Municipal Water/Sewer Utility Bills Up Thursday in House Subcommittee

Municipal Utility Extraterritorial Surcharge

On Thursday, February 12, at 9:15 a.m., CS/HB 1451 (Busatta) will be considered by the House Intergovernmental Affairs Subcommittee.

CS/HB 1451 eliminates extraterritorial surcharges for water and wastewater utilities, effective July 1, 2027. The Florida League of Cities (FLC) is requesting that Rep. Busatta extend the effective date of this section of the bill to 2029 for the following reasons:

• Elimination of the surcharge means that utilities will need to establish new rates for extraterritorial customers to ensure the rate covers the additional cost of providing extraterritorial service.
• This will require the utility to: 1) budget for the rate study; 2) procure a firm to conduct a rate study; 3) complete the rate study (typically a 6-9 month process); and 4) hold public hearings in the extraterritorial areas served to allow comment on the new rates (required by the bill).
• It will be nearly impossible to accomplish all of this by the current July 1, 2027, effective date.
• Extending the effective date to 2029 will accommodate the time needed to budget for and conduct the new rate study, allow time for municipalities to renegotiate any interlocal agreements that were predicated on current surcharge amounts, and adjust planned capital projects and other infrastructure improvements to reflect the revenue loss that would have funded them.

Provision of Municipal Utility Service to Property Owners Outside City Limits

HB 1075 (Sirois) will also be heard tomorrow in the Intergovernmental Relations Subcommittee. FLC opposes the bill for the following reasons:

• The bill requires a utility to serve any extraterritorial property or other municipality that is located within one mile of a main line of the utility, only if sufficient capacity exists to provide the service and the property is not within the service territory of another utility.
• It prohibits a utility from conditioning extraterritorial service on annexation of the property.
• The municipality or property owner requesting the service must pay all applicable rates, fees, and charges, and also authorize reasonable impact fees, connection fees, or other infrastructure contributions necessary to provide the service.
• The bill defines “sufficient capacity” too narrowly, requiring only that an engineer determine whether the utility has the capacity to serve without materially impairing service to existing customers.
• The bill would mandate extraterritorial service to any type or size of user: entire subdivisions, industrial users, commercial users, and entirely separate cities.
• The bill invites litigation if the utility finds it doesn’t have capacity based only on engineering standards. The utility would have to pay the attorney fees of anyone challenging the decision if the utility fails to demonstrate a lack of capacity based on “clear and convincing” evidence.  

Please contact members of the Intergovernmental Relations Subcommittee to inform them of your objections to HB 1075 and request that the effective date of CS/HB 1451 be extended to 2029.

Click here for subcommittee contact information.

Click here to watch the committee meeting on the Florida Channel.

Please contact Rebecca O'Hara with any questions.