolph Chow, director of the city's Bureau of Water and Wastewater, said that following the auditors' recommendations would put the utility at "undue undo financial risk." He acknowledged the uncertainty of predicting future revenues and said any surplus would be used to offset future increases.

"We've done our homework," said Chow, who last week told the board the city's rate with this year's 15 percent increase is lower than that of most major East Coast cities, including Atlanta and Washington. The city also charges less than other places in the region, including Baltimore and Howard counties, he said.

The mayor said the lack of a serious bipartisan discussion in Congress is hurting U.S. cities that are struggling to manage federal mandates such as the Safe Drinking Water Act and a consent agreement with Baltimore to upgrade its wastewater system.

Baltimore Sun reporter Luke Broadwater contributed to this article.