City proposes big utility rate increases to fund aging water plants, seeks line of credit and 2028 bonds

City utility officials told the Boynton Beach City Commission on July 7 that they will ask for stepped rate increases beginning with a proposed 15% rise for fiscal 2026 to begin funding a multi‑year program of repairs, replacements and a likely water‑plant reconstruction expected to require hundreds of millions of dollars.

The utilities department presented a forecast prepared with consultant Ryper Analytics showing that the city’s two water treatment plants (one built in the early 1960s and the other about 32 years old) and related infrastructure require accelerated reinvestment. “So basically, the utilities is proposing, substantial increase in our budget. We are asking for an 11,500,000.0, dollars increase. It's an 18.4% increase,” Utilities Director Poonam Calcutt said during the workshop.

The nut graf: staff said the increases are aimed at avoiding a cascade of failures and emergency costs after decades of deferred capital work. Consultant Ryan Smith said the recommended immediate step is a 15% rate hike for FY2026 and a plan of further increases (the current projection shows additional 8% adjustments in later years) so the city can both raise its annual reinvestment transfers and maintain cash reserves before issuing long‑term bonds to pay for plant replacement. “We are making a higher rate recommendation for fiscal year 2026,” Smith said.

Details and funding plan - Proposed near‑term measures: raise the utilities’ annual transfer to reinvestment (R&R) from about $9 million to $15 million in FY2026; secure a $50 million line of credit to keep cash strong while projects proceed; and plan a 2028 revenue bond issue to fund the large water‑plant work. - Cost drivers: older facilities (East WTP built in the early 1960s; West WTP roughly three decades old), rising materials and vehicle replacement costs, and stricter regulatory and resiliency requirements. - Scale: staff presented an illustrative capital program that included a $250 million planning figure for major water‑plant projects; exact scope and price will be refined during design and the SRF/loan assessment. - Rate positioning: even with the proposed increases, models in the presentation showed Boynton Beach’s typical residential bill would be at or below the current average for comparable local utilities in today’s dollars; staff said that is important to preserve competitive pricing while funding infrastructure.

What happens if the city does not act Officials warned that failure to fund the capital program would leave the city exposed to either emergency repair costs and service failures or to market outcomes such as private takeover of utilities. Consultant Smith noted that reputable bond markets will expect a clear funding plan and reserves; to be ready, staff recommended building reinvestment deposits, keeping days‑of‑cash strong and securing short‑term credit so the city can avoid selling long‑term debt from a weak cash position.

Next steps Smith and Calcutt said the work now moves to design and risk/condition assessments that will refine total costs and timing. Staff recommended that commissioners consider the FY2026 increase as part of the budget adoption process and authorized staff to bring a formal ordinance and rate tables back for the public hearings scheduled in September.

Ending: city staff and the consultant underscored that the increases are intended to smooth an otherwise steep capital need and to protect the city from higher emergency costs in future years. The commission asked for additional detail on scenarios, recurring maintenance charges for new equipment, and how revenues will be pledged when the city sells bonds; staff said they will provide those details before the September hearings.