Fort Lauderdale projects steady utility rate hikes to fund Prospect Lake WTP and massive stormwater capital plan

Fort Lauderdale projects steady utility rate hikes to fund Prospect Lake WTP and massive stormwater capital planThe city's updated long-term financial plan outlines 5% annual water and sewer rate increases, alongside double-digit stormwater hikes, to support new treatment capacity, AMI implementation, and extensive climate resilience projects.

The new Prospect Lake Water Treatment Plant will add $15.6 million in operating costs in FY 2027, with availability payments escalating to $41 million by FY 2036.

The water and sewer fund anticipates issuing $430 million in debt between FY 2027 and FY 2033, alongside $40 million annually in cash-funded capital.

Stormwater rates are projected to increase by 20% in FY 2027 and 15% annually through FY 2032 to support major Phase 1 and Phase 2 infrastructure bonds.

The Central Regional Sewer Fund faces a projected 16.15% rate increase in FY 2027 driven by escalating renewal and replacement costs at the aging plant.

The City of Fort Lauderdale is bracing for sustained utility rate increases to finance a wave of major water, wastewater, and stormwater infrastructure upgrades over the next decade. According to the city's updated FY 2027-2036 long-term financial plan, presented by Stantec consultant Kyle Stevens during a June 16 commission meeting, all three major utility enterprise funds require significant capital injections and corresponding rate adjustments to maintain financial sustainability. In the Water and Sewer Fund, the city is preparing for the financial impact of the new Prospect Lake Water Treatment Plant coming online in FY 2027. The facility will add an estimated $15.6 million in new annual operating costs for chemicals, electricity, and personnel. Additionally, subordinate debt and availability payments for the plant will total $29 million to $30 million in FY 2027, escalating to $41 million by FY 2036. To support these obligations and a robust capital improvement plan, the model projects the need for 5% annual rate increases for both water and sewer services. The utility plans to deploy approximately $40 million annually in cash-funded capital from FY 2027 through FY 2031, supplemented by significant debt issuances: $100 million in FY 2027, $100 million in FY 2029, and $230 million in FY 2033. Meanwhile, the city's Advanced Metering Infrastructure (AMI) rollout is targeted for completion by the summer of 2027. The project is expected to generate $1.1 million in contractual savings beginning in FY 2028, alongside a projected 1.75% increase in billed consumption as older, less accurate meters are replaced. Fort Lauderdale's Stormwater Fund faces even steeper rate pressures due to a massive, debt-funded resilience program. The financial model assumes $230 million for the completion of Phase 1 projects and $100 million for Phase 2 planning, design, and initial construction. Looking further ahead, the city has slotted $350 million placeholders for future stormwater projects in FY 2029, FY 2032, and FY 2035. To service this debt, stormwater assessment rates are projected to jump 20% in FY 2027, followed by 15% annual increases through FY 2032, before dropping to 10% increases thereafter. The Central Regional Sewer Fund, which serves Fort Lauderdale (accounting for 84% of flows) and neighboring municipalities, is also experiencing near-term rate pressure due to aging infrastructure. Renewal and replacement expenses dictated by large-user agreements have surged from $9.4 million in FY 2018 to an anticipated $24.3 million in FY 2027. This escalation, combined with operational cost increases, necessitates a projected 16.15% rate increase in FY 2027 and a 5.77% increase in FY 2028. The regional fund anticipates issuing $127 million in debt in FY 2026, with a $60 million placeholder set for FY 2033.