Going up? Longboat Key proposes rate increases to fund utility projects

The Longboat Key Town Commission is set to decide between two proposed increases for water and sewage rates to help fund critical projects during the next decade.

The town has identified about $42.8 million in critical capital needs through fiscal year 2030.

“The town hasn’t increased its rates for over 10 years, even beyond that, even though we’ve had ongoing cost increases for materials and salaries and insurance and all those things, so we’ve been careful about increasing our rate revenue on our side of the bill,” Town Manager Tom Harmer said. “We have some big projects coming up that are necessary.”

Commissioners are expected to decide between two options:

• Option one would expand the monthly residential sewer billing cap from 7,000 gallons to 10,000 gallons, spreading most of the increase to high-volume users.
• Option two would provide across-the-board adjustments on all user rates

Option one puts more of the financial burden on anyone using 10,000 or more gallons of water per month. Town documents show about 67% of the single-family homes in Longboat Key have 7,000 gallons a month or less.

“The typical customer, according to our rate consultant, is 5,000 gallons [per month],” Harmer said.

During the May 18 budget workshop meeting, each of the seven commissioners indicated they preferred option one.

Town commissioners are set to discuss the rate plan again before the fiscal year 2022 budget goes into effect on Oct. 1.

For the projects it envisions, the town has assumed financing of $27.1 million or 63% with the remainder funded through cash reserves and user rate revenue collections. Plus, the town says if it doesn’t address its utility needs, they will become more expensive to fund in the future and it runs the risk of future fines and infrastructure failures. Also, inflation in operating and construction could add to costs.

“Costs are going up,” Harmer said. “We all have to be careful about that, and we’ve tried to minimize the rate increases, but put a program in place to allow us to do these really important infrastructure things that we need to do.”

Harmer also mentioned how the town’s rates are lower compared to the nearby areas, including the cities of Gulfport, North Port, Palmetto, Pinellas Park, Sanibel, Sarasota, St. Pete Beach, Treasure Island and Venice. Bradenton and Manatee County rates are lower. 

“Our rates have been historically low,” Harmer said. “Part of that is we are a wholesale customer of Manatee [County], and their rates are low.”

There is an estimated increase for the redundant pipeline project, which had an initial projection of $16 million - $18 million.

“So the $16 million - $18 million has been a number we’ve been using for a construction budget,” Public Works Director Isaac Brownman said. “There’s an additional $1.4 million to accomplish the full final design. The effort we’re going through right now is just the permit to get a preliminary design and get to permit from the agencies.”

Brownman said the remaining funding is a contingency for the possibility of land acquisition and potential lawyer fees. Earlier this month, the Town Commission agreed to hire Tampa law firm of Gaylord, Merlin, Ludovici & Diaz as the town considers projects that could involve right-of-way acquisitions firm of Gaylord, Merlin, Ludovici & Diaz as the town considers projects that could involve right-of-way acquisitions.

“These are still planning numbers,” Harmer said of the proposed budget for the redundant pipeline project. “We don’t have any hard numbers yet.

“We don’t have a design. We haven’t bid anything, so as you think about doing something in 2024 or 2025, we don’t know what the cost will be, so I think the staff is trying to be safe in these estimates.”

Longboat Key could need different types of access for its sewage as the town continues to deal with the fallout from the June 2020 sewage break. It resulted in millions of gallons spilling from an underground pipeline.