1. News

St. Petersburg's ballooning sewage debt could threaten credit rating (but there's a Hail Mary plan to avoid that)

In September 2016, signs at St. Petersburg’s North Shore Park warned people to stay out of the water due to contamination from sewage released by the city’s overwhelmed sewer system. The City Council on Thursday learned that the very expensive fix for its sewage woes could hamper the city’s credit rating. [LARA CERRI | Times]
Published May 29, 2017

ST. PETERSBURG — The city needs a lot of money — $435 million over the next five years — most of it to fix its leaky sewer pipes and aging sewer plants.

Without that cash, St. Petersburg could face steep fines for violating a soon-to-be-finalized consent order with the state forcing the city to fix its sewage problems.

But the huge price tag comes with financial repercussions: It would effectively double St. Petersburg's overall utility debt, threatening the city's utility bond rating — which is used as a measure of a municipality's credit-worthiness.

That revelation appeared to surprise the St. Petersburg City Council on Thursday.

Then the council learned of a Hail Mary plan to try to raise the funds without endangering the city's credit: An obscure state law passed in 2016 allows cities and counties to band together to form an independent bonding authority that would issue a "utility cost containment bond."

Those bonds wouldn't be paid back by the city, but by residents directly to the bonding authority from a charge levied to consumers' monthly bill.

Finance director Anne Fritz and a consultant laid out the plan, which she said has been done in California but has never been implemented in Florida. Such a solution would preserve the city's utility bond rating — currently a respectable Aa2 — and prevent higher interest rates, which would otherwise be passed along to residents.

"We want to do anything we can to protect our ratepayers," Fritz said after the meeting, where the council discussed the budget of the beleaguered Water Resources Department, which is at the heart of St. Petersburg's 2-year, 200-million gallon sewage crisis.

Protecting the city's bond rating will save taxpayers some money on lower interest rates, council member Karl Nurse said, but it also functions to keep it off the city's books, giving the appearance of a healthier financial bottom line for the city.

"I'm not instinctively in favor of something so complicated that is essentially a maneuver to avoid having the $400 million that we will owe showing up on our debt load," Nurse said.

Nurse compared it to private sector companies that lease equipment as a way to disguise the capital costs of purchasing it: "It's really an effort to hide that debt."

Fritz said the city hasn't talked with any other cities or counties yet to see if there is any interest in joining forces with St. Petersburg to form this bonding authority.

"It's very, very preliminary," she said.

But plenty of Florida utilities should be interested, she said.

"Believe me, we are not unique," Fritz said of the city's ballooning debt burden.

The bonding authority would likely get a AAA bond rating because of it structure, she said, which would save taxpayer money through reduced interest rates.

One possible path to salvation? The Penny for Pinellas.

If voters approve the next decade of the county's 1-cent sales tax in November, the city would have a big chunk of that debt reduced thanks to revenues generated by the city's share.

"Part of what makes this obviously complicated is a $90 million question mark with the Penny," Nurse said.

That's why the city won't approach bonding agencies this year. There's too much uncertainty surrounding such a large bonding request, the pending state consent order to worry about and the Penny vote. That makes taking out a $120 million bank loan the preferable option for the upcoming fiscal year, said City Administrator Gary Cornwell, which starts Oct. 1.

"It's essentially a bridge loan," Cornwell said.

The hope is that the bank loan will give the city a year to set up the bonding authority, which has to be approved by the City Council and the decisionmakers for whichever other municipalities join in — assuming any do so.

Fritz said it's uncharted territory: "Nobody has done it yet."

Contact Charlie Frago at or (727) 893-8459. Follow@CharlieFrago.


  1. Representatives from the Pasco County school district and the United School Employees of Pasco discuss salary and benefits during negotiations on Sept. 18, 2019. JEFFREY SOLOCHEK  |  Times Staff Writer
    The proposal is short on details, with officials saying they want to work through specifics during negotiations.
  2. A still image from a 2014 video of Granville Ritchie's interrogation with Temple Terrace detectives the day after 9-year-old Felecia Williams vanished. He is now on trial for her murder. JAMAL THALJI  |  [Photo courtesy of WTVT-Ch. 13]
    Jurors watched his interrogation the day after Felecia Williams was last seen in 2014. “This situation is very complicated for me,” he told police.
  3. Tampa investor and owner of the Tampa Bay Lightning Jeff Vinik, right, speaks about his investments in the video game industry at the eSports Summit Wednesday in Tampa as Matt Samost, Vice President of New Ventures for Tampa Bay Sports and Entertainment looks on. LUIS SANTANA   |   TIMES  |  Tampa Bay Times
    A summit at USF brought together major players and explored the possibility of an esports arena.
  4. Lynn Cristina is a Wesley Chapel momma with two girls and works full time as a marketing manager. Courtesy of Lynn Cristina
    My husband and I usually divide and conquer on the parenting front — and I was a man down.
  5. Falo Kane, 32, of Clearwater, now faces four counts of sexual battery of a physically helpless person and a violation of probation charge, according to police. [CLEARWATER POLICE DEPARTMENT]  |  Clearwater Police Department
    Falo Kane now faces a total of seven counts of sexual battery of a physically helpless person.
  6. Female driver texting on mobile phone while driving. STAR TRIBUNE  |  baona/Star Tribune/TNS
    Police are choosing to issue warnings instead of tickets — so far.
  7. 7-Eleven Inc. is opening its first location in a Brandon mall. Pictured is a location in Port Richey in 2018. | [Times (2018) TYLISA JOHNSON | TIMES  |  TyLisa Johnson | Times
    It is the first of eight mall locations opening this year.
  8. Pedro Davila, 27, was arrested in Pasco County three weeks after he robbed a New York City jewelry store, authorities said. Pinellas County Sheriff's Office
    Pedro Davila was taken into custody on a rural stretch of roadway, three weeks after he and two others held up a store, authorities said.
  9. The State Attorney's Office in Jacksonville announced Wednesday that Donald Hugh Davidson Jr. had waived his right to a jury trial after pleading guilty. Photo from video/News4JAX
    Prosecutors said Davidson entered Roseann Welsh’s Middleburg home and strangled and stabbed her.
  10. Hurricane Dorian evacuees wait for family and friends to arrive after evacuating on the Grand Celebration cruise ship from Freeport, a city in the Grand Bahamas on Wednesday, Sept. 18, 2019 in Riviera Beach. The cruise ship transported hundreds of evacuees seeking passage from Freeport after the damaged caused by Hurricane Dorian. BRYNN ANDERSON  |  AP
    The Bahamians who arrived Wednesday from Freeport say they will temporarily stay with relatives or friends before traveling back.