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Board hears water‑plant and bond update as board members warn of steep, multi‑year rate increases
Summary
Consultants reported steady progress on the Riviera Beach water system modernization program—6 of 7 GMPs awarded—with the final transmission GMP pending; finance staff and board members spent extensive time on projected rate increases tied to the $470M–$475M borrowing and discussed seeking SRF principal forgiveness and other mitigation options.
Consultants and the board on July 14 discussed progress on the Riviera Beach water system modernization program and the financing pressures that will drive multi‑year water and sewer rate increases.
Nigel Grace, owner’s representative for Brown & Caldwell, told the Utility Special District the overall program is “on track,” with six of an anticipated seven GMP (guaranteed maximum price) contracts awarded and underway; he said GMP 7 — the finished-water transmission infrastructure that will connect the new plant to the existing distribution system — has not yet been awarded and will require a crossing under railroad tracks. Grace said the water‑plant delivery is still targeted for November 2029.
JV project staff (Haskell/CDM Smith) described construction milestones: surficial wells targeting beneficial use by end of August, continued deep injection-well drilling (reaching 3,500 feet so far) and permitting and site work for plant buildings. The joint venture and staff said they are coordinating with Florida Power & Light and other stakeholders on standby generation and other critical systems.
On financing and rates, board members pressed for ways to reduce the burden on residents. A chart discussed in the meeting showed a ~30% rate increase in 2025 and projected additional double‑digit increases in subsequent years; one board member calculated a compounded 63% increase over two years under the study scenario and warned of affordability concerns for residents on fixed incomes. Finance Director Randy Sherman confirmed that the chart’s year‑over‑year percentages are additive across the projection period and noted the district must structure rates to meet annual debt‑service obligations tied to the project: “On this, it’s gonna be almost, you know, dollars 32,000,000 a year of debt service,” he said, and that the plant adds an estimated cost component expressed as about $11.41 per thousand gallons in the study model.
Consultants and staff outlined mitigation strategies they are pursuing: securing SRF (State Revolving Fund) loans and principal forgiveness (the board recently secured $5 million of principal forgiveness for a prior request), pursuing alternative water-supply funding through the South Florida Water Management District and Florida DEP, exploring federal financing options (WIFIA) and seeking debt relief at the state level. Consultants noted principal forgiveness prioritizes small and disadvantaged communities, and staff said the district will continue to apply for available forgiveness and grants to lower overall borrowing needs.
Board members also asked staff to analyze options that could move some charges from monthly utility bills to the tax roll — a financing tradeoff that would change how the cost appears to residents but would not erase the total cost — and to prepare options for the budget process. The board directed bond counsel to coordinate with city legal counsel to explore potential legal/financial options to reduce resident impacts on rates.
Next steps: staff and bond counsel will return with requested GMP‑7 cost estimates, updated financing scenarios, and any grant/forgiveness outcomes as they are secured; the board flagged the item as a top priority in upcoming budget deliberations.
