Largo staff outline FY2026–30 capital plan and propose utility rate increases to meet debt and replacement needs

City of Largo staff presented the proposed FY2026–2030 Capital Improvement Program (CIP) at a May 13 commission work session and recommended increases to stormwater, wastewater and solid-waste rates to meet fund-balance and debt requirements.

The presentation, which included a recap from the Finance Advisory Board and technical details on stormwater priorities, said the board voted 6–0 (one member absent) to recommend adopting the proposed rate increases as necessary to fund projects in the CIP. Bill McIntosh, speaking for the Finance Advisory Board, said the board reviewed alternatives and concluded that postponing or reducing increases would “jeopardize the fund balances” needed to meet future obligations.

Why it matters: City staff told commissioners the utility funds carry regulatory and contractual constraints — including debt-service coverage and minimum cash balances — that could force larger emergency increases later if routine capital and replacement work is deferred. Commissioners pressed staff for options that would reduce the near-term burden on residents while preserving critical preventive work.

Most important details: Staff described the CIP process and a project-evaluation framework that weights flood risk, equity and community impacts. For stormwater, projects were scored using an equity scorecard and flood-risk maps projecting conditions to 2040. Staff reported existing assessments of substantially damaged structures: a contractor has inspected 505 properties for substantial-damage determinations, finding 10 structures currently designated substantially damaged, all located on Crescent Drive and Braeburn Drive.

On fund mechanics, staff explained wastewater fund covenants and coverage needs: the wastewater fund must maintain about 115% of debt-service coverage — roughly $10.1 million after operating costs — and a cash balance equal to 50% of annual debt service (about $4.4 million). For solid waste, staff flagged county tipping fees as an external cost driver; county tipping fees rose from about $37.50 per ton in FY2019 to about $58.21 in the FY2026 proposal.

Proposed FY2026 rate changes shown at the session: a 15% increase for stormwater (about $2.31 per month on the average account), a 5% wastewater increase (about $2.39 per month) and a 10% solid-waste increase (about $2.86 per month). Staff said revenue ordinances would be brought forward for first reading July 15 and second reading Aug. 5, with implementation in October and public notices in July and August.

Discussion and requests from commissioners: Several commissioners said the proposed increases were large relative to household budgets and asked staff for a clearer menu of trade-offs — specifically, which projects could be delayed or removed under a smaller FY2026 increase (for example, a 7.5% stormwater increase) and what the resulting service and risk implications would be. Commissioners also asked staff to present the prior five years of utility rate changes to give residents context for the proposed increases.

Finance Advisory Board recommendation and alternatives: Bill McIntosh reported the board examined a full-rate proposal, a half-rate alternative and a no-increase scenario. The board recommended the full proposal, saying reduced increases would force program cuts (the staff presentation estimated, for example, that a 7.5% stormwater increase would require about $9.4 million in project reductions over FY2026–30, and no stormwater increase would require roughly $17.8 million in reductions over the same period). For wastewater, staff estimated a half-increase would require about $10 million in cuts over five years and no increase would require about $25 million in cuts.

Key budget and capital details mentioned: vehicle replacement cycles for the solid-waste fleet average five to six years; typical vehicle cost cited was roughly $408,000 per unit. Solid-waste vehicle replacement demand peaks in FY2031 as backlog items from earlier replacement cycles (affected by COVID) align. Pinecrest stormwater conservation was singled out as high-impact but high-cost and plotted off the presentation chart because it would skew the visual scale.

Next steps and schedule: Staff will present an adoption resolution for the CIP at the May 20 commission meeting (the CIP must be adopted by June 1). Rate ordinance first readings are scheduled for July 15 and second readings for Aug. 5; if adopted, rate changes would take effect in October. Staff also proposed a rate-study contract in the CIP to refine long-term rate structures for stormwater and wastewater.

Ending: Commissioners directed staff to return with the requested trade-off analyses — prioritization of projects under reduced rate scenarios, projections of prior rate changes and options for different residential/commercial splits — before the May 20 adoption. The Finance Advisory Board’s recommendation, staff’s debt-coverage figures and the scheduled ordinance dates remain central milestones for the final budget and rate decisions.