Riviera Beach utility board: GMP negotiations put plant price at $280M; overall project pegged near $400M, staff warns residents to expect rate increases

The City of Riviera Beach Utility Special District heard progress reports on Guaranteed Maximum Price (GMP) negotiations and a detailed briefing on how the project will be funded.

Nigel Grace of Brown and Caldwell told the board that “the progress has been quite significant” since GMP 5 was submitted Oct. 31, and that a few outstanding items remained to be resolved with the joint venture so a final GMP could be presented to the board, possibly at a special meeting this month. Mike Poisington, representing the Haskell/CDM Smith joint venture, said the GMP currently “is at $280,000,000 for the project, for the GMP,” and that the figure covers the plant portion only. Poisington also said the JV will commit to a 15% local participation target for Palm Beach County contractors.

Director Patrick Neiman explained what the $280 million represents: “It’s the portion that will actually sit at the Avenue L site that will include ground storage tanks, pumps, the actual treatment technology,” while the conveyance system—needed to move raw water from new wells to the plant and connect treated water to the distribution system—remains separate and is estimated at roughly $120 million.

Randy Sherman, director of finance for the utility special district, said the district modeled a $400 million project when setting rates. “The project cost that was built into those rates was 400,000,000,” Sherman said, and the district has already adopted multi-year rate increases to position itself for borrowing.

Board members pressed staff on comparisons and alternatives. One member asked whether another $250 million-plus plant was being built in Florida for a like-for-like comparison; staff said comparable greenfield plants are rare and only certain components are useful for direct benchmarking. Concerns focused on affordability: several members stressed that residents on fixed incomes could be disproportionately affected if the district must rely heavily on rate revenue to repay bonds.

On financing, staff and officials described the capital stack the district is pursuing: federal WIFIA loans, state revolving fund money (the state program may cover up to 50% depending on economic status), and settlement proceeds from PFAS litigation. Staff noted a roughly $12 million settlement tied to PFAS contamination that has been set aside for the water-treatment project. Still, board and staff cautioned that federal grants or congressional appropriations alone are unlikely to cover a large portion of the cost.

Director Neiman and other staff said operational costs should remain comparable to other chemical- and power-intensive plants, although chemical and power use will increase. Neiman stressed the regulatory driver: “In 2029, the federal regulation for PFAS require us to” meet new standards, making plant upgrades mandatory.

The board asked for more detail on the final GMP, comparisons, and a clear plan for funding and resident impacts before any final approvals. Staff said they expect a finalized GMP number by early January and would bring it to the board as soon as negotiations are concluded.

The discussion concluded with staff saying they will provide additional cost, rate and funding breakdowns and schedule follow-up briefings for the board.