ECUA advances impact fee study to bridge massive infrastructure funding gap

ECUA advances impact fee study to bridge massive infrastructure funding gapDriven by fees that have remained stagnant since 2004 and soaring regional construction costs, the Emerald Coast Utilities Authority has voted to engage Raftelis to justify substantial increases to its water and wastewater impact fees.

ECUA's impact fees have remained flat since 2004 at $845 for water and $1,600 for wastewater for a standard 5/8-inch meter.

Staff highlighted soaring regional infrastructure costs, citing neighboring Milton's 2-MGD wastewater plant estimate ballooning to $100 million.

The board voted 4-1 to hire Raftelis Financial Consultants for an estimated $64,000 to $65,000 to conduct the legally required fee study.

Florida statute caps impact fee increases at 12.5% per year, meaning it will likely take ECUA a decade to align fees with current market costs.

The Emerald Coast Utilities Authority (ECUA) board voted 4-1 on February 24 to engage Raftelis Financial Consultants for a comprehensive impact fee study. The move comes as the utility struggles to fund regional "backbone" water and wastewater infrastructure amid explosive growth and escalating construction costs. ECUA's impact fees have not been adjusted since 2004, currently sitting at $845 for water and $1,600 for wastewater for a standard 5/8-inch meter. During the meeting, staff noted that the Engineering News-Record construction cost index has increased 98% over the same period, leaving the utility's revenues severely disconnected from current market realities. Staff presented staggering regional cost escalations to underscore the urgency of the rate adjustments. The nearby City of Milton's 2-MGD wastewater plant estimate recently surged to approximately $100 million, while Santa Rosa County bid a 0.5-MGD plant at $28 million. ECUA's own recent estimates project that a new 5-MGD central wellfield will cost $50 million, and a 2-million-gallon elevated storage tank will cost $8 million. The board debated the necessity of the estimated $64,000 to $65,000 study. Several members questioned whether the utility could bypass the Florida statutory requirement for a recent study by renaming the charges to "tap fees" or "connection fees." However, the board ultimately favored strict legal compliance to avoid potential state pushback, agreeing that a formal study was necessary to justify the steep hikes required. Raftelis brings a deep track record in this specific area, having recently completed similar water and sewer impact fee updates for nearby Gulf Breeze, as well as municipalities like Ocala and Charlotte County. Their studies are designed to meet Florida's strict "dual rational nexus" test, ensuring fees are legally defensible and directly tied to growth-induced costs. Under Florida Statute 163, impact fee increases are generally capped at 12.5% annually. Board members acknowledged that, given the massive revenue shortfall, it will likely take at least 10 years of consecutive maximum increases for ECUA to align its fees with the actual cost of growth. The Raftelis study is expected to be completed in 60 days.