Upcoming capital projects frame town's first 2026 budget discussion

The town of Longboat Key's commission’s first fiscal year 2026 budget discussion on Monday focused on short- and long-term capital projects. 

Ten projects in the next 5 years account for 65% of the $166.8 million 5-year capital improvement project.

Commissioners heard from town staff how these projects will play out over the next five years. 

The FY26 budget accounts for $81.7 million in capital improvement projects, which come from various funds, such as the utility capital fund, canal fund, undergrounding fund and building fund. 

That’s a slight increase from FY25, when staff budgeted for $76.9 million in capital improvement projects when looking at the 5-year plan. 

The FY26 requests include a carryover of $68.6 million from FY25 and $13.1 million in new spending.

Of the $81.7 million in projects planned in FY26, the largest project is the $31 million subaqueous force main project. Town voters recently approved a referendum that allows the town to pursue up to $33 million through a State Revolving Fund Loan, to cover the remaining cost after applying state appropriations.

Finance Director Sue Smith said the town has about $3.9 million in open purchase orders remaining for the undergrounding project.

"The rest of that will probably revert to a surplus at that point," Smith said. "As we liquidate those POs and we get close to September, I might just go ahead and revert those balances to surplus." 

Of the $166.8 million in capital projects requested over the next five years, about 49% is anticipated in FY26, though there may be carryovers or projects that need to be delayed. 

The town anticipates the largest funding source to be grants, accounting for 22% of the revenue for capital projects from FY26-FY30. 

The second-largest funding source is the SRF Loan, making up 16% of the revenue. Other funding sources include utility user rates, tourist development taxes, bonds and general fund ad valorem tax. 

Looking at the budget overall, staff said revenues are still largely to be determined. 

The town will receive property value estimates on June 1, followed by certified values on July 1. Real estate values are expected to increase 5-7% based on regional trends, according to finance staff.

About $750,000 in additional revenue is also anticipated from the Sarasota County property appraiser because of the St. Regis Longboat Key project, according to Smith and Town Manager Howard Tipton's estimates. 

There are also uncertainties like inflation, federal economic uncertainty and rising insurance rates that Smith and Tipton will need to remain aware of while finalizing the FY26 budget.

The town is also in a precarious position with its reserves after the 2024 hurricane season depleted the town's $3.2 million natural disaster reserve fund. Some good news, Tipton said, is the town received $1.68 million in additional insurance money from storm damage. 

"In order to really get back to where we want to be, we're going to need some help from our insurance companies, as well as from FEMA," Tipton said. 

Further discussion of revenues and operating costs will be at the June 23 workshop, when staff will present the general fund and operating budget recommendations. 

Tipton said departments have five full-time positions for FY26, but he emphasized he has made no decisions about what positions he will recommend.