City of Gulf Breeze to Hold Public Meeting on a Utility Capital Improvement Fee
In accordance with section 180.136, Florida Statutes, the City of Gulf Breeze is providing public notice to all sewer customers that the City Council will be considering the adoption of an resolution for a $17 sewer Capital Improvement Fee. The fee will apply only to sewer customers, currently estimated at approximately 9,900 accounts. It will be a flat fee, independent of consumption, and billed monthly.
The City of Gulf Breeze completed a utility rate study to determine the amount needed for a capital improvement fee for debt service payments and bond coverage requirements. The capital fee will appear as a separate line item on the customer’s bill. On February 18, 2025, the City Council held an advertised public meeting and reviewed the $17 fee. for advertisement..
The public meeting will take place on Monday, April 7, 2025, at 5:30 PM at City Hall Council Chambers, 1070 Shoreline Drive, Gulf Breeze, Florida 32561.
The capital fee will solely fund the rehab and expansion of the city’s Reclamation Facility. The City has undertaken an expansion of its Reclaim Water System which treats wastewater to very high standards and provides the reclaim water to irrigation customers across the Fairpoint Peninsula. The current wastewater and reclamation plant is very old. Its last significant expansion was in 1984. The existing 2 million gallons a day (MGD) facility is being expanded and modernized to a 3.5 MGD modern facility.
The Gulf Breeze Regional Water Board is a citizen advisory board who makes recommendations to the Mayor and Council on the operations and spending of the Gulf Breeze Regional Water System. The city’s Regional Water Board and City Council have held numerous advertised public meetings regarding a proposed capital fee that would be reduced over time as more development occurs and generates additional revenues for cost-sharing.
Most recently, on February 12, and February 20, 2024, respectively, the Gulf Breeze Regional Water Board and City Council conceptually approved a Capital Improvement Fee (CIF) to address the funding gap between the $35.6 million available through low-interest state-revolving loan (SRF) loans, impact fees, cash reserves, and RESTORE Act grant funding, and the $64 million required for the Water Reclamation Facility (WRF).
To support this initiative, on August 19, 2024, the City Council secured and approved a Bond Anticipatory Note from Synovus Bank at 5.01%. This three-year note requires interest-only payments, after which the City will issue a bond to cover project costs, including the $3.7 million balloon payment due in 2026 for the Regions 2016A loan.
Additionally, on November 4, 2024, the City entered into an agreement with First Tryon Advisors to provide financial advisory and management services. Their scope includes developing a comprehensive capital planning model for the Water & Sewer Fund to assist in prioritizing and phasing capital improvement needs associated with the $32 million line of credit.
City staff had previously identified that funding a loan or bond issuance for the deficit would require an increase in revenues, which will be partially accumulated through the implementation of the capital improvement fee.
A focus was applied to the rate study to ensure costs are fairly shouldered by new development. There are capital costs or construction capacity fees, which are typically paid by contractors or developers. These fees are designed to recover the cost of capacity to serve future growth and to minimize the cost burden to existing customers over time. On February 16, 2023, a Sewer Impact Fee Study was completed by Raftelis Consultants in anticipation of cost recovery for the Reclamation Facility Expansion Project. The City Council approved increasing impact fees for sewer over five years from $4,314 to $6,326, ensuring that the cost of growth is shared by those who benefit from expanding infrastructure.
We understand the challenges posed by these necessary adjustments for a Capacity Improvement Fee and the impact they may have on our customers. However, it is essential to highlight that operating reserves are insufficient for funding this expansion project and will be exhausted by 2027 if no action is taken. The City of Gulf Breeze is dedicated to responsible and proactive planning to safeguard the city’s infrastructure, financial stability, and long-term growth.
