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City managers tell council $782,118 shortfall remains on $44 million wastewater project
Summary
City staff told the Seminole City Council that a $44 million upgrade to the wastewater treatment plant will leave the city about $782,118 short of covering annual debt and operating costs and presented a menu of options including staff cuts, capital deferrals, a sewer-rate increase and a small sales-tax increase.
Seminole city staff told the City Council on a funding update that the municipal wastewater treatment plant project will require additional local funding beyond previously planned sources.
City Manager Steve Saxon said the project’s construction bids pushed the expected cost far above the original $21 million planning figure, and that the city now estimates a $44 million financing need. "We went to the USDA and they agreed to loan the additional dollars and give a $2,000,000 grant," Saxon said. "Taking into account the sales tax and loan, we're short about $782,000, to be exact, dollars 782,118."
The shortfall emerges after the council previously agreed not to extend one half-cent sales tax and after engineers returned construction bids that doubled earlier estimates. Saxon told the council the city received a loan offer from USDA that covered most of the new cost but left the $782,118 annual funding gap for debt service and operations.
Saxon outlined several options to close the gap: reducing staff or operating budgets, deferring capital improvement projects, increasing sewer customer fees (staff estimated roughly $189,000 of revenue for each $5 added to a typical monthly bill), or raising sales tax by an eighth or quarter cent. He presented three example “recipes” combining those moves, noting the council would need to select the mix it prefers before construction is complete.
Council members asked clarifying questions but did not take action at the meeting. Saxon and staff said they will continue pursuing grant opportunities and will bring more detailed budget proposals to the council in the upcoming budget work sessions.
If the council does not adopt new local revenue or spending reductions, staff warned the city will have to identify the money when it finalizes the capital and operating budgets for the year in which the plant opens. Saxon said crews are roughly 40% through construction and that the plant is expected to open in early 2026, meaning the council needs to settle funding decisions in the next budget cycle.
The presentation and supporting slides are posted on the city website for public review; staff asked the public to review the material and told the council the city will return with alternative funding scenarios and more precise cost models during budget deliberations.
