Dunedin proposes adjustments to water and sewer user fees amid rising operational costs

The City Commission Workshop held on May 7, 2025, in Dunedin, Florida, focused on critical discussions regarding utility cost increases and the financial sustainability of the city's water and sewer systems. The meeting began with an overview of the significant rise in operational costs for utilities, which have increased by approximately 26% since 2019. This rise is attributed to various factors, including chemicals, materials, supplies, and labor costs.

Commission members were informed that the city has been experiencing substantial cost increases, particularly in repairs and maintenance of aging infrastructure, some of which dates back to the 1950s. The discussion highlighted the importance of proactive capital investments, such as slip lining pipes, to extend their lifespan and avoid more costly replacements.

A detailed analysis was presented, showing the original and replacement costs of the city's infrastructure, which amount to $161 million and $382 million, respectively. The evaluation emphasized the need for a financial plan that accounts for both recurring operating costs and non-recurring capital needs. The city aims to ensure fiscal sustainability by setting aside adequate funds for future infrastructure replacements.

The workshop also addressed the gap between projected revenues and costs for the fiscal year 2025, which stands at approximately 25%. This discrepancy raises concerns about the potential need for a rate increase to balance the budget. However, the commission is exploring alternative plans to avoid rate shock for residents.

Additionally, the discussion included a comparison of Dunedin's reclaimed water rates with those of peer communities. It was noted that Dunedin's rates are among the lowest in the region, despite the increasing desirability of reclaimed water as an alternative water supply. The commission acknowledged the evolving perception of reclaimed water and the necessity to adjust rates accordingly to reflect its value.

In conclusion, the workshop underscored the city's commitment to addressing rising utility costs and ensuring the long-term sustainability of its water and sewer systems. The commission plans to continue evaluating financial strategies and will provide further reports to guide future decisions.