The Austin City Council has taken the first steps to help the Austin Utilities build a new central administrative facility.

At a Tuesday work session, the council preliminarily approved requests to alter the Austin Utilities Payment in Lieu of Taxes (PILOT) agreement and a resolution to allow Austin Utilities to reimburse itself once the municipal energy company acquires $18 million in bonds for a new, $18.6 million project.

Austin Utilities General Manager Mark Nibaur came before council members during a work session to request those first steps to a bond, which must go through the city so the Utilities can build its new facility near Todd Park.

“Before we go any further, we wanted to approach the council about this,” he said.

Utilities officials recently increased rates to help pay for the project and estimated bond payments over the next few years. Electric rates increased 1.77 percent, gas rates increased 3.5 percent and water rates increased 6.9 percent starting Jan. 1.

That increase is what prompted a change to the company’s PILOT agreement, which the Utilities uses to pay the city instead of taxes.

Utilities officials estimate an average increase of $8.18 per month in utilities payments for residential customers and a 1 to 3 percent increase per month for commercial properties.

Nibaur said the company is looking to issue bonds later this year. Utilities officials may get a $9 million bond in July and another one in early 2016 if they believe the interest rates will work in their favor, otherwise the company could ask the city to bond all $18 million at once.

Though the city won’t make payments on the bond — all the financial burden will go to the Utilties — the city won’t be able to take on more debt in 2015 and 2016 because of the project, according to Finance Director Tom Dankert. He said the city didn’t have plans to take on more debt aside from the Utilities bond.

Utilities officials are looking to consolidate office operations, including customer service, staff operations and administrative duties, from the seven buildings utilities workers use.

Though Austin Utilities has for years looked at options to improve its efficiencies — utilities officials bought 23 acres south of Todd Park in 2009 to potentially host a new building. But at that time, Nibaur said the time wasn’t right to move forward until utilities officials decommissioned the downtown power plant and looked at its options. The city has already decommissioned to downtown plant, and the northeast plant is set to go offline starting in 2016.

The Austin City Council will likely discuss and approve a bond issuance in March.