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Largo commission approves first reading to seek up to $26 million SRF loan for wastewater non-surface disposal project (6-1)
Summary
The City of Largo approved on first reading a not-to-exceed $26 million loan authorization to fund a wastewater non-surface water effluent disposal project, moving a SRF loan application forward despite a lone dissent over deep injection wells. The item advances to a second reading on Sept. 16.
The City of Largo on Aug. 19 authorized on first reading an ordinance to pursue up to $26 million in State Revolving Fund (SRF) financing for a wastewater treatment plant project designed to eliminate surface-water discharges of treated effluent.
City staff described the ordinance (Ordinance 2025-41) as a not-to-exceed borrowing authorization that would allow the city to submit SRF loan applications and later execute one or more loan agreements. Staff said the city's current capital plan lists the project at about $26.12 million for work budgeted in 2026 but that known contract and service estimates currently total roughly $20.4 million. The Tampa Bay Estuary Program grant is expected to reduce the net by about $500,000, staff said.
“This project is going to help maintain a future permit discharge compliance and then improve the water quality and Tampa Bay,” said a city staff presenter during the discussion.
Staff explained the SRF option offers lower interest than a municipal bond issuance — staff cited an illustrative SRF rate near 2.32 percent versus a 20-year municipal bond rate in the 4.8–5 percent range — and estimated lifecycle interest savings of roughly $5 million even after SRF fees and compliance-service costs. Staff emphasized the ordinance is a ceiling authorization and that any final loan agreement would be brought back for commission approval.
Commissioners pressed staff for details about drilling and disposal elements. Staff and consultants said drilling work includes two deep injection wells and two monitoring wells that were bid as part of the drilling package, with drilling costs roughly $8 million and an estimated nearly $12 million for surface piping at the plant. Staff noted the drilling permit is valid for five years, that drilling mobilization is expected around February, and that the project schedule anticipates about 2.5 years of construction plus one year of operational testing before permit issuance.
Not all commissioners supported the deep-well approach. One commissioner said they could not support deep injection wells and called the requirement an unfunded state mandate; another commissioner raised concerns about sequestering treated water below the aquifer and said the project may be an interim measure until broader regional solutions emerge. City staff responded that the project is intended to meet existing statutory requirements and that alternatives and reuse options remain part of longer-term planning.
The commission voted to approve the ordinance on first reading and to schedule a second reading and public hearing for Sept. 16, 2025; the motion carried 6-1, with one commissioner recorded in opposition.
Next steps: staff will submit the SRF loan application and, if the loan is approved, the commission will consider the final loan agreement by supplemental resolution at a later meeting.
