Palm Beach County moves forward with Boynton Beach utility acquisition study

Palm Beach County moves forward with Boynton Beach utility acquisition studyPalm Beach County Water Utilities Department has received the green light from county commissioners to begin a multi-phase due diligence process for the potential takeover of the City of Boynton Beach's water system. The move follows a formal request from Boynton Beach and could lead to the consolidation of a utility facing a $466 million capital plan.

The Board of County Commissioners directed staff to proceed with Phase 1 of a due diligence process, a financial feasibility study expected to take 60 days.

The City of Boynton Beach utility serves 125,000 customers, has an operating budget over $72 million, and carries $53.4 million in debt.

Boynton Beach has a six-year capital improvement plan estimated at $466 million and has implemented a 15% rate increase, with further annual hikes of 8-11% planned.

The full acquisition process is outlined in four phases and could take between 12 and 24 months to complete, pending board approval at each stage.

Palm Beach County is officially exploring the acquisition of the City of Boynton Beach's water and sewer utility, a move that could consolidate a system serving 125,000 customers under the county's control. At a December 2 meeting, the Board of County Commissioners (BCC) directed the Palm Beach County Water Utilities Department (PBCWUD) to proceed with the first phase of a comprehensive due diligence process. The action was prompted by a formal request from the City of Boynton Beach. For PBCWUD, which serves nearly 600,000 residents and has grown to become Florida's third-largest water utility through decades of similar acquisitions, such a consolidation is familiar territory. In a presentation to the board, Water Utility Director Ali Bayad outlined the scope of the city's system and the proposed timeline for evaluating a potential takeover. The Boynton Beach utility operates two water treatment plants with a combined capacity of 34.4 MGD (130,200 m3/d) and has 150 employees. Its wastewater is handled in conjunction with the City of West Palm Beach. Financial pressures appear to be a key driver for the city. According to the presentation, the Boynton Beach utility has an annual operating budget of just over $72 million and is carrying $53.4 million in debt, requiring annual payments of $7.5 million. More significantly, the city faces a daunting six-year capital improvement plan from FY2025 to FY2030 totaling approximately $466 million, with a large portion dedicated to water supply and plant improvements in FY2028. To address its needs, the city has already implemented a 15% increase to its water and sewer rates for the 2025-2026 fiscal year and is planning further increases of between 8% and 11% annually over the next four years. A rate comparison presented by PBCWUD showed that Boynton Beach's current monthly bill for a typical residential customer is in the middle of the range for regional utilities, but the planned hikes would push it higher. Bayad detailed a four-phase due diligence plan for the board. The initial 60-day 'Phase 1', which the board approved, will focus on financial feasibility. "That's going to be the real conversation, that are we going to really be able to do the deal or not?" Bayad told commissioners, noting his department would analyze the city's financial documents and the overall value of the utility. This initial phase is estimated to cost around $50,000. If the county decides to proceed after the initial study, the process would move into subsequent phases: - Phase 2: Legal outreach and valuation structuring (3-6 months), involving outside legal counsel and formal appraisals. - Phase 3: Detailed engineering, operational, and financial due diligence, including a deep dive into the physical condition of plants and underground infrastructure. - Phase 4: Final negotiations and closing. The entire process, from start to finish, is estimated to take between 12 and 24 months. Commissioners expressed support for continuing the evaluation. "I would be in favor of continuing our due diligence," said Commissioner Joel Flores. The board directed staff to proceed with Phase 1 and return with findings before any further steps are taken.