Pelham residents and business owners will see higher utility bills beginning Jan. 1, as the City Council narrowly approved a motion to increase the city’s sewer fees during a Dec. 10 meeting.

The council approved the motion 3-2, with Council President Mike Dickens, and council members Teresa Nichols and Bill Meadows voting in favor of the increase. Council members Steve Powell and Karyl Rice voted against the motion.

The decision ended several weeks of council debate over how to offset the estimated $12.6 million the Pelham Water and Sewer Department has lost over the past 15 years.

The council approved a two-year sewer rate increase plan, which will gradually raise the rates in 2010 and 2011. Currently, Pelham residents pay a flat sewer rate of $22 per month.

Beginning Jan. 1, 2010, residential sewer customers will pay a flat rate of $23.15, which covers the first 3,000 gallons used. The city will then charge $3.65 per 1,000 gallons used after the initial 3,000 gallons.

Small commercial properties, like small businesses, trailer parks and apartments, will pay a flat rate of $52.38 for the first 7,500 gallons, and $4.05 per additional 1,000 gallons.

Beginning Jan. 1, 2011, the residential flat rate will increase to $24.30 for the first 3,000 gallons and the small commercial rate will jump to $60.75 for the first 7,500 gallons.

The 2011 charge per 1,000 gallons used over the initial 3,000 gallons will rise to $7.30 for residential customers and $8.10 for every 1,000 gallons used over the initial 7,500 gallons for small commercial customers.

The city will also charge a fee of $23.15 in 2010 and $24.30 in 2011 to customers who have access to the city’s sewer system but are not connected to it.

Although the council members all seemed to agree the city should pass a sewer rate increase, Rice and Powell said they did not agree with the two-year increase schedule.

“I don’t believe the two-year schedule is correct,” said Powell, who said the city should instead consider increasing the fees over the next three or four years. “That’s the only thing I really disagree with. I just don’t think two years is right.”

“I think we will be putting a great burden on those who will be paying this,” said Rice. “I also think we should raise the minimum usage to 5,000 gallons.”

Other council members said they were in favor of increasing funding to the Water and Sewer Department as quickly as possible.

“I originally supported this increase in one year,” said Nichols. “The two year plan is a compromise on my part.”

The increases will also allow the city to complete several federally mandated sewer projects without having to dip into its general fund reserves, Dickens said.

“The overriding theme with this was the importance of a sense of urgency,” Dickens said, noting the Water and Sewer Department has a “lot of work” to complete over the next four years to meet the federal mandates.

In other business, the council:

Approved $13,890 to be used to repair damaged roads in the Stonehaven Trail neighborhood.

Authorized the city to seek a $135,636 loan to purchase six new police cruisers.

Approved a $10,000 donation to the Alabama Symphony to be used for music education in Pelham and across the state.