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Municipal Utility Extraterritorial Surcharge
On Tuesday, February 17, at 12:00 p.m., CS/CS/SB 1724 (Martin) will be considered by the Senate Rules Committee. FLC opposes the bill.
CS/CS/SB 1724 eliminates extraterritorial surcharges for water and wastewater utilities, effective July 1, 2026. The Florida League of Cities (FLC) is requesting that Sen. Martin 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, 2026, 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.
If you have concerns with how this bill will impact your city, please contact members of the Senate Rules Committee (click here for contact information).
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