Longboat’s workshop will set the tone for how the island balances its ambitious resiliency goals with fiscal responsibility.
—On Monday, May 18, the Longboat Key Town Commission will convene for its first Special Workshop to discuss the Fiscal Year 2027 (FY27) budget.
—The 10:15 a.m. meeting will provide a critical first look at the town’s financial roadmap, focusing heavily on a massive $166.2 million Five-Year Capital Improvement Plan (CIP) that spans through FY31.
—With the town facing significant cost drivers like post-hurricane beach restoration, aging utility infrastructure, and inflationary pressures on public safety equipment, Monday’s workshop will set the tone for how Longboat Key balances its ambitious resiliency goals with fiscal responsibility.
—The Big Picture: Managing Costs Amid Rising Pressures
—Town Manager Howard Tipton has provided early guidance emphasizing fiscal responsibility, maintaining essential services, and growing the town’s resiliency. However, the budget faces several external pressures and macroeconomic headwinds.
—The town is projecting a modest 4% to 5% increase in property values, reflecting a softening real estate market. While property values are the primary engine for the General Fund, this modest growth is compounded by inflationary cost drivers that are creating financial pressure across all departments. Among the most significant challenges outlined in the agenda packet are:
• Rising insurance premiums, particularly concerning property, flood, and sovereign immunity coverage.
• Escalating costs and extended lead times for public safety vehicles and EMS apparatus.
• Wage and benefit increases, including merit, cost-of-living adjustments (COLA), and collective bargaining agreements.
• Ongoing uncertainty surrounding State of Florida property tax reform, which poses a long-term risk to municipal revenues.
—On a positive note, the town’s FY2025 audit restored reserves to within policy guidelines. While Hurricanes Helene and Milton initially depleted the fund balance by approximately $8 million, favorable audit results and pending Federal Emergency Management Agency (FEMA) reimbursements exceeding $4.5 million are helping to stabilize the town’s financial footing.
—Where the Money is Going: Top Capital Projects
—The proposed five-year CIP totals $166.2 million, with a staggering 72.3% of that funding dedicated to just the top ten major projects. For FY27 specifically, the capital budget sits at $78.1 million, which includes $50.5 million in carryover funds from FY26 and $27.5 million in new spending.
—Utility infrastructure, beach renourishment, and drainage projects completely dominate the five-year outlook.
• Wastewater Collection Subaqueous Force Main: This massive project accounts for nearly 26% of the entire five-year plan, coming in at $42 million.
• High Erosion Area Sand Placement: Budgeted at $32.9 million over the five-year window, the bulk of this ($32 million) is slated for FY28 to address severe sand loss.
• Village Phases 3 and 4: Design and construction for these infrastructure updates will cost an estimated $7.3 million.
• Gulfside Structural Stabilization: Budgeted at $7.2 million for FY27 to address chronic erosional hotspots.
• Canal Dredging Program: Set to cost roughly $7 million, construction on this highly anticipated project is slated to begin in FY28.
—Financial Stresses & “Stressed Funds”
—While the town has mapped out an ambitious capital plan, staff is candid that capital and infrastructure needs currently exceed the size of potential funding sources. During Monday’s workshop, the Commission will need to pay special attention to two critically “stressed” accounts: the Sarasota County Infrastructure Surtax (IST) Phase IV fund and the Streets Capital Fund.
—The Sarasota IST Phase IV—a 15-year spending plan approved by voters in 2022—is currently facing a $3.7 million shortfall over its lifespan. Unprecedented inflationary pricing in the public safety sector is largely to blame. To compensate and ensure the town can afford essential fire trucks and ambulances, the Town Manager is proposing the removal of canal dredging and recreation center improvements from this specific funding source.
—Similarly, the Streets Capital Fund, which is responsible for critical flood mitigation and resiliency projects, is facing an estimated $1.8 million funding deficit through FY31. The town is aggressively pursuing Hazard Mitigation Grant Program (HMGP) funds to close this gap.
—Utility and Storm Resilience: The Cost of Hardening Longboat
—Utility infrastructure remains the largest single category in the FY27 capital budget, accounting for $52.1 million (66.7%) of the planned spend. Beyond the $42 million subaqueous wastewater line, the town plans to spend $3.8 million on the next phase of asbestos cement pipe replacement and $4.2 million on water main evaluation and replacement. These utility projects will be heavily supported by a mix of grants and State Revolving Fund (SRF) loans.
—Storm resiliency also represents a significant slice of the pie. The FY27 budget allocates $7.9 million toward storm resiliency projects. Engineering designs and construction for low-lying, flood-prone areas like the Village, Buttonwood, and Sleepy Lagoon remain top priorities for the Commission over the next several years.
—Beach Management: Managing the Sand Loss
—Following the devastation of Hurricanes Helene and Milton, Longboat Key is staring down the need for a massive beach renourishment project. The storms resulted in a measured sand loss of 407,300 cubic yards.
—To restore the shoreline, the town is planning an 800,000-cubic-yard sand placement project targeted for Fall 2027 or 2028, carrying an estimated price tag of $32 million. While the town has applied for FEMA Category G assistance and state grants to cover the bulk of the costs, local taxpayers will still be responsible for an estimated $5.1 million (16.1%) to $12.7 million (39.9%) depending on the final breakdown of state and federal aid.
—To finance this and future beach preservation efforts, the town relies on its Beach Funding Model. The proposed FY27 budget features a strategy to implement a $3.5 million ad valorem tax levy during non-debt years to build a sinking fund, which saves on interest expenses and ensures more manageable debt service payments when the town eventually bonds for major projects.
—Taxpayer Impacts: What to Expect
—Residents will undoubtedly feel the financial pressure of these massive capital upgrades over the coming years. Among the key impacts highlighted for the community:
• Even if the millage rate stays the same, modest increases in property values will result in higher tax payments for residents in FY27.
• Assessments for the highly anticipated Canal Dredging Program will appear on November 2026 tax bills.
• Previously approved multi-year utility rate increases will continue to factor into residents’ monthly bills.
• The Beach Program debt requires ongoing, dedicated millage support.
—Next Steps for the Commission
—Monday’s workshop is just the beginning of a long summer of financial planning. Following this initial overview, the town will receive preliminary property values from Manatee and Sarasota counties on June 1, 2026. A second budget workshop is scheduled for June 22 to delve deeper into the General Fund, followed by a special meeting on June 29 to set the maximum millage rate. Final public hearings and the official adoption of the FY27 budget will take place in September.
