Council hears consultant recommending higher water and wastewater capacity fees with four‑year phase‑in
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Summary
City finance staff and consultants presented a five‑year review of water and wastewater capacity fees, recommending higher calculated fees that would be phased in over four years beginning March 1, 2027, while exempting qualified affordable housing. Councilors pressed consultants about who would bear any gap created by statutory fee caps.
City finance staff and a consulting team told the Tampa City Council that the city’s current water and wastewater capacity fees do not fully cover the system‑level costs of treatment and transmission and recommended higher fees phased in over four years beginning March 1, 2027.
The recommendation, presented by Murray Hamilton of the consulting team and summarized by Mike Perry of Revenue and Finance, stems from a statutorily mandated five‑year review. Hamilton said the firm calculated a system‑wide treatment cost that produced a water treatment component of $1,837 per equivalent residential unit; Florida statute, he said, would cap the statutory maximum for that component at $1,530 and requires a four‑year phase‑in for any increase. "We believe that the city council should consider adopting our proposed fees," Hamilton said, noting the study excluded costs that state law or accounting practice prohibits from being funded through impact fees.
Brad Bear, deputy administrator of infrastructure, told council the team had sought feedback from the development community and recommended the four‑year phase‑in to give developers time to incorporate the new fees into pricing. "The feedback from the development community was the study was very well done ... and they appreciated a phase‑in," Bear said.
Several council members pressed the consultants on the distributional effects of the statutory cap. Councilwoman Hertek asked who would pay the remaining system cost if the city cannot charge the full calculated amount; Hamilton replied that, to the extent statutory limits bind, the difference would effectively fall to existing ratepayers and the utility’s bond and capital plans. He also characterized the near‑term revenue impact as modest: once fully implemented the proposed schedule would generate an additional roughly $1.5–$2 million a year for the utility system. "If the proposed fees are implemented by year 4, they would generate about 1 and a half to $2,000,000 a year in additional revenues," Hamilton said.
Councilman Carlson asked for clearer information on the per‑customer effect; Hamilton estimated the immediate rate impact would likely be small—"maybe a dollar a month or maybe less"—but emphasized the purpose of impact fees is to have new development pay its proportionate share of capacity costs so existing customers are not left funding new growth.
The proposal would preserve the city’s long‑standing exemption for qualified affordable housing projects, the consultants and staff said. Staff noted the revised fees would not become effective until after the phase‑in, and that the ordinance would be presented for first reading before council returns to the subject.
The council did not adopt the ordinance at the meeting; staff noted item 23 was before the body as first reading and flagged follow‑up slides and a regional fee comparison. Next steps include formal ordinance drafting, public notice, and the phased implementation beginning in 2027 if adopted.
