Punta Gorda advisory board recommends 12% annual water-sewer rate increases, urges council to pursue full impact-fee update

The Punta Gorda Utilities Advisory Board on July 28 recommended a 12% annual increase to water and sewer rates through 2029 and endorsed pursuing a full, immediate update to the city’s water and sewer impact fees using the statutory “extraordinary measures” process.

The recommendation followed a presentation from Danica, a manager with Stantec, who told the board, “we are recommending that, there's a rate increase of 12% annually through 2029, and that is required in order to meet the cost requirements.” The board voted unanimously to forward both the rate recommendation and the consultant’s proposal to city council for consideration.

The recommendation aims to cover a projected 10‑year capital plan that Stantec reported at about $197 million and an updated combined cost estimate of roughly $112 million for two major water projects first identified in the city’s water supply plan. The consultant said the proposed increases would hold a three‑month operating reserve (about $5 million) and avoid depleting operating funds by the late 2020s on the current forecast.

Why it matters: Punta Gorda’s capital needs include an expansion of the reverse‑osmosis (RO) plant, service‑water rehabilitation and other projects the consultant said are driving increased debt service and near‑term cash requirements. Stantec’s analysis shows sewer revenues fall below current cost‑to‑serve levels while water revenues are comparatively higher; the consultant recommended allocating a larger share of the first year’s increase to sewer to move the systems closer to cost recovery.

Key details from the study and meeting - The consultant proposed 12% increases each year through 2029; Stantec said that corresponds to about an $11.20 per month increase for a typical customer in 2026 under the scenario shown to the board. - Stantec recommended keeping the fixed monthly customer charges largely unchanged and placing more of the increase on volumetric charges, with a restructuring that collapses the city’s top two water tiers and raises the upper tier price to promote conservation. - The consultant reported a five‑year capital improvement program that includes the water treatment rehab, Shell Creek RO expansion, meter replacements and other projects; staff and the consultant used a conservative 1% annual growth assumption for new units in the forecast. - On cost allocation for 2026 the consultant recommended shifting 25% of the new revenue toward sewer and 5% toward water to narrow the sewer shortfall reported for the test year.

Impact‑fee process and board action Danica explained statutory limits on impact‑fee phasing under Florida law and outlined the “extraordinary measures” alternative that allows the city to implement the full calculated fee immediately if it documents demonstrated need, holds two public workshops and secures a two‑thirds vote of council followed by a 90‑day notice period. Stantec recommended pursuing that extraordinary‑measures path for Punta Gorda’s updated water and sewer impact fees. The board voted unanimously to recommend that course.

What board members said Tom Spencer, Punta Gorda’s utilities director, framed the financial choices as driven by system capacity and near‑term needs tied to the water supply plan. He told the board that work on the water supply plan in 2023–24 showed the city needed additional capacity now. “We were told repeatedly that we were at a breaking point where we don't have enough water and we need to do that expansion,” Spencer said during the discussion.

Board members raised questions about who the highest‑use customers are, equity between single‑family and multi‑unit accounts, meter‑reading completion rates, and potential grant opportunities to offset capital costs. Stantec and staff said they included some elasticity assumptions (i.e., possible consumption reductions when prices rise) when modeling revenues and that staff would continue to search for grants and state revolving fund loans.

Next steps The Utilities Advisory Board forwarded both recommendations to city council: (1) to pursue the “extraordinary measures” impact‑fee update and (2) to approve the first year’s 12% rate increase and a plan to phase further increases through 2029 as shown in the Stantec report. Each item will return to council for formal action; Stantec and staff said the impact‑fee path requires two public workshops before council action.

Votes at a glance - Recommendation to pursue extraordinary‑measures implementation of updated water and sewer impact fees: Motion passed unanimously (all board members present voted yes). - Recommendation to adopt a 12% water‑and‑sewer rate increase for fiscal year 2026 (and a plan for 12% annual increases through 2029 as modeled): Motion passed unanimously (all board members present voted yes).