Water and sewer bills in Troy could soon get a bit more expensive, although Mayor Jason Reeves said the rates would still be among the lowest in the region.

The Troy City Council heard their first reading of an ordinance Tuesday that would change the current rate structure for water and sewer in the city, resulting in $9.75 more per month for customers of both.

Reeves said the changes would be implemented gradually over the course of three years and that the rates would remain on the low end of the scale.

“We’re fortunate to have the lowest water rates around this region,” Reeves said. “Three years from now, it will be about $1 less per month for 10,000 gallons of water in Troy than it is in Dothan; that’s factoring in the increases.”

If the council approves the ordinance at its October 9 meeting, the changes would go into effect January 1, 2019. The immediate impact would be an increase of $1.25 on residents’ monthly water bills and $2 more on residents’ sewer bills.

These changes would be implemented again the next year and the year following that for a total increase of $6 monthly in sewer rates and $3.75 per month in water rates.

Sarah Chandler of Jackson Thornton addressed the council members in August to detail the need for new rates in the city.

Chandler showed that the city actually didn’t bring in enough revenue to cover expenses for water service last year, falling just over $303,000 short of the necessary $3.9 million in revenue.

The city ended the year 8 percent under-recovered from the cost of service for water. Most of that shortfall, Chandler said, came from insufficient residential revenue.

So Chandler and the team at Jackson Thornton recommended the proposed rate changes to close the funding gap for the utilities.

Stephanie Baker, District 4 councilwoman, said the rates would remain the lowest in the state even after the increases.

“On a national level, our current cost of access is within the lowest 1 percent in the U.S.,” Baker said. “Having the lowest utility rates in our state is something we are proud to claim and will continue to claim, even with the incremental adjustments. Not only does this provide significant savings for our citizens, this also provides a competitive advantage in recruiting and expanding business.”

Wanda Moultry, District 5 councilwoman, said the residents need to understand why the rate changes would be occurring.

“We need some time to talk to folks in the community about it so they can get a better understanding,” Moultry said. “We need the folks out there that are paying for it to understand it. It’s good to just communicate it so people can understand it.”

The council also approved a near-level budget for the upcoming fiscal year at $68.3 million.

The budget comes within $200,000 of last year’s amended budget, Reeves said.

“Almost everything was level-funded,” Reeves told the council. “This is pretty much standard with what we had last year. Obviously, there are factors in growth within the city we are beginning to see. Some large things will come online within the fiscal year and there’s a lot of home growth going on in Troy as well. Things are moving and shaking.”

Reeves said in the past 18 months 107 new homes have been built in the city and 20 commercial properties have been constructed within two years.

The budget does not include a cost-of-living raise, but does include a 2.5 percent step-raise for eligible employees. The general fund revenue and expenditures balance out at $29.7 million and the utilities department will bring in and spend about $38.6 million.

The council also approved a lounge liquor license for The Red Apple, which will be located in the building that formerly housed the lounges Blue Notes and Cheers.

The council will meet again on Tuesday, October 9 at City Hall. The executive committee will meet upstairs at 4 p.m. and the council meeting will follow in the City Council Chambers at 5 p.m.