Port St. Lucie — The City Council on Tuesday approved on first reading an ordinance that would raise water rates by 3.5 percent, a change city staff said is driven by rising operational costs and regulatory requirements for wastewater treatment.

City officials said the increase would add about $1.26 to the monthly bill for an average customer using 5,000 gallons of water. Kevin Matijac, the city’s utility systems department director, told the council the proposed adjustment follows a Raftelis consultant analysis of revenues and expenditures and is intended to keep the utility’s enterprise fund balanced while funding operations and maintenance.

Matijac said the utilities department serves about 98,000 water customers and roughly 80,000 wastewater customers. He told the council that the utility has taken steps to limit borrowing for capital improvements and that the department has saved millions through direct purchasing for the Westport project, including an estimated $5 million to $6 million in sales-tax savings.

Vice Mayor Caraballo asked staff to note on the record the legislative and regulatory changes that have affected utility planning. Matijac cited a Basin Management Action Plan (BMAP) requirement that affected the city’s planned expansion of the Westport Wastewater Treatment Facility, saying the city chose not to expand capacity from 6 million to 12 million gallons per day as originally planned but instead to pursue improvements and a parallel force main to route flows to the Glades facility.

The rate proposal is for water only; no wastewater rate increase was proposed at this time. Matijac said the 3.5 percent adjustment is the result of a multi-year analysis intended to avoid larger, less predictable increases later.

At the same meeting the council also approved Resolution 25-R-53, authorizing the city manager to execute a State of Florida Department of Environmental Protection (DEP) GRAMA agreement for nutrient-reduction improvements at the Westport Wastewater Treatment Facility. Matijac told council members the agenda included an $11,000,000 GRAMA agreement tied to that project.

The ordinance (25-51) passed on first reading; the council will consider a final reading and adoption at a later meeting. The GRAMA agreement resolution was approved during the same session.

The city manager and Matijac said utility rates are charged to an enterprise fund and not to the general fund; utility revenues pay for utility staff salaries, operations, capital projects and bond covenants. Matijac and council members emphasized incremental increases historically used by the utility to manage inflation and avoid sudden large rate hikes.

Matijac and Vice Mayor Caraballo also described procurement and project decisions for the Westport improvements, including owner-direct purchasing to lower costs and design choices to meet higher effluent quality standards being required statewide.

Public comment at the start of the meeting included remarks from a resident who raised concerns about non-ad valorem assessments and referenced earlier comments by a councilmember; councilmembers addressed that public comment but did not change the utility item on the floor.

The council approved the first reading of ordinance 25-51 and approved Resolution 25-R-53 during the meeting. Additional public hearings or readings required for permanent adoption of the ordinance were not completed at this session.

Matijac and city staff said additional information and the sample bill that shows the impact of the proposed increase are included in the agenda backup materials.