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Consultant outlines utility rate study, says impact fees cut wastewater borrowing; council presses for clearer bill breakdowns
Summary
A consultant told the City of Clermont council the city's accumulated wastewater impact fees reduced borrowing for a recent plant and that staff will present a multi-year rate path; council members pressed for clearer bill breakdowns and for study options that show how impact fees, grants and rates interact.
A consultant leading the City of Clermont's utility rate study told council members on the workshop agenda that the firm will develop a multi-year revenue sufficiency analysis meant to give the city options for setting water, wastewater, stormwater and sanitation rates.
The presentation recounted the city's prior work and financing choices, noting that a combined rate study completed in 2017 and a later 2022'23 water/wastewater study led to a five-year rate path adopted to support a wastewater-treatment expansion and bond issuance. The consultant said the city had collected "over $20 million in wastewater impact fees" that were applied toward the plant and reduced the amount of debt required. "Without those impact fees, your wastewater rates would be 16% higher today," the presenter said.
Why it matters: Council members and staff said the 2017'2022 period felt sudden to some residents and that the combination of deferred capital, faster-than-expected growth and COVID-era cost escalation drove sharper-than-expected rate increases. Councilors asked the consultant and city staff to make the financial tradeoffs explicit so residents can see what portion of a monthly bill pays for operations, what portion pays debt and what portion is reserved for future capital.
Council questions focused on three practical topics: the study's schedule and deliverables, how the city applies impact-fee revenue versus monthly-rate revenue to debt service, and how often impact fees may be legally updated. The presenter said the firm's work is a revenue-sufficiency study (not an operational efficiency study or a grant-finding service) and outlined a timeline that includes internal staff reviews in April, a May council workshop with alternatives, and later public hearings before any rate resolutions.
On the bill-level transparency question, staff and the consultant agreed that while it is technically possible to communicate the components of a water bill, separating charges on the invoice itself poses tradeoffs for rate design and low-income households. Finance staff recommended publishing clear, accessible pie charts in the annual budget and a short quarterly report that shows how much of system revenues are covering operations, debt and capital so customers can better understand the drivers of rate changes.
What comes next: The consultant will deliver financial models and alternatives for the council workshop in May and will coordinate with the city attorney and staff on notice and statutory requirements for fee changes. Staff was directed to return with recommended public communications and options for how the council might present the bill components to residents.
