WENDELL — Commissioners took a series of steps last week designed to reduce the town’s shortfall on debt payments to the city of Raleigh.

As part of the water and sewer merger in 2006, Wendell agreed to repay existing debt on the system and to pay for some capital improvements that were planned in the future.

To pay off the debt, Wendell and Raleigh agreed to keep Wendell water rates higher than Raleigh’s and use the difference to pay off the debt.

The plan also projected increased revenues for the town based on growth.

But that growth hasn’t materialized and the town has fallen behind on its payments. And Raleigh has increased the rates it charges its customers more quickly than was expected which means Wendell has less extra money to pay off its debt.

Currently, Wendell doesn’t generate enough revenue to cover operational costs and debt service, let alone capital improvements and additional capacity purchases made at the time of the merger, Town Manager David Bone told commissioners.

The merger agreement gives Raleigh the right to impose a rate surcharge of up to 50 percent on Wendell customers in 2011 if the town hasn’t taken steps to recover the money.

At last week’s town board meeting, Kenny Waldroup, with the city of Raleigh’s public utilities department, said the city’s staff would recommend lengthening the debt repayment schedule to 2025, giving the town more time about six more years to pay down its debt.

Waldroup said language in the merger agreement requires the city to extend the same rights to Wendell that it does to other towns.

The staff has recommended a similar extension for the town of Zebulon.

Wendell commissioners agreed to pursue that extension with Raleigh city council, which makes the final decisions on that city’s behalf. Wendell water users will also see their water bills increase $4.20 per month each year. That represents an average increase of about 8.1 percent.

Bone told commissioners in order for the projections to work out, that increase could not be a one-time price hike.

“The pro forma is based on these increases happening each year,” Bone said.

Developers will also have to pay higher fees to get water and sewer service to their projects. Those rates will increase between 8 and 11 percent.

Commissioners had previously agreed to delay capital improvement projects worth about $7 million.