Boynton Beach advances potential $470M utility transfer to Palm Beach County

Boynton Beach advances potential $470M utility transfer to Palm Beach CountyThe city commission approved valuation consulting contracts as it explores divesting its water and wastewater assets to fund a municipal endowment and avoid a looming $300 million infrastructure bond.

The proposed transfer includes 2.5 treatment plants and could generate $375 million to $470 million in upfront proceeds.

Commissioners authorized up to $300,000 for single-source valuation contracts with Hartman Consultants and Ryper Water Analytics.

Divesting the utility would eliminate the city's need to issue a $300 million bond for upcoming plant upgrades.

The city must resolve governance issues regarding a regional wastewater plant jointly owned with Delray Beach.

The City of Boynton Beach, Florida, is actively exploring the transfer of its water, wastewater, and reclaimed water utility to Palm Beach County, a move projected to yield between $375 million and $470 million in upfront proceeds. During a May 19 presentation on transformative financial initiatives, City Manager Daniel Dugger outlined the proposed transfer as a key pillar in establishing a $500 million municipal endowment fund aimed at long-term fiscal stability and property tax reduction. By divesting the utility, Boynton Beach would also avoid issuing a looming $300 million infrastructure bond required for upcoming treatment plant upgrades. To support ongoing negotiations with the county, the City Commission approved single-source professional service agreements to determine the utility's preliminary fair market value. Ryper Water Analytics was awarded a $95,060 contract to provide financial consulting and cash flow projections using the income approach. Hartman Consultants, LLC will receive $75,000 to produce a Consulting Valuation Report that reconciles cost, income, and market approaches. The commission authorized a total budget transfer of up to $300,000 to complete the comprehensive valuation effort. The proposed transfer involves the city's entire water and wastewater system, including its 2.5 treatment plants. A significant governance hurdle remains regarding the South Central Regional Wastewater Treatment Plant, which Boynton Beach jointly owns and operates with the neighboring City of Delray Beach. Additional transition considerations include severance obligations for approximately 141 utility employees, who would transition to the county payroll without forced layoffs. The city's presentation also noted an annualized depreciation gap between the city and county as a factor in the negotiations. City leadership views the transfer as a shield against potential state legislation limiting utility surcharges on out-of-city customers. If negotiations with Palm Beach County stall, officials indicated the city will proceed with the full annexation of its western utility customers to generate additional market interest.