A central topic was the city’s water budget, part of a broader $80 million Utility Services budget within the total city budget of $296 million. The City Manager emphasized the distinctive nature of this budget due to its significant capital investments and its operation as an independent proprietary fund. Plans for proposed rate adjustments and connection fee increases were discussed, which are important to the budget’s financial structure. These adjustments would impact the Capital Improvement Program (CIP) over the next five years, with the City Manager underscoring the importance of understanding revenue generation through user fees and connection fees.

Gary Hubbard, the director of Winter Haven Water, presented the utility department’s goals, linking them to the city commission’s pillars of quality of life, community safety, infrastructure, responsible government, and environmental stewardship. A significant portion of the budget involves capital projects, with a five-year CIP budget totaling approximately $345 million. Hubbard mentioned proposed rate increases of 5% for water and 7.5% for sewer, effective October 1, 2024, and increases in connection fees to $3,858 for water and $8,175 for sewer, set to take effect January 1, 2025.

The financial strategy includes a WIFIA (Water Infrastructure Finance and Innovation Act) loan, anticipated to cover about 49% of the cost for a new Water Resource facility, estimated at $178 million. The remaining 51% would likely be financed through revenue bonds. The WIFIA loan’s interest rate stands at 4.5%, while previously issued revenue bonds had interest rates around 3.2%. This sparked a discussion on how these rates could influence the city’s financial decisions, particularly regarding the facility’s construction.

Hubbard suggested a timeline of four to five years for completing the project phases. The City Manager added that using revenue bonds offers flexibility over a single WIFIA loan, as taking the full WIFIA loan could lock the city into a fixed interest rate that might not be favorable if rates decrease in the future. This highlighted the need for a strategic approach to funding, considering market conditions and potential interest rate shifts.

The commission discussed the utility budget’s implications for employees, including a 22% step plan and cost-of-living adjustments aimed at improving compensation and operational efficiency. Five new positions were proposed, bringing the total to 128 full-time and three part-time positions. The current combined water and wastewater rate for a standard single-family customer using 5,000 gallons per month is $58.27, with a proposed rate increase expected to raise the bill by approximately $4 to $5. The rate study aims to maintain lower rates for lower consumption tiers, though final rates remain uncertain as neighboring municipalities conduct similar studies.

The connection fee for new construction is currently around $5,866, with consultants recommending an increase to $12,000 and $33,000 for combined water and wastewater connection fees. This increase is necessary due to rising infrastructure costs and rapid population growth throughout Polk County and other areas. Neighboring cities are also considering similar adjustments. The consensus was that newcomers should cover their expenses through these connection fees.

The utility fund budget projects total revenues for the upcoming year at $80 million, with water sales and sewer charges accounting for roughly 43% and connection fees contributing around 20%. Total budgeted expenditures are $74.8 million, allocated for capital improvements, operating services, debt service, and repair and replacement programs. Concerns about the sustainability of projected revenues were raised, particularly in light of current construction trends. There was speculation on whether the proposed rates might deter development, though examples like Lake Alfred, where development continued robustly despite prior fee increases, were cited.

The city’s financial model spans 40 years, with annual adjustments based on actual conditions informing decisions about potential rate increases or construction project timing. The implications of annual debt service and capital improvement costs were discussed, with a significant capital improvement program planned over the next five years totaling over $400,000. The existing annual debt service does not include new debt, and concerns about the impact on credit ratings were raised, with reassurances given that timely debt payments have historically been met.

The budget included $1.5 million for rehabilitating air basins at the wastewater plant and provisions for sludge removal and EPA-mandated lead and copper line replacements. capital expenses are associated with two new water treatment plants. For instance, $8.2 million is projected for water treatment in 2025, escalating to $23 million in 2026. Spending at wastewater treatment facilities is expected to be minimal due to plans for decommissioning.

The meeting also addressed the Automated Meter Infrastructure (AMI) system, part of a broader five-year capital projects budget totaling $24.8 million, excluding land purchases. projects included the Water Resource facility, wetland restoration projects, and a new administrative complex. Interconnections with neighboring utilities aimed at enhancing resiliency and sustainability were discussed.

Traffic issues related to a proposed development on Lucerne Park Road were another significant concern. Residents expressed frustrations about current traffic conditions, particularly during peak times. While traffic is a issue, it was stated that there was no legal basis to deny the development based on traffic impacts alone. Efforts to improve traffic flow, including a roundabout project and collaborative road construction with property owners, were highlighted.

The commission also discussed an interlocal agreement with the Town of Dundee for water and wastewater utility services related to the Cypress Creek Village mobile home park Phase 5. The agreement allows Winter Haven to provide necessary services, with Dundee retaining responsibility for solid waste collection. A 25% surcharge for non-residents was clarified.