Fort Lauderdale overhauls rate structures and hikes water capacity fees by 16%

Fort Lauderdale overhauls rate structures and hikes water capacity fees by 16%The Florida city is shifting its utility revenue model to increase fixed-cost recovery and revamp multi-family charges following a comprehensive rate study.

The city will increase its water capital expansion fee from $1,977 to $2,303 to ensure new development covers the full cost of capacity extensions.

Fixed charges for water will rise by 1% annually to reach a 20% cost recovery target, up from the current 15%.

Multi-family fixed charges will transition from meter-based pricing to a per-unit model set at 55% of the single-family base rate.

The commission favored a revised leak credit policy to cap bills at a customer's annual average, providing relief for massive usage spikes.

The City of Fort Lauderdale, Florida, approved structural changes to its water and wastewater rates and fees during a June 2, 2026, commission meeting. Kyle Stevens, a consultant with Stantec, presented the findings of a comprehensive rate study, recommending targeted shifts to insulate the utility against demand fluctuations and ensure growth pays for its share of infrastructure. A major change includes a 16% increase to the city's water capital expansion fee. Based on a buy-in method calculation, the fee will rise from $1,977 to $2,303 to achieve full cost recovery. The wastewater capacity fee will remain mostly flat, shifting only nominally from $1,888 to $1,896, as current data did not support a significant increase. The utility is also restructuring its fixed charges to improve revenue stability. Currently, fixed charges account for just 15% of water revenues, which Stevens noted is below the industry standard of 20% to 30%. Meanwhile, debt service obligations are projected to consume 36.7% of the water utility’s expenditures in 2027. To bridge this gap, the city will increase fixed cost recovery by 1% annually until it reaches the 20% threshold. For a standard 5/8-inch single-family meter, the monthly fixed charge will initially rise from $13.52 to $14.32. Multi-family properties will see a structural adjustment designed to enhance fixed cost recovery. Fixed charges for these properties will shift from being based on meter size to the number of units behind the meter, charged at 55% of the single-family 5/8-inch rate. This change aims to better reflect the potential demand placed on the system by high-density developments. On the volumetric side, the city is introducing a fourth tier for standalone irrigation meters. The new initial tier (0 to 8,000 gallons at $11.64) aligns irrigation pricing with single-family domestic usage profiles, which will lower bills for lower-volume users while increasing costs for usage above 14,000 gallons. Additionally, commissioners reached a consensus to revise the utility's leak credit policy. The current policy, which bills excessive usage at the lowest tier rate, costs the city approximately $3.5 million annually in credited revenue. The commission favored a new approach that will cap a customer's leak-impacted bill at their 12-month average, offering greater financial relief for extreme spikes. Staff noted that the ongoing rollout of automated metering infrastructure (AMI) and a new customer information system, expected by summer 2027, will naturally reduce large leak events through proactive customer notifications.