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Latest sewage crisis fallout: Higher utility bills in St. Pete

By Charlie Frago
Signs at North Shore Park in St. Petersburg warn people in September 2016 to stay out of the water due to contamination from partially treated sewage during the height of the city's sewage crisis. Now the City Council is considering how much to raise utility rates to pay the $326 million bill to fix St. Petersburg's sewage system. [LARA CERRI | Times]

ST. PETERSBURG — For months, the cost of the city's sewage crisis has been measured in terms of environmental damage, legal ramifications and political repercussions.

Now residents are about to get the bill.

Starting Jan. 1, utility bills could climb between $7.47 and $9.81 a month under the proposed rate hikes unveiled by a City Council committee Thursday.

That's an increase of $89.64 to $117.72 a year for each household, according to the city's calculations, for a typical user of about 4,000 gallons a month.

The proposed hike of about 8 percent is just the start of the discussion, however, and public hearings will be held in the fall. The council also discussed making reclaimed water users pay 100 percent of the cost of that service and implementing tiered stormwater charges to replace the flat rate so affluent homeowners will pay more.

Why the rate hikes? The state made St. Petersburg commit to spending $326 million to fix the sewage system after it released up to 200 million gallons of waste from 2015 ton 2016. Now the city has to find a way to pay for that and other needed maintenance and upgrades.

If county voters don't renew the Penny for Pinellas 1-cent sales tax in November, the bill for city residents will grow even steeper.

And, after months of rumblings that rating agencies aren't happy with the city's growing debt burden to fix the sewers, council members considered reassuring those agencies by paying for more of the fix with cash. And if the Penny doesn't pass, that would require even bigger rate increases than the ones proposed Thursday.

But with a city tired of a sewage crisis that has earned it unwelcome national attention, some council members said the tolerance for utility rate hikes seems higher than usual.

"I have a lot of citizens say to me: 'Just fix it, we'll pay for it,' " City Council member said Jim Kennedy at the Budget, Finance and Taxation committee hearing.

The council gave initial approval to parts of the utility rate plan, but not on the proposed rate increases. Thursday's discussion focused on the broad strokes of policy. The full council is scheduled to hold two meetings on the proposal — in November and December.

But explaining debt service obligations, lower interest rates and why steeper utility bills now will translate into lower bills later is no easy task, said City Council Chairwoman Darden Rice.

"I don't know if I could explain that at a neighborhood barbecue," Rice said.

Council member Karl Nurse thinks residents, especially lower-income residents, will latch onto the idea of making more-affluent residents pay more for reclaimed water and stormwater improvements.

Currently, residents pay a flat rate for stormwater, no matter how big their lot. Nurse wants the city to create a tiered system in which owners of larger lots pay more.

"I think that's immoral, frankly," Nurse said. "We know that's unfair. We're subsidizing high-income households."

He initially wanted his idea to start in January, but agreed with council member Charlie Gerdes that rushing such a complicated change in how the city bills residents and maps residences could cause problems. Instead, council members told the staff to spend the next year drafting a plan that would be tentatively implemented in the fall of 2018.

Council members also considered raising reclaimed water rates even more, so that users pay 100 percent of the cost of the service. Currently, they fork over 58 percent.

The proposed $7.47 monthly rate increase would be for nonreclaimed water users, which is most of the city. The steeper $9.81 rate increase would be for reclaimed water users, about 13 percent of residents. But the council discussed charging those users even more. Those customers tend to be clustered in high-income neighborhoods, Nurse said, so they should pay the total cost of the service. Currently, taxpayers cover the $2.6 million gap.

"Maybe it's time to stop subsidizing the fortunate" said Nurse, who is himself a reclaimed water user.

Rice said residents who use reclaimed water are saving strained potable water for other uses. They're being good environmentalists, she said, and she was concerned that reclaimed water users were being characterized as pampered.

The committee voted to have the staff draft a plan to raise reclaimed rates more than 25 percent a year over three years to fully recover the cost of the service.

Public Works Administrator Claude Tankersley suggested that the council consider putting meters on reclaimed lines. Currently, reclaimed users can use as much as they want at far cheaper rates than residents who use potable water.

"So people pay for only what they use," he said.

Contact Charlie Frago at [email protected] or (727) 893-8459. Follow @CharlieFrago.