City of Palm Coast Announces Utility Infrastructure Investment Plan

The City of Palm Coast is moving forward with a strategic plan to revitalize and expand its utility infrastructure, ensuring safe, reliable water and wastewater services for residents. The City Council and staff have worked diligently to develop a funding approach that prioritizes essential infrastructure improvements while maximizing the use of impact fees and non-rate revenues.

At the March 11 Workshop, City Council requested modifications to the 5-Year Capital Improvement Plan (CIP) to eliminate a second bond. The revised borrowing amounts are approximately $283.4 million and $171.8 million for project costs, with additional closing costs to be determined upon finalizing the bond. These costs will be incorporated into the total project funding.

To fund these critical infrastructure improvements, the City will phase in a water and sewer rate increase in five increments through October 2028. This increase will support essential upgrades, including addressing overcapacity issues in aging systems, expanding wellfields, and upgrading Wastewater Treatment Plant 1. The plant’s planned expansion from 6.83 million gallons per day to 10.83 million gallons per day is one of the most urgent projects, with an estimated cost of $169 million.

The adopted plan focuses on critical investments in Palm Coast’s utility system, ensuring continued compliance with regulatory requirements and preparing for future growth. The plan includes a single bond issuance of approximately $292 million, significantly reducing the financial burden compared to the original proposal. The funding breakdown includes approximately 57% from bonds, 23% from developers’ impact fees, 15% from residents’ utility bills, and 5% from grants and other loans. (Note: Percentages do not include closing costs, which will be finalized later and incorporated into project costs.)

In addition to the Wastewater Treatment Plant #1 expansion, another major project is the Water Treatment Plant #3 expansion, which includes additional wells needed to provide the water source for the expansion. The estimated total cost of this project is $57 million, with approximately $31.4 million funded by bonds.

Additional investments include wellfield and well expansions to strengthen the city’s water supply infrastructure, upgrades to wastewater facilities to prevent overflows and comply with environmental regulations, and improvements to the water distribution and sewer collection systems to enhance service reliability and resilience. The plan also includes infrastructure extensions to support industrial and commercial development, increasing economic vitality.

To fund these critical projects, the City will implement gradual water and sewer rate adjustments. An 8% increase will take effect on April 1, 2025, followed by another 8% increase on October 1, 2025. From October 1, 2026, through October 1, 2028, three annual Consumer Price Index (CPI) adjustments, estimated at 4% per year, will be implemented. These adjustments will sustain essential infrastructure investments while keeping rates as stable as possible for residents.

City leaders remain committed to responsible fiscal planning. The city raised impact fees to the maximum allowed by law in 2024[CC1] , ensuring that new development contributes its fair share to infrastructure expansion. Impact fees, which can only be used for new infrastructure expansion, are contributing over $116 million toward the necessary projects. Additional revenue from updated utility miscellaneous fees will bring in approximately $2.8 million[CC2]  annually from developers to offset costs.

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