Dunedin approves multi‑year water and sewer rate package as utility leaders cite inflation, supply and regulatory costs

The City Commission unanimously adopted Ordinance 25‑O‑4 on June 5 to raise water and sewer rates after staff and consultants presented a multi‑year rate study the city says is required to stabilize the utility enterprise fund.

Clayton (Clay) Watkins, Utilities and Engineering, told commissioners the utility must increase revenue to fund capital replacements, to cover rising operating costs and to finance projects that respond to regulatory changes. Watkins said industrywide cost pressures — higher construction costs, long lead times for parts and “vendor notices” of sharp price increases for some materials — have tightened the city’s options.

Consultant Tristan Townsend of Raftelis (the rate consultant) highlighted regulatory drivers tied to state law requiring alternatives to surface‑water discharge at wastewater plants and noted capital needs identified in the utility’s capital improvement program. Townsend said, “there’s about 16,000,000 budget in the capital program to address the reclaimed storage tank and also the ejection well,” placing the capital cost associated with reclaimed water infrastructure and well injection among the larger items in the plan.

Staff and consultants identified the following main drivers for higher rates: inflation and construction cost escalation (including a cited 22% construction cost increase and vendor notices of raw‑material price jumps), higher electricity costs, and regulatory requirements that will require new infrastructure (reclaimed storage and deep‑well injection to meet state timelines). Staff said they are recommending a rate schedule that front‑loads larger increases in the near term to fund projects in the capital program and then smooths increases later in the multi‑year plan.

City staff described outreach and mitigation steps for customers. Utilities staff said billing personnel will proactively contact accounts that show sudden spikes; the city’s billing system and meter telemetry allow staff to spot unusual usage. Staff noted a one‑time customer leak forgiveness program, recommended conservation messaging, and said they are developing rebate/incentive programs and communications with sustainability staff to promote water‑saving measures. The utility also pointed to an “Eye on Water” tool customers can use to monitor consumption in near real‑time.

Commissioners and several public speakers expressed concern about the bill impacts on residents. Staff said the utility issued about $200,000 in bill credits last year for leak adjustments and that billing staff already work with customers to evaluate high bills. Staff also noted social service and community partners who assist qualified customers in need.

The commission’s vote completed second reading of Ordinance 25‑O‑4 and adopted the rate package. Commissioners asked staff to continue to look for state or grant support and to return with additional customer‑assistance and conservation programs.

The ordinance takes effect according to the schedule contained in the adopted rate study; customers with billing questions were directed to the utility billing office where staff can review usage records, apply leak forgiveness where applicable, and discuss assistance options.