City staff recommended and the commission gave consensus direction Sept. 8 to prioritize an application for State Revolving Fund (SRF) assistance in coordination with the West Villages Improvement District, and to use pay-as-you-go funding as a fallback, for the city’s effluent pump station and pipeline project tied to recent regulatory noncompliant discharges.

Interim utilities staff explained the city experienced unusually high inflow and infiltration during a 2024 rain event; treated effluent discharge occurred that was not permitted, and the Florida Department of Environmental Protection (FDEP) is expected to issue a consent order spelling out corrective obligations. Staff said the city’s minimal compliance project scope is roughly $17 million; if financed through an SRF loan at low interest the total financed cost could be $22M–$25M depending on terms. If financed by pay-as-you-go the city has already shifted CIP funds and design is 100% complete.

“State Revolving Fund is a financial assistance program through Florida Department of Environmental Protection,” interim staff said, noting West Villages Improvement District submitted an SRF application and has discussed a joint approach because West Villages’ project and the city’s compliance project could align. Staff recommended the SRF application route as preferred because it spreads cost over time at low interest and may include principal forgiveness; pay-as-you-go would be the next-best option because it avoids interest but requires reallocation of capital funding and rate increases.

A P3 proposal from a private developer (Florida Development Solutions) was discussed earlier; staff recommended discontinuing the P3 conversations for this project because P3 options had higher long-term costs, would likely require land transfer or encumbrance and reduce city control. Commissioners concurred with staff’s ranking and asked staff to continue SRF discussions with West Villages while preparing pay-as-you-go rate options to present at the utility rate workshop. Staff said they had moved CIP funding to allow initial work to proceed and will bring detailed rate impacts during the September rate presentation.

Ending: Commission consensus directs staff to pursue SRF funding with West Villages as primary option, and to use pay-as-you-go financing if SRF funds are not allocable to the project; staff will return with rate and budget detail during the utility rate presentation and will continue executing the compliance work required by DEP.