The Lula City Council is considering raising utility rates.

Mayor Milton Turner said the city needs to increase its water and sewer rates in order to support operating costs and improvements to its system.

“Operating cost is getting so expensive,” Turner said.

The rate would increase in gradual increments over the next three years. The base rate for water service would increase 25 cents every six months over a three-year span. The price per thousand gallons would also increase 3 percent semi-annually.

Sewer rates would go up 10 cents every six months over three years and increase 11 cents per thousand gallons.

The council is also contemplating a $1 capital improvement fee that would help finance improvements to the system.

“We want to do some more infrastructure work on our old system,” Turner said. “We are looking to fix some of the problems Lula’s had over the last 20 years.”

Lula City Manager Dennis Bergin said utility rates must fluctuate because they are the city’s only other source of revenue besides sales tax. Lula has no property tax.

“This is how they do away with property taxes,” Bergin said. “If it costs us a dollar we charge a dollar. ... We forecast what we anticipate the costs to be, and they apply the rates accordingly.”

Bergin said the city council periodically adjusts rates to compensate for changing costs.

“Two years ago they adopted rates that matured over two years. Now they’re adopting rates that mature over three years,” Bergin said.

“They don’t want to burden anybody more than they have to so instead of adopting a two-year plan, they’re adopting a three-year plan.”

One major reason the council may raise utility rates is the new waste water treatment facility that is under construction.

“We have a waste treatment plant we’ll have to maintain another year from now,” Turner said. “We’ve had to make commitments to (Georgia Environmental Facilities Authority) that the revenue we would bring in over the next few years would sustain the loan.”

But Lula officials say even if they do vote to increase rates, they will still be competitive.

“Of course we still have some of the better rates in North Georgia,” Turner said. “Even with these increases we’re still below most places.”

The average water bill in Lula is currently $16.91 and the average sewage bill is $21.91, based on 5,000 gallons of residential consumption.

The city council has discussed the possible rate increase and held public hearings but has not yet set a date to vote on the issue.

“I would like to hold it off until spring time, but it’s a council decision,” Turner said. “Everybody’s hurting economically.”