Two proposals to raise Atlanta's water and sewer rates moved forward Tuesday.

One would boost rates 27.5 percent this year followed by three consecutive rate hikes at about 12 percent. The other would impose a 15 percent penalty to make up for water revenue the city has lost through conservation during the drought.

Both moved without a formal recommendation of support but will be considered by the council over the next 20 days as the panel tries to wrap up the fiscal year 2009 budget.

Water utility officials say the increases are needed to continue to pay for the bonds Atlanta is using for the $4 billion program to overhaul its aging water and sewer systems.

If the council approves the conservation penalty, utility officials say they can scale it back if the drought ends and water use returns to its pre-drought levels.

—DAVID BENNETT