West Palm Beach approves $6.2 million interlocal agreement with Town of Palm Beach for water system repairs

The West Palm Beach City Commission on March 16 approved two resolutions authorizing an interlocal agreement with the Town of Palm Beach and the transfer of about $6.2 million from a dedicated utility reserve to fund renewal and replacement projects in the town’s water system.

Public Utilities Director Victor Krosi told the commission the work covered by resolution 8-26 includes replacing roughly 2,500 feet of aging pipe on Coconut (transcript: "Cocoon Nut") Road, replacing fire hydrants, and installing a new water valve on North Lake Way. Resolution 9-26F would move funds into a special R&R account to pay for that work.

Krosi said the funding comes from a reserve created under a 1999 franchise agreement that requires the city to set aside 5% of gross water sales from Town of Palm Beach customers for renewal and replacement projects. He told commissioners that since the last set of projects that reserve has grown to just over $6.2 million and that no city general-fund dollars would be used for this action.

President Lambert asked for confirmation that the money was exclusively from the town-specific reserve; Krosi confirmed the funds are tracked separately and used only for town customers. He also noted the original 1999 franchise included clauses allowing extension and said the city and town are negotiating the future arrangement.

A commissioner moved and seconded approval of both resolutions. With no recorded opposition, the commission voted to carry the measures unanimously.

The commission’s action authorizes the city to proceed with the interlocal agreement and to transfer the designated reserve dollars into the special account set aside for the town’s R&R projects. The staff presentation said similar interlocal agreements were used for joint projects in 2018 and 2020. The city indicated it will return with additional details regarding agreements under negotiation with the town when available.