Issue Statement: The City of Oakland Park (COP) purchases water from the City of Fort Lauderdale (CFL) for transmission and distribution to our residents and businesses within the COP Water Service Area (See Map Exhibit A). The current 30 year water agreement is due to expire in October 2024. In 2019, CFL implemented the results of their Water and Wastewater Comprehensive Rate Study. As part of this implementation, CFL began charging a 25% surcharge on water sales to Oakland Park. Although the surcharge is allowable under State law, COP did not agree that the surcharge was allowable under the existing contract between the two cities and objected. As part of efforts to resolve the dispute, a new long-term water agreement was negotiated that addresses the surcharge and other issues.
Recommended Action: It is recommended City Commission adopt a resolution authorizing the proper City officials to enter into a new long-term Agreement for Sale of Potable Water with Fort Lauderdale.
The City of Oakland Park (COP) provides water to approximately two-thirds of its residents and businesses. The remaining third of the City is serviced by Broward County or Fort Lauderdale directly. The attached map shows the three water service providers in COP. Currently and under this new proposed water agreement, COP purchases water from City of Fort Lauderdale (CFL) at large user or Master Meter rates. The water purchased from CFL is then distributed and sold by COP to residents and businesses.
Oakland Park and other bulk customers, such as Wilton Manors, had expressed concerns over CFL's rate structure, long-term infrastructure investment, and regular system maintenance. CFL completed a Water and Wastewater Comprehensive Rate Study (Rate Study) in June 2019 that addressed many of these concerns. COP staff provided comments on rate study draft materials that were provided for review.
Not all recommendations were supported by Oakland Park. The CFL Rate Study recommended and CFL implemented a 25% surcharge to water customers outsides its municipal boundaries citing State Statutes (180.191.(1)(a) and (b). COP staff objected to the surcharge and deducted this amount from payments. The City Managers of CFL and COP agreed to allow the surcharge balances to remain unpaid without penalty until a resolution was reached at which time the new agreement would address the issue.
In late 2021, the cities agreed to hire CSA Group to assist in reaching a resolution. CSA reviewed all materials and submitted a report with recommendations in early 2022, which included a defined surcharge that would be phased in over time, with a maximum rate of 12.5% instead of the maximum 25% allowed for under State law.