St. Petersburg residents could soon pay more for water, wastewater and other city utilities, but the latest rate discussion at City Hall expanded into a larger question over who should pick up the tab for the city’s infrastructure needs.
City Council advanced proposed increases Aug. 13 for water, wastewater, reclaimed water, sanitation and stormwater services. The combined impact could add roughly 7% to an overall utility bill, or an estimated $8 to $10 per month for an average single-family home, and, if it passes, would mark the sixth consecutive year the city hiked the rates.
The proposal returns Aug. 27 for a public hearing and final vote. If approved, the new rates would take effect Oct. 1.
City officials say the increases are needed to replace aging infrastructure, fund planned improvements and avoid the greater expense that comes when equipment fails and requires emergency repairs.
Council member Corey Givens voted against advancing the proposal’s stormwater and sanitation rate increases and wants the city to find more outside funding before returning to ratepayers.
“For one, we need creative solutions from outside funding sources and accommodate increases,” Givens said. “People are already burdened financially, and I don’t think it’s fair for ratepayers to strain their resources.”
Instead of utility rate hikes, Givens proposed leveraging the Tropicana Field (Historic Gas Plant) site to spread infrastructure costs across generations, although how exactly that would shake out is not completely developed.
For Givens to change his vote at the end of the month, he said the proposed increase would need to come down considerably: “No more than 2 to 3% increase,” he said, though, he supports an idea pitched by Vice Chair Richie Floyd, which would spread some of the costs onto developers.
New developments add strain onto the city’s wastewater system, and to offset that strain, developments are charged a “water closet fee,” which applies when new residential units and many new or renovated commercial properties add toilets to the wastewater system. Those dollars are reserved for sewer improvements and expansion rather than going into the city’s general fund.
The city currently charges $1,000 per water closet, but the proposal returning Aug. 27 would increase that cost.
“I think a lot of people in this city want to see us put more burden on development,” Floyd opined.
Givens agreed developers should contribute more, but questioned how far that revenue could go in a city with limited land available for new construction.
“Developers need to pay more and carry their weight,” Givens said. “But St. Pete is landlocked, we can only build so many new units, so I don’t know how much revenue that is going to provide to meet the needs.”
Council member Mike Harting said Floyd’s proposal deserves consideration but added that his “contention is that it still spreads out past developers. Costs will still be pushed onto renters. I struggle with how other residents won’t inevitably pay for this service.”
Water closet fees could provide an immediate means of unburdening households from the rate hikes, but Floyd also pitched a way to mitigate utility costs by reducing the amount of utility revenue is transferred to the general fund every year.
Here’s how it works now: water and wastewater operate as enterprise funds, meaning customers pay rates for the services they use, and that revenue supports the systems’ operations, maintenance and capital needs.
Those funds also make payments into the city’s general fund through Payment in Lieu of Taxes, commonly called PILOT. The payments are intended to function similarly to the property taxes a privately owned utility or business would otherwise pay.
Floyd raised the possibility of reducing those transfers in future budgets, leaving more money collected through utility bills within the utility system itself.
To offset the resulting loss to the general fund, the city could consider keeping its property tax rate, or millage rate, from declining as property values rise. In Floyd’s terms, “we would freeze the millage rate.”
The potential shift matters because the two revenue sources do not necessarily fall on the same people. Utility bills are paid by customers using the system, including renters. Property taxes reach a broader pool of property owners, including investors and others who own property in St. Petersburg but live elsewhere.
That idea is not part of the utility proposal council will consider Aug. 27 and would require a separate discussion during a future budget process.
Floyd, however, told the Catalyst that he thinks freezing millage and reducing utility revenue flowing to the general fund “could make things a little more equitable in St. Pete.”
This article provided in partnership with stpetecatalyst.com.