Staff is pleased to present the proposed Fiscal Year (FY) 2026-2027 Seacoast Utility Authority (the Authority) Operating and Capital Budget (Budget). The summary below outlines the annual budget process and the baseline assumptions upon which revenue and expense projections are formulated. The proposed FY 2026-2027 Budget reflects a combination of both historical and “zero-based” budgeting techniques. In general, historical figures are used where a line item comprises small and dissimilar components, too numerous to analyze effectively individually, or where there is no way to predict expenses accurately. Recurring operating expense items, capital expenditures, and most revenue figures are zero-based.

Authority Ordinance 2-2021 authorizes an adjustment to all Authority water, sewer, and reclaimed water rates effective each October 1:

"By an amount not to exceed the percentage increase or decrease in the Consumer Price Index (measured May to May), all Urban Consumers, Water, and Sewerage Maintenance, published by the U.S. Department of Labor, Bureau of Labor Statistics (“Water and Sewer CPI”) over the prior year’s Water and Sewer CPI".

The May 2026 Water and Sewer CPI is 5.1%. After estimating the Authority’s operation, maintenance, and capital needs for FY 2026-2027 and beyond, staff proposes the full 5.1% indexed rate increase on the board approved October 1, 2025 rates for the coming fiscal year. This would provide approximately $4 million of additional revenue to offset sharply rising costs and support the proposed FY2026-2027 $58 million capital improvement program. 

operating budget

Under the Authority’s “cost of service” rate system, most revenue is derived from the fixed monthly base facility charges. This dampens the monthly revenue peaks and valleys associated with weather variations that affect water consumption.

Below are assumptions used to project the FY 2026-2027 Revenue.

• Rates are based upon the Authority's October 1, 2025, rates with an indexed increase of 5.1%.
• 225 new meters are estimated for our Western service area, which is served by interconnection with Palm Beach County Water Utilities (Bulk Water/Sewer).
• Water consumption from May 1, 2025, to April 30, 2026, was used to estimate the proposed sold gallons.
• Capacity reserved by future customers is expected to remain the same as FY 2025-2026.
• Reclaimed Water usage and contracts are expected to remain the same as FY 2025-2026.
• Private System Maintenance Fees include privately owned and specialized water and sewer services for HOA's and businesses.
• Land Development/Administrative Fees are expected to approximate FY 2025-2026.
• Miscellaneous charges for late fees, shut-off notices, billable repairs, etc., are expected to remain at FY 2025-2026 levels.

• Non-Operating Revenue:
  • Together with the current capital outlay commitments, the proposed FY 2026-2027 Capital Improvement Program will further reduce cash reserves by $19.3 million and thus reduce year-over-year interest income. 
  • Miscellaneous lease payments are by the terms of the two cellular phone providers' lease agreements.

• Other Sources of Revenue:
  • Connection charges are based upon future projects expected to occur in FY 2026-2027.

• Electricity – based upon historical operating data, considering increases for usage and an expected rate increase from Florida Power & Light; estimated total of 6%.  
• Treatment Chemicals – based upon estimated treatment demands while applying existing and expected increases due to historical inflation and supply disturbances. Chemical costs continue to rise.
• Bulk Water Purchase – increase anticipated as the Authority expects to add 225 new western service area residential customers and more non-residential development. These new customers receive water and sewer service via the Authority’s bulk water and sewer purchase from Palm Beach County.
• General Inflation – A general inflation rate of 5% has been applied where cost increases are unknown. 
• Personal Services Budget – The following is a description of certain Authority compensation adjustment programs:
  • Merit Adjustment/Proposed Merit Increases - Each Authority employee is evaluated annually on the employee’s employment anniversary date. Some employees are at the top of their paygrade and will receive their merit increase via a lump sum. Proposed Merit raises are unchanged from FY 2025-2026 and are as follows: 0% - Satisfactory, 2% - Above Satisfactory, 3% - Excellent.
  • Longevity Pay – provides employees a lump sum payment of 0.1% of base pay for each continuous year of employment.
  • Cost of Living Adjustment (COLA) – 3% is budgeted for all employees, effective October 1, 2026. 
  • Paid Time Off (PTO)  Leave Conversion-to-Pay Program – Depending on specific criteria, the Authority requires employees to convert accrued PTO leave to pay each year. 
  • Pension and 457 Deferred Compensation Pension Plans – will continue to be contributed at 8.0% of each eligible employee’s wages to the Money Purchase Pension (MPP, defined contribution) and matching of up to 2% (into the MPP) based upon the employee’s contribution made into the 457 Deferred Compensation Plan.
  • Health & Dental Insurance – is based on existing programs with an expected 15% employer increase.
  • Disaster/Benefit Pay Contingency – will continue to be budgeted to administer costs related to hurricane pay, emergency closures and other unknown costs.

  • Staffing – The Authority's Maintenance/Construction team will be reorganized into a new department to provide better in-house support of maintenance and construction activities.  One new fulltime equivalent (FTE ) to this newly formed department, plus one FTE to cover the Engineering's Department increasing inspection load, have been incorporated into the FY 2026-2027 Operating Budget.   

     

EXPENSE COMPARISON SUMMARY

SUMMARY OF MAJOR PROJECTS

The proposed Capital Budget allocates approximately $58 million for FY 2026-2027 capital projects and purchases. The Authority's Engineering Department has developed a 5-year, $292 million capital improvement program that prioritizes infrastructure replacement in areas served by aging, fragile, or obsolete materials. The proposed FY 2026-2027 Capital Budget includes several component projects funded by a combination of current revenues and reserves. The following narrative highlights the major capital budget components, and the tables that follow provide additional departmental detail.

ENGINEERING

Military Trail/PGA Boulevard Water Main

This $1.75 million project replaces approximately 950 linear feet (“LF”) of 12-inch cast iron water main that crosses the intersection of PGA Boulevard and Military Trail and continues east of Military Trail within the SUA easement. The segment crossing PGA Boulevard failed in 2006, and the segment crossing Military Trail failed in 1992, so both have been prioritized for replacement to avoid future failures at this critical intersection.

Central Boulevard 24-inch Force Main Addition

This $6.5 million project adds a 24-inch sanitary sewage force main northward from PGA Boulevard along Central Boulevard to provide an alternate pipeline route to the primary 30-inch transmission force main carrying flow to the PGA WWTP.

Lake Park Neighborhood Improvements – 8E

This $3.5 million project replaces approximately 16,480 LF of 60-70 year old 4-inch, 6-inch, and 8-inch cement composite water main and provides sanitary sewer cleanouts for properties where none exist. Area 8E lies south of Northlake Boulevard, from Jasmine Drive and Flagler Boulevard east to Crescent Drive and Palmetto Road.

North Palm Beach Neighborhood Improvements – 2D/2E

The NPB 2D-2E neighborhoods are bounded by Lighthouse Drive to the north, Prosperity Farms Road to the west, the Earman River to the south, and Anchorage Drive to the east. This $3.5 million project replaces approximately 8,100 LF of cement composite water main and 1,300 LF of 8-inch vitrified clay gravity sewer installed in the late 1950s.

Lift Station 36 Force Main Replacement

The eastern portion of the SUA service area on the barrier island is served by a 16-inch ductile iron pipe (“DIP”) sanitary sewer force main installed in the late 1970s that crosses the Intracoastal Waterway and extends west to the PGA WWTP. Complementing two earlier projects designed to prepare for redevelopment, this $2.5 million project replaces the existing 16-inch force main segment west from the Prosperity Farms Road area to connect to the recently installed pipeline at RCA Boulevard.

WATER TREATMENT

Well BR-22 Improvements

Well BR-22 is located along the west side of the C-17 Canal near Costco. Its production has declined, and this $1.4 million project replaces the existing surficial aquifer well along with its submersible pump, riser pipe, wellhead, valving, appurtenances, and electrical work.

Nanofiltration Membrane Replacement

Placed in service in May 2014, the existing nanofiltration membranes, which treat less brackish, surficial aquifer water, are original to the plant. While the staff has meticulously cleaned and maintained them, thus extending their productivity well past their projected 10-year life, their performance has begun to deteriorate. The estimated and budgeted replacement cost is $3.3 million.

WATER DISTRIBUTION

Old Marsh Valve Replacements

Attributable to their age, composition, location, and dramatic water quality changes experienced when Seacoast converted to membrane treatment many years ago. A number of valves and fire hydrants within Old Marsh do not properly seat (close).  This $1.25 million replacement project will allow operations staff to service the Old Marsh water system with minimal disruption to those customers.

WASTEWATER TREATMENT

Anoxic Basin Improvements

When operating properly and efficiently, the Authority’s Wastewater Treatment Plant (PGA WWTP) anoxic basin reduces both the demand for applied power and the concentration of nitrogen, a potentially regulated effluent nutrient.  Over time, grit and debris accumulate in this basin, reducing the tank's critical volume and fouling the mixing equipment.  The proposed $3.5 million project improves access for cleaning and replaces failing mixers.

Sludge Recycle Pump Station Replacement

This project replaces the existing Sludge Recycle Pump Station, which has reached the end of its useful life. The station recirculates aerobically digested sludge among the five existing aerobic digesters at the PGA WWTP, thereby supporting an older sludge age that improves dewaterability. The estimated construction cost is $1.5 million.

WASTEWATER COLLECTION

Lift Station 2 Structural and Standby Power Improvements

This project covers several improvements at Lift Station 2, located near PGA Boulevard and Interstate 95. The work includes replacing the aging standby generator, adding a manual transfer switch to allow use of a portable generator if the standby generator has operational issues, rehabilitating the wetwell, and replacing the discharge piping, including the piping within the wetwell. The estimated construction cost is $1.75 million.

Lift Station 54 Force Main Replacement, Phase 2 – Prosperity to Alternate A1A

Located in Anchorage Park, Lift Station 54 is a master station that collects and pumps sewage from Lake Park and North Palm Beach to the PGA WWTP. On two recent occasions, the force main into which the station discharges has failed, resulting in public inconvenience, environmental issues, and regulatory action.   The proposed Capital Budget allocates $1 million for project design to replace the existing force main from Prosperity Farms Road, along the Earman River, to Alternate A1A.  Full construction is expected to be completed in fiscal FY2027-2028.

Gravity Sewer Lining Program

Since its inception, the Authority has funded extensive in situ rehabilitation of gravity sewer pipelines. This work installs a resin liner in the existing pipe to seal leaks, provide a consistently smooth flow surface, and restore the pipe's structural integrity. The proposed budget allocates $900,000 for gravity sewer lining, $420,000 for cleanout installation, and $350,000 for sewer lateral lining.