• Sewer Capacity Concern: The city’s wastewater system is nearing capacity, particularly at Wastewater Treatment Plant 1 (WWTP1), which serves the majority of the community.
• Current Capacity Limits:
  • WWTP1: Permitted for 6.83 million gallons per day (MGD), with only 300,000 gallons per day of capacity remaining—enough for less than a year of growth.
  • WWTP2 (Peavey Grade off U.S. 1): Currently handles 2 MGD, with an expansion to 4 MGD expected by April 2025. After expansion, 550,000 gallons will be diverted from WWTP1 to WWTP2. 
• Systemwide vs. Localized Issues: While overall capacity seems sufficient, the system isn't fully interconnected, limiting how much flow can be redirected to WWTP2.

• Why Are Current Residents Paying for Future Growth?
  • A large portion of funding is needed to maintain the current water and sewer system, not just expand it.
  • Developers pay impact fees, but the city must build infrastructure in advance—it can’t wait to collect all the money first.
  • New residents eventually pay into the system through utility rates, helping cover long-term costs.
• Growth & COVID’s Impact on Planning:
  • A 2018 rate analysis predicted 3-4% growth, but COVID led to unprecedented population increases and unexpected cost surges (supply chain issues, inflation).
  • The city proposed expansion in 2022, but costs had already risen dramatically.
  • Now, in 2025, those delayed decisions mean infrastructure needs are even more urgent.
• Did the City Undercharge for Growth?
  • Impact fees are limited by state law—they can only be adjusted on a four-year cycle, making it difficult to keep up with rising costs.
  • The City Council raised utility impact fees to the maximum amount allowed in 2024. 
  • State laws favor developers over residents, restricting how much the city can charge for growth-related infrastructure.

• Cost of Delays:
  • Delaying upgrades increased costs by approximately 25% due to inflation and project modifications.
  • Construction costs alone have risen by about 15% over the past few years.
• Aging Infrastructure Needs Upgrades:
  • Wastewater Treatment Plant 1 is over 50 years old and must be modernized to meet current regulatory requirements.
  • Water Treatment Plant 2 needs technology upgrades to improve water quality, odor, and color.
• State Compliance & Urgency:
  • The city is already being fined by the state for wastewater capacity issues.
  • The state has mandated action—delaying is not an option.
  • Without these improvements, Palm Coast risks serious infrastructure failures and additional penalties.
• Funding the Improvements:
  • The city plans to use bonds to cover essential upgrades at Wastewater Treatment Plant 1.
  • Investments in modernizing water treatment facilities will enhance service reliability and quality.

• Rate Increases & Community Needs:
  • Many residents, including retirees and young families, are concerned about rising costs due to inflation.
  • Investing in strong utility infrastructure is essential for attracting economic development and job opportunities for current and future residents.
• City Council’s Tough but Necessary Decisions:
  • The current council inherited past decisions and is making difficult choices to fix aging infrastructure.
  • While no one wants higher rates, delaying improvements would make future costs even higher.

Jan. 27, 2025

The City of Palm Coast hosted a Town Hall meeting on Monday, January 27 from 6-7pm at the Palm Coast Community Center. Acting City Manager Lauren Johnston presented the Utility Strategic Action Plan.

Since last year, the city’s Town Hall series has featured several elected officials and administrators presenting on current topics from infrastructure to public safety. Each Town Hall offers the opportunity for Q&A after the presentation.

On October 15, 2024, City Council approved proceeding with a utility gap analysis to be performed by Raftelis, a rate consultant, to determine the current rate revenue shortfall. This is important because it helps identify and address deficiencies in a utility system's capacity, financial performance, and infrastructure. It provides a clear understanding of current capabilities versus future needs, enabling informed decision making and strategic planning. Key reasons for conducting a utility gap analysis include; Identifying Capital Needs, Ensure Service Reliability, Support economic development, Update fees for services, and Budgeting and Resource Allocations.

This presentation reviews the findings of the GAP analysis and proposed recommendations for utility rate increases and adjustments to utility charges.

March 4, 2025

March 4, 2025

March 18, 2025