Ocala consultant recommends 5% annual water and sewer rate increases, higher impact fees; hearings set in June

Murray Hamilton, a vice president with consultant Reftellus, told the Ocala City Council at its April 29 work session that the city’s water and wastewater utility needs new revenue to cover projected capital projects and operating costs and recommended a package of rate and fee changes, phased over the next five years, with public hearings planned in June.

Hamilton said the study, which updates the city’s last rate study and looks out to fiscal 2030, recommends annual increases of 5% to monthly base and volumetric water and sewer charges through fiscal 2029 and an annual index in 2030 tied to a water and sewer maintenance-services index (not less than 4%). He also recommended a commercial “true up” (about $0.11 per 1,000 gallons for a typical commercial account, phased in over five years) and an update to development impact fees, with increases limited by recent changes in Florida law and phased in where required.

The recommendation matters because the city’s five-year capital improvement program (CIP) that the study incorporates includes roughly $116 million in investments, with Water Treatment Plant No. 2 alone estimated at about $50 million and roughly $25 million in master-plan improvements. Hamilton said those long-lived assets and planned staffing additions will raise operating costs and that the city should consider long-term borrowing, including the Florida Department of Environmental Protection State Revolving Fund (SRF) loan program, to spread repayment. Hamilton noted SRF loans allow drawing construction funds over project life and said the first SRF repayment for the proposed WTP No. 2 would not be due until about 2030, which gives the utility time…