VERO BEACH — Water and sewer customers are being asked to dig deeper into their pockets as Vero Beach moves forward with a wastewater treatment facility now estimated at roughly $164 million.

At the same time, millions of dollars collected from utility customers are being transferred or charged back to help support Vero Beach government operations.

And some of those customers don’t even live in the city.

The combination is raising an increasingly uncomfortable question:

How much should Vero Beach be allowed to “skim” from its utility system while simultaneously telling customers it needs substantially more money to pay for a rapidly escalating wastewater project?

The word “skimming” has already generated controversy. The transfers themselves are not inherently illegal, and the city openly budgets for them. But legality doesn’t answer the bigger question of whether the practice is fair to ratepayers — particularly those outside the city limits who have no vote for the elected officials making these decisions.

From Roughly $60 Million to $164 Million

Perhaps the most eye-opening part of the story is how dramatically the estimated cost of Vero Beach’s new wastewater facility has changed.

City records show that in May 2021, Water and Sewer Director Rob Bolton told the city’s Utilities Commission that approximately $60 million had been budgeted for the project during the preceding two years.

By October 2022, City Manager Monte Falls was publicly describing the new wastewater treatment plant as an approximately $80 million project.

Today?

Approximately $164 million.

That’s more than double the $80 million figure discussed just four years ago.

The escalating price tag caught the attention of local resident Taylor Anderson, who commented on a Vero News Facebook post:

“Skimming? Why don’t we talk about the new facility at almost double the price now? How do you go from a projected 81 million to over 150 million and nobody cares? And we all know that bonding is involved and here we are. Does anyone really understand what the interest is on that kind of money?”

Anderson’s $81 million figure differs slightly from the approximately $80 million figure IRC Media located in city records, but the larger point behind his question is supported by the city’s own documents: the estimated cost has increased dramatically.

Why Did the Price Explode?

There are legitimate explanations for at least part of the increase.

The city has cited sharply higher construction and operating costs, including labor, electricity, chemicals and other expenses. The project itself has also evolved and includes a modern 5-million-gallon-per-day facility designed to meet advanced wastewater-treatment standards and replace the aging lagoon-side plant.

One particularly striking example came from Bolton, who told the Utilities Commission that chlorine costing approximately $550 per one-ton cylinder following COVID had subsequently increased to approximately $2,200.

The city’s capital planning documents also show the scope is substantial. The 2024 capital plan listed more than $144 million for construction of the Water Reclamation Facility alone, with other engineering and infrastructure expenses associated with the broader project.

The city has also secured tens of millions of dollars in grant funding, reducing the amount that ultimately must be borne through utility revenues.

But grants don’t eliminate the financing problem.

$125 Million in Planned Borrowing

The city’s current financial projections contemplate approximately $125 million in debt issuance associated with its major utility improvements.

That’s another number worth remembering.

$125 million.

City records indicate that the earlier financial plan contemplated approximately $80 million in borrowing. The latest projections call for approximately $125 million.

Vero Beach has already arranged a $55 million Bond Anticipation Note to provide interim construction financing before longer-term bonds are expected to be issued.

And those bonds will eventually have to be repaid — with interest.

The final long-term bonds have not yet been priced, meaning nobody can responsibly state exactly how much interest ratepayers will ultimately pay over the life of that debt.

What we do know is where the money to service that debt ultimately comes from:

Utility revenue.

In other words, the customers.

And Rates Are Going Up

Vero Beach customers have already endured substantial utility rate increases associated with the new facility and other utility expenses.

Now they’re facing more.

Current projections could push the typical combined residential water and sewer bill from roughly $83 per month to approximately $122 by 2030 — an increase approaching 47 percent.

But while customers are being told more revenue is necessary to operate the utility and pay for the new facility, not every dollar collected stays within the utility.

Some of it goes to City Hall.

The “Skim”

Vero Beach operates its water and sewer system as an enterprise fund.

The city currently transfers a percentage of utility revenues into its General Fund. The current formula is 6 percent.

That money can then help support general city operations.

Based on approximately $27.2 million budgeted in water and sewer service charges for FY 2025-26, that 6-percent mechanism represents roughly $1.6 million.

But that’s not necessarily the entire amount flowing from the utility toward general government.

The city also assesses the utility an administrative chargeback for government services provided to the enterprise.

Indian River Shores Vice Mayor Bob Auwaerter recently estimated that when the direct transfer and administrative charges are considered together, approximately $3.4 million annually is being pulled from the water and sewer utility for Vero Beach’s General Fund and general-government operations.

IRC Media has independently confirmed that both types of charges have historically existed, though we have not yet independently verified Auwaerter’s exact current administrative-chargeback figure in a city budget line item.

That’s an important distinction.

But even the undisputed direct transfer raises a fundamental question:

If Vero Beach needs dramatically higher rates to finance its utility infrastructure, should millions of dollars simultaneously be leaving the utility to support other government operations?

Paying Vero Beach Without Getting a Vote

Then there’s another complication.

A substantial portion of Vero Beach’s water and sewer customers don’t actually live in Vero Beach.

Approximately 40 percent of utility revenues have been attributed to customers outside city limits, including residents of Indian River Shores and portions of the unincorporated barrier island.

Those customers pay Vero Beach for water and sewer service.

Their utility payments contribute to the revenue from which transfers and administrative charges are made.

But they cannot vote for Vero Beach City Council.

That has led critics to describe the arrangement as a form of “taxation without representation.”

If the roughly 40-percent outside-city revenue share were applied proportionately to approximately $3.4 million in combined transfers and administrative charges, outside-city customers could effectively account for approximately $1.3 million to $1.4 million annually.

That figure is an estimate rather than an audited allocation, but it illustrates why residents outside Vero Beach are paying close attention.

Could the “Skim” Get Bigger?

Here’s where this becomes even more significant.

Mayor John Cotugno has discussed increasing the percentage transferred from the utility beyond the current 6 percent — potentially to 8 percent or even higher.

During recent discussions, Bolton recommended excluding revenues collected specifically for debt service from the transfer calculation.

His reasoning was straightforward: customers shouldn’t effectively pay an additional General Fund percentage on money being collected simply to repay borrowed money.

But ultimately, City Council controls the transfer.

So while Vero Beach customers face a project whose estimated price has climbed to approximately $164 million, approximately $125 million in planned borrowing and potentially substantial additional rate increases, city leaders are simultaneously discussing whether even more utility revenue should flow into the General Fund.

That’s the part taxpayers and ratepayers should be watching.

Legal Doesn’t Necessarily Mean Fair

Defenders of the city have correctly pointed out that enterprise-fund transfers aren’t automatically illegal or unusual.

One commenter on the Vero News Facebook discussion argued that the practice is legal and common among municipalities with enterprise funds.

That’s an important point.

IRC Media has found no evidence that Vero Beach’s General Fund transfer itself is illegal.

But that’s also not the only question.

Government can do something legally while taxpayers still have every right to question whether it’s financially responsible or fair.

When a project once discussed at approximately $60 million and later $80 million reaches approximately $164 million, the public deserves an explanation.

When planned borrowing increases from approximately $80 million to $125 million, the public deserves to understand the debt.

When customers are facing potentially 47-percent higher bills, they deserve to know where their money goes.

And when millions of dollars collected through an essential public utility are simultaneously helping support general city operations, ratepayers have every right to ask whether City Hall should be taking that money at all — much less discussing taking more.

The next major opportunity for those customers to ask those questions comes soon.

Vero Beach has scheduled a public hearing on proposed water, wastewater, irrigation and reuse rate adjustments for August 25, 2026, at 9:30 a.m.

For residents staring at higher bills and a $164 million price tag, that might be a meeting worth attending.

IRC Media will continue reviewing the project’s financing, utility transfers and the ultimate cost to Vero Beach water and sewer customers.

IRC Media uses aggregated public data and verified sources; articles are reviewed by the editorial team to the best of our ability.