Punta Gorda consultants recommend up to 47% rise in water and sewer impact fees, citing near‑term capital needs

Consultants presenting a demonstrated‑needs study told Punta Gorda City Council members and the Utility Advisory Board on the evening of the public workshop that rising capital costs and near‑term expansion needs support raising water and sewer impact fees.

Danica Katz of Stantec presented the study and the three “extraordinary circumstances” that the firm says justify an increase under the Florida Impact Fee Act. "Impact fees ... are intended to be one time charges to recover the cost of capacity to serve new growth and development," Katz said during the presentation.

The study says water and sewer expansion costs have more than doubled since the last study in 2020 and lists several near‑term projects, including a reverse osmosis (RO) plant expansion and a well‑field project that would add about 4 million gallons of capacity. Stantec reported the RO plant’s per‑gallon cost rose from about $10 per gallon‑per‑day in the 2020 study to about $14 per gallon‑per‑day in the current analysis, a roughly 40% increase.

Stantec showed that roughly 70% of identified expansion costs fall before 2028 and that about 90% of a 10‑year capital improvement plan occurs before 2030. The study modelled a scenario in which keeping current impact fees would mean about $1 million less revenue per year for 10 years — which Stantec said would require roughly $11 million more borrowing — and projected annual debt service of about $5.6 million in 2030 (roughly 24% of total rate revenue in that scenario).

On fees themselves, the consultant displayed a combined current water‑and‑sewer fee of about $4,257 and said the calculated fee under the study would yield roughly a 47% increase on a combined basis.

City staff and consultants outlined the legal and procedural constraints. Katz summarized applicable phase‑in rules under the Florida Impact Fee Act: increases under 25% may be phased over two equal annual increments; increases between 25% and 50% may be phased over four equal annual increments; and increases exceeding 50% are not eligible for standard phasing. The act also allows use of an extraordinary‑circumstances exception only with a demonstrated‑needs study, two publicly noticed dedicated workshops and a two‑thirds vote by council.

Councilmember Greg Julian asked how recent state legislation (referred to in the meeting as SB 180) could affect the city’s ability to raise fees; Katz said January 2026 changes appear to add unanimous‑vote requirements and additional phasing for some changes, and staff said that uncertainty was one reason they are pursuing the current timeline.

Resident and business owner Bob Fritz asked several procedural questions about who pays impact fees and whether fees are charged for developments outside the city but within the city’s service area. Tom Spencer, Punta Gorda utilities director, replied that impact fees are collected for customers both inside and outside the city limits. Spencer and finance staff also said the city is examining separate billing for fire‑line or sprinkler standby charges; the draft Chapter 17 (utilities ordinance) does not yet include such a charge but staff said they are “looking at” billing for fire service lines.

Next steps outlined by staff and the consultant include a second publicly noticed dedicated workshop (the consultant listed a November 17 session), two readings of an ordinance in November and early December, and a 90‑day notice period after council approval before a new fee becomes effective (staff estimated implementation in early March). Staff said the city must follow the public‑notice and vote requirements of the state act before adopting any extraordinary‑circumstances increase.

No formal vote occurred at the workshop; staff said the presentation and public workshop comments will inform the ordinance drafted for council readings.

A copy of the full demonstrated‑needs memo and the consultant slides were presented at the meeting and will be posted with subsequent ordinance materials as the item moves through the public‑hearing process.