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Commission adopts water and sewer rate increases to fund new treatment plant; staff to assess settlement proceeds for offsets
Summary
The City Commission on May 20 adopted water and sewer rate increases to help fund a planned new water treatment facility and utilities infrastructure; staff said the city will receive PFAS settlement proceeds and will analyze whether proceeds can offset near-term rate pressure
The City Commission approved an ordinance at second reading on May 20 that raises Delray Beach water and sanitary sewer user rates to help finance a planned new water treatment plant and follow-up system improvements.
Utilities Director Hassan Hajimiri told commissioners that the city had not raised rates for many years and that increased regulatory requirements, aging infrastructure and plans for a new plant have driven the need for a bond-funded, multi-year capital program. The ordinance adopted a schedule of annual increases over a five-year planning horizon to build reserves and support anticipated debt service for the new facility.
Hajimiri noted the city has updated cost assumptions since earlier planning and that the current estimated capital requirements are significantly larger than earlier figures. The increases approved at second reading will allow the utilities fund to meet projected cash-flow needs for construction and operations, he said.
Commissioners pressed staff on affordability and potential ways to soften the impact on households. City Manager and staff briefed the commission that the city expects to receive proceeds from national PFAS litigation settlements; outside counsel will present final disbursement numbers and timelines at a future meeting. The city attorney said settlement proceeds are not earmarked by statute and could be applied to utility capital or operating costs at the commission’s discretion.
The ordinance passed unanimously. Several commissioners asked staff to prepare follow-up analysis that considers settlement proceeds and other options for smoothing rate impacts on residential customers once the final settlement amounts and schedules are confirmed.
Ending: Staff said it will return with additional financial analysis and that a five-year re-evaluation is built into the rate plan so the commission can adjust future increases based on updated cost, funding and settlement information.
