Dowagiac businesses and residents who use the city’s electric and sewer services may see a slight increase on their bills next month.

The Dowagiac City Council discussed raising the city’s utility rates during their first meeting of 2014 on Monday. Officials proposed raising the current electricity rate by 1.75 percent and increasing the city’s sewage rate by 2 percent.

The proposed raises are under what the city originally estimated it would require for the year, said City Manager Kevin Anderson.

“Last year, at budget time, when we were looking at the electric, we anticipating that we would need a 2.5 percent increase to cover what we we believed would be an increased cost of wholesale power,” Anderson said. “The good news is that contract we entered into a number of years ago has stabilized quite a bit, it did go up as much as we anticipated.”

The increased electric rate will still fall under the average cost of living, Anderson said.

While the sewer rate may see a slight increase as a result of ongoing capital projects, the cost of water will likely remain the same it as it was last year, Anderson added.

“The water fund continues to remain very strong,” he said. “With the additional contracts that we’ve entered into for water management, we’ve been able to increase some revenue streams there and there is not any need for any increase in water for this year.”

Anderson said the additional revenue brought in by the proposed increases should help the city stay on top of bills and maintain a healthy city fund balance throughout 2014.

“I think it’s doing what is appropriate and no more,” said Mayor Don Lyons.

The increased rates will be part of a city ordinance that will be voted on by the council at its next meeting in two weeks.

The council also received a report on the results of the city’s audit for 2013. The audit, which was conducted by the firm Yeo & Yeo, found that the city’s fiscal condition remained stable over the year, with a slight decrease in general fund revenues of less than $100,000 compared to 2012.

“You’re maintaining a healthy conservative nature,” said Kristi Watson, a representative with Yeo & Yeo. “Even though the economy swings have been pretty strong over the last four to five years, Dowagiac has held strong and not fell victim to such swings.”

The council also appointed Peggy Hood to fill a vacancy on the city’s Dial-a-Ride-Transit council during Monday’s meeting. The members also approved the annual Martin Luther King Day March, organized by Second Baptist Church.