HOGANSVILLE — City council members were divided on a vote to increase the city’s fee on utility rates Monday.

Council approved in a 3-2 vote to increase the city’s franchise fees by 1 percent, setting the rates for water, sewer and natural gas at 5 percent and electricity at 4 percent. The franchise fee for each utility is the amount over the gross cost to the city for providing the services, which contributes to the city’s general fund revenue.

Councilman Reginald Jackson said he didn’t think it was right to increase the electric rate because he said it currently covers the cost. City Manager James Woods said the rates were in line with franchise fees charged by companies like Comcast and AT&T.

Councilwoman Theresa Strickland also opposed the move, saying most of the utilities cover their costs. She and Jackson voted against the measure. The new rates are effectively immediately, according to the ordinance.

In other business, council members approved — unanimously — a change to the city’s calculation of its debt service payment on gas rates. The rates will be calculated by staff annually by July 1 to proactively set the amount needed to include in customers’ bills for the city to repay its bond debt. The rates will be determined and included in the budget for the council’s approval, Woods said.

Mayor Bill Stankiewicz said the move was advised by the city’s auditor and “clears a major hurdle” with the city’s bond insurer.

In another matter, council members also unanimously approved contracting with Woodstock-based Government Window LLC for an online, over the phone and in-house credit/debit card payment system. The company provides all equipment and software, said City Clerk Lisa Kelly, and there are no fees to the city — the company is paid through a 3.5 percent fee charged on the financial card user’s payment.

Previously, the city footed the bill for fees charged by financial transaction card companies to the tune of about $46,000 annually, Kelly said in a May meeting.

The city’s system will not take American Express cards. The company’s original fee proposal was 4 percent due to American Express charging a higher fee to merchants for using the card. Council members decided to drop the card — Kelly said about seven utility customers have used that brand — in favor of the lower rate.