Utility Rates FAQ

Water Rate Changes FAQ

Why is the city increasing its water, wastewater and reclaimed water rates?

The short answer is that the city is using over one million dollars a year of its discretionary sales surtax revenues to subsidize the operation of its water systems. That means that while the water rates have not gone up, every citizen is paying more for their water than what is shown on their water bills. However, they are doing so by paying those additional water fees through their discretionary sales surtaxes. Discretionary Sales Surtaxes are available for the City to spend for purchase of various different capital needs. This can include improvement to public facilities (streets, parks, public buildings), public safety vehicles and equipment and others. The discretionary sales surtax funds not spent on the utility would be able to be directed to these other uses.

Additionally, the city has debt outstanding with respect to its Utility Systems, and a requirement of that debt is that the city keeps its rates up to date to meet certain financial tests. It is thus important that the city keep its rates updated to meet those tests. Furthermore, if and when in the future the city needs to issue additional debt to fund system improvements, bondholders will look at the city's historical performance with respect to rate increases. Lack of performance on the part of council to adjust rates adequately could have adverse financial consequences, such as higher interest rates on additional debt.

Why has the city had to subsidize its enterprise water fund? 

The city last increased its potable water rate in 2002, it increased its wastewater/sewer rates in 2009, and it decreased the reclaimed water rate 2016. Since these last changes, costs have continued to rise. In fact, if one were to simply look at the time since the last change in the potable water rate they would find a rise in the consumer price index has risen approximately 25% since 2002.

How did you determine the amount of the increase?

In 2017, the city contracted Public Resources Management Group (PRMG) for a study of its water rates. At that time, PRMG recommended rate adjustments for water, wastewater and reclaimed water rates. In addition to the study, the city recently had an audit done by the Florida Governmental Utility Authority (FGUA). From their assessment, FGUA found the city rates were approximately 35% below the area average and required a rate increase of at about 28% to eliminate the operating subsidy from the general fund.

The council has considered all of the above information regarding rates and has determined that they will adopt the rates recommended by the 2017 PMWG rate study, adjusted for inflation since the issuance of that study. This has resulted in a recommend rate increase of approximately 9.8%. While this rate will not fully close the operating deficit, it will provide a start to that effort while the city continues to seek efficiencies in its operation and maintenance of the water system.

How come our new rates are different that other cities?

It is very hard to compare water rates between cities, as there are many factors that can affect rates. The Raftelis 2018 Florida Water and Wastewater Rate Survey identified a number of these factors, including, (1) source of supply and water quality, (2) connection density, (3) infrastructure replacement, (4) efficiencies, (5) water restrictions. Additionally, when examining residential rates, a factor that impacts those rates is the percentage of water being used by commercial entities versus residential. Generally, a higher commercial usage rate can serve to decrease the residential rates. Lastly, as was observe in the Raftelis (2018, page 3) report ". . . there is often very strong resistance to rate increases until utility assets begin failing, or regulatory mandates dictate the implementation of costly upgrades.

Why do I have to pay a base rate if I did not use any water or use less than is included in the base rate?

Of total utility system operating expenses, fixed costs typically comprise 80% of the total with variable costs (power, chemicals and solids management) comprising the balance. When debt service (the "mortgage payment" on the utility system) and renewal and replacement costs are considered, fixed costs can comprise well over 90% of total annual expenditures required to be paid from rates.

  • Most utility systems employ a combination of fixed monthly charges and volume charges to recover costs. Fixed charges recover a large proportion of the fixed system costs, and reflect the "readiness-to-serve" of the utility system: the system needs to be ready to provide service as soon as the customer turns on the water tap or flushes the toilet.
  • "Readiness-to-serve" is the reason customers must pay their fixed monthly charges even if they do not use a single drop of water during a given month. This requirement is analogous to continuing to pay the monthly mortgage payment on a home even though the owner is away on vacation for one or more months.

How will the city manage the water system in the future to achieve greater efficiencies and minimize future rate increases?

The city has been doing assessments of its system throughout this past year. These assessments have identified a number of ways the city can improve the operations of its water system and water department. The city has entered into an agreement with a company that specializes in water plant operations and maintenance. The addition of this operating company is expected to bring many benefits and efficiencies to the city's water and wastewater operations. Additionally, the city will be creating a master plan for the utility system that will allow it to better identify future needs and further efficiencies. Through these partnerships the city has already identified a number of areas that can be changed to help increase plant capacity, thereby postponing the need for some major capital projects to the future, which will allow the city to develop the reserves to address those capital needs and divert some current funds to systems that can improve efficiencies.

Why are the city's reclaimed water rates so high?

There are a number of factors that impact the reclaimed water rate. First is the need to create and maintain the infrastructure for the creation, storage and distribution of reclaimed water. On the whole, the infrastructure costs for reclaimed water closely mirror those of potable water. In the past, there was an effort to basically discharge the effluent wastewater back into the environment. This led to cities basically subsidizing the cost of reclaimed water to encourage its use. Today cities seek to take their wastewater and further treat it so that it can be used for a variety of purposes, whether by industry or for irrigation. By using reclaimed water, cities can reduce the demand for raw water from the aquifers or other sources. Presently, the city of Groveland produces about 6,000 gallons of reclaimed water for each residence that has a reclaimed water system. The potable water the city generates supplements all water beyond that amount within the reclaimed and irrigation systems.

So what does this all mean to me? 

There are two main impacts for the citizens of the city. The first is that they are going to get a more efficient water system in the city that will be able to provide for its projected growth and for that growth to pay for itself.

The second is that the businesses and residents of the city will see an increase in their water bills. For a household using 4,000 gallons of potable water a month and 16,000 gallons of reclaimed water per month, and estimate of their monthly charges would be:


Current ChargesNew Charges
Potable Water Base Rate (First 4,000 Gallons)$10.50$11.68
Sewer (First 4,000 Gallons)$27.13$29.63
Total Water and Sewer$37.63$29.63
Reclaimed Water (Base Charge)$0.00$2.75
Reclaim First 6,000 Gallons$16.50$16.20
Reclaimed Water (10,000)$27.50$30.60
Total Reclaimed Water$43.00$49.55


The average cost for 4,000 gallons of water and sewer provided by Lake County cities is $51.26, with the highest being Umatilla at $62.48 and the lowest Clermont at $33.86. At the revised rate Groveland would be the third from the lowest rate, with six cities charging more.

Existing & Proposed Water Rates

Draft Table 1

City of Groveland, Florida

Customer ClassExisting RateProposed Rate
Residential Rates - Inside City:*

Base rate including first 4,000 gallons$ 10.50$ 11.68
Volume rate per 1,000 gallons over the first 4,000 gallons$ 2.75$ 3.06



Residential Rates - Outside City:*

Base rate including first 4,000 gallons$ 13.13$ 14.60
Volume rate per 1,000 gallons over the first 4,000 gallons$ 3.44$ 3.83
*Residential meter service is based on a 3/4-inch meter. If the City determines that a larger meter is necessary to maintain an equivalent 3/4-inch meter service level, then the residence would maintain the residential rate structure. If the residence desires a larger meter, the pricing is based on the commercial rate structure.



Residential Rates - Inside City - 2 Homes on 1 Meter:

Base rate including first 8,000 gallons$ 21.00$ 23.36
Volume rate per 1,000 gallons over the first 8,000 gallons$ 2.75$ 3.06






Commercial Rates - Inside City Water:

3/4-inch Meter:

Base$ 10.50$ 11.68
Volume per 1,000 gallons$ 3.67$ 4.08
1-inch Meter:

Base$ 26.25$ 29.20
Volume per 1,000 gallons$ 3.67$ 4.08
1-1/2-inch Meter:

Base$ 52.50$ 58.40
Volume per 1,000 gallons$ 3.67$ 4.08
2-inch Meter:

Base$ 84.00$ 93.44
Volume per 1,000 gallons$ 3.67$ 4.08
3-inch Meter:

Base$ 157.50$ 186.88
Volume per 1,000 gallons$ 3.67$ 4.08
4" Meter:

Base$ 262.50$ 292.01
Volume per 1,000 gallons$ 3.67$ 4.08
6-inch Meter:

Base$ 525.00$ 584.01
Volume per 1,000 gallons$ 3.67$ 4.08



Commercial Rates - Outside City Water:

3/4-inch Meter:

Base$ 13.13$ 14.60
Volume per 1,000 gallons$ 4.59$ 5.10
1-inch Meter:

Base$ 32.81$ 36.50
Volume per 1,000 gallons$ 4.59$ 5.10
1-1/2-inch Meter:

Base$ 65.63$ 73.00
Volume per 1,000 gallons$ 4.59$ 5.10
2-inch Meter:

Base$ 105.00$ 116.80
Volume per 1,000 gallons$ 4.59$ 5.10
3-inch Meter:

Base$ 196.88$ 233.60
Volume per 1,000 gallons$ 4.59$ 5.10
4-inch Meter:

Base$ 328.13$ 365.01
Volume per 1,000 gallons$ 4.59$ 5.10
6-inch Meter:

Base$ 626.25$ 730.01
Volume per 1,000 gallons$ 4.59$ 5.10


Existing & Proposed Sewer Rates

City of Groveland, Florida

Draft Table 2

Customer ClassExisting RateProposed Rate
Residential Rates - Inside City:*

Base rate including first 4,000 gallons$ 27.13$ 29.63
Volume rate per 1,000 gallons over the first 4,000 gallons$ 2.10$ 2.29



Residential Rates - Outside City:*

Base rate including first 4,000 gallons$ 33.90$ 37.04
Volume rate per 1,000 gallons over the first 4,000 gallons$ 2.63$ 2.86
*Residential meter service is based on a 3/4-inch meter. If the City determines that a larger meter is necessary to maintain an equivalent 3/4-inch meter service level, then the residence would maintain the residential rate structure. If the residence desires a larger meter, the pricing is based on the commercial rate structure.



Residential Rates - Inside City - 2 Homes on 1 Meter:

Base rate including first 8,000 gallons$ 52.18$ 59.26
Volume rate per 1,000 gallons over the first 8,000 gallons$ 2.02$ 2.29



Commercial Rates - Inside City Sewer:

3/4-Inch Meter:

Base$ 27.13$ 29.63
Volume per 1,000 gallons$ 2.10$ 2.29
1-Inch Meter:

Base$ 67.86$ 74.11
Volume per 1,000 gallons$ 2.10$ 2.29
1-1/2-inch Meter:

Base$ 135.71$ 148.21
Volume per 1,000 gallons$ 2.10$ 2.29
2-Inch Meter:

Base$ 217.15$ 237.15
Volume per 1,000 gallons$ 2.10$ 2.29
3-Inch Meter:

Base$ 407.18$ 474.08
Volume per 1,000 gallons$ 2.10$ 2.29
4-Inch Meter:

Base$ 678.62$ 741.12
Volume per 1,000 gallons$ 2.10$ 2.29
6-Inch Meter:

Base$ 1,357.26$ 1,482.26
Volume per 1,000 gallons$ 2.10$ 2.29



Commercial Rates - Outside City Sewer:

3/4-Inch Meter:

Base$ 33.90$ 37.04
Volume per 1,000 gallons$ 2.63$ 2.86
1-Inch Meter:

Base$ 84.82$ 92.64
Volume per 1,000 gallons$ 2.63$ 2.86
1-1/2-Inch Meter:

Base$ 169.62$ 185.26
Volume per 1,000 gallons$ 2.63$ 2.86
2-Inch Meter:

Base$ 271.43$ 296.44
Volume per 1,000 gallons$ 2.63$ 2.86
3-Inch Meter:

Base$ 508.97$ 592.60
Volume per 1,000 gallons$ 2.63$ 2.86
4-Inch Meter:

Base$ 848.26$ 926.40
Volume per 1,000 gallons$ 2.63$ 2.86
6-Inch Meter:

Base$ 1,696.57$ 1,852.83
Volume per 1,000 gallons$ 2.63$ 2.86


Existing and Proposed Irrigation & Reclaimed Rates

City of Groveland, Florida

Draft Table 3

Customer ClassExisting RateProposed Rate
3/4-Inch Irrigation/Reclaimed Meter:

Inside City:

Base Charge$ -$ 2.75
Volume rate per 1,000 Gallons up to the first 6,000 gallons$ 2.75$ 2.70
Volume rate per 1,000 gallons over the first 6,000 gallons to 16,000 gallons$ 2.75$ 3.06
Volume rate per 1,000 gallons over the first 16,000 gallons to 30,000 gallons$ 2.75$ 3.36
Volume rate per 1,000 gallons over the first 30,000 gallons to 50,000 gallons$ 2.75$ 4.01
Volume rate per 1,000 Gallons over 50,000 gallons$ 3.67$ 4.87



Outside City:

Base Charge$ -$ 3.44
Volume rate per 1,000 Gallons up to the first 6,000 gallons$ 3.44$ 3.38
Volume rate per 1,000 gallons over the first 6,000 gallons to 16,000 gallons$ 3.44$ 3.83
Volume rate per 1,000 gallons over the first 16,000 gallons to 30,000 gallons$ 3.44$ 4.20
Volume rate per 1,000 gallons over the first 30,000 gallons to 50,000 gallons$ 3.44$ 5.01
Volume rate per 1,000 Gallons over 50,000 gallons$ 4.58$ 6.09



1-Inch Irrigation/Reclaimed Meter:

Inside City:

Base Charge$ -$ 6.88
Volume rate per 1,000 Gallons up to the first 6,000 gallons$ 2.75$ 2.70
Volume rate per 1,000 gallons over the first 6,000 gallons to 16,000 gallons$ 2.75$ 3.06
Volume rate per 1,000 gallons over the first 16,000 gallons to 30,000 gallons$ 2.75$ 3.36
Volume rate per 1,000 gallons over the first 30,000 gallons to 50,000 gallons$ 2.75$ 4.01
Volume rate per 1,000 Gallons over 50,000 gallons$ 3.67$ 4.87



Outside City:

Base Charge$ -$ 8.60
Volume rate per 1,000 Gallons up to the first 6,000 gallons$ 3.44$ 3.38
Volume rate per 1,000 gallons over the first 6,000 gallons to 16,000 gallons$ 3.44$ 3.83
Volume rate per 1,000 gallons over the first 16,000 gallons to 30,000 gallons$ 3.44$ 4.20
Volume rate per 1,000 gallons over the first 30,000 gallons to 50,000 gallons$ 3.44$ 5.01
Volume rate per 1,000 Gallons over 50,000 gallons$ 4.58$ 6.09



1.5-Inch Irrigation/Reclaimed Meter:

Inside City:

Base Charge$ -$ 13.75
Volume rate per 1,000 Gallons up to the first 15,000 gallons$ 2.75$ 2.70
Volume rate per 1,000 gallons over the first 15,000 gallons to 40,000 gallons$ 2.75$ 3.06
Volume rate per 1,000 gallons over the first 40,000 gallons to 75,000 gallons$ 3.67$ 3.36
Volume rate per 1,000 gallons over the first 75,000 gallons to 125,000 gallons$ 3.67$ 4.01
Volume rate per 1,000 Gallons over 125,000 gallons$ 3.67$ 4.87



Outside City:

Base Charge$ -$ 17.19
Volume rate per 1,000 Gallons up to the first 15,000 gallons$ 3.44$ 3.38
Volume rate per 1,000 gallons over the first 15,000 gallons to 40,000 gallons$ 3.44$ 3.83
Volume rate per 1,000 gallons over the first 40,000 gallons to 75,000 gallons$ 4.58$ 4.20
Volume rate per 1,000 gallons over the first 75,000 gallons to 125,000 gallons$ 4.58$ 5.01
Volume rate per 1,000 Gallons over 125,000 gallons$ 4.58$ 6.09



2-Inch Irrigation/Reclaimed Meter:

Inside City:

Base Charge$ -$ 22.00
Volume rate per 1,000 Gallons up to the first 15,000 gallons$ 2.75$ 2.70
Volume rate per 1,000 gallons over the first 15,000 gallons to 40,000 gallons$ 2.75$ 3.06
Volume rate per 1,000 gallons over the first 40,000 gallons to 75,000 gallons$ 3.67$ 3.36
Volume rate per 1,000 gallons over the first 75,000 gallons to 125,000 gallons$ 3.67$ 4.01
Volume rate per 1,000 Gallons over 125,000 gallons$ 3.67$ 4.87



Outside City:

Base Charge$ -$ 27.50
Volume rate per 1,000 Gallons up to the first 15,000 gallons$ 3.44$ 3.38
Volume rate per 1,000 gallons over the first 15,000 gallons to 40,000 gallons$ 3.44$ 3.83
Volume rate per 1,000 gallons over the first 40,000 gallons to 75,000 gallons$ 4.58$ 4.20
Volume rate per 1,000 gallons over the first 75,000 gallons to 125,000 gallons$ 4.58$ 5.01
Volume rate per 1,000 Gallons over 125,000 gallons$ 4.58$ 6.09



3-Inch Irrigation/Reclaimed Meter:

Inside City:

Base Charge$ -$ 44.00
Volume rate per 1,000 Gallons up to the first 30,000 gallons$ 2.75$ 2.70
Volume rate per 1,000 gallons over the first 30,000 gallons to 80,000 gallons$ 3.67$ 3.06
Volume rate per 1,000 gallons over the first 80,000 gallons to 150,000 gallons$ 3.67$ 3.36
Volume rate per 1,000 gallons over the first 150,000 gallons to 250,000 gallons$ 3.67$ 4.01
Volume rate per 1,000 Gallons over 250,000 gallons$ 3.67$ 4.87



Outside City:

Base Charge$ -$ 55.00
Volume rate per 1,000 Gallons up to the first 30,000 gallons$ 3.44$ 3.38
Volume rate per 1,000 gallons over the first 30,000 gallons to 80,000 gallons$ 4.58$ 3.83
Volume rate per 1,000 gallons over the first 80,000 gallons to 150,000 gallons$ 4.58$ 4.20
Volume rate per 1,000 gallons over the first 150,000 gallons to 250,000 gallons$ 4.58$ 5.01
Volume rate per 1,000 Gallons over 250,000 gallons$ 4.58$ 6.09