Property tax increase could fund St. Pete stormwater upgrades

St. Petersburg’s mayoral administration accelerated $614 million in stormwater improvement projects in the aftermath of a devastating hurricane season without a clear plan to pay for the projects.

Utility revenues only cover typical operations, and many residents already struggle to afford recent rate hikes. Some officials believe a new property tax could help solve a complex conundrum.

Voters, through a referendum in 2026, would ultimately decide whether the administration issues general obligation bonds to fund St. Pete Agile Resiliency (SPAR) initiatives. Multiple city council members advocated for the voted debt, which would spread the cost across all property owners rather than just residents, at a committee meeting Thursday.

“The rate increases by themselves, without this program, are starting to become unsustainable,” said Councilmember Mike Harting. “The idea of using no debt and just raising the rates and getting to a 75% increase in a year is – I don’t think they would burn me in effigy, they would just burn me. And I wouldn’t disagree with them.”

St. Petersburg utility bills will increase by an average of roughly 9% in fiscal year 2026, which begins Oct. 1. However, the administration recommends a 17.5% hike on stormwater rates.

Some officials prefer the established 50-50 model, equally funding SPAR through debt financing and utility fees. Stormwater rates would soar by 75% in 2027 before a modest 7.5% increase in 2028.

SPAR, an aspirational initiative to rapidly address evolving climate threats, is just one piece of the city’s environmental resiliency puzzle. The Stormwater Master Plan calls for $1 billion in projects over the next 20 years.

Councilmember Brandi Gabbard frequently refers to SPAR presentations as an “unfunded list.” She noted that, contrary to what many voters will believe, 30 years of increased property taxes will not cover a bill that will inevitably surpass $1 billion before the debt issuance sunsets.

“I don’t want this to be some panacea – that this is going to fix everything,” Gabbard added. “It isn’t going to.”

She suggested issuing a limited amount of debt now, without a voter referendum, to finance the total cost of select stormwater projects. Stakeholders could wait until November just for the proposition to fail and send the city back to the drawing board.

If the referendum passes, the city would not see any bond revenue until the spring of 2027, at the earliest. “Well, for me, that’s not good enough,” Gabbard said.

City Administrator Rob Gerdes said officials would use the impending rate increases to fund some SPAR projects, including an AquaFence flood prevention barrier around a downtown sewage lift station. The city anticipates spending roughly $10 million on SPAR “pre-planning work” in 2026.

“We think it’s productive to let property owners have a vote on what they want to do,” Gerdes said. “If the referendum failed, I think that would send a message that they want to stay the course with the current CIP (capital improvement projects) program that we have.”

Local governments issue general obligation (GO) bonds to finance large capital improvement projects. The city would essentially use its property tax revenue as collateral for the amount borrowed.

St. Petersburg last issued GO bonds in 1980 to acquire and renovate the Coliseum. Andy Burnham, a consultant with Stantec, said the funding mechanism offers the “lowest cost of capital of any type of debt you can issue.”

While Council Chair Copley Gerdes is reluctant to forgo the 50-50 funding model the city recently achieved, he is “certainly open to the conversation” of financing more of SPAR’s cost “if it’s short-term.” He also reiterated that he is “very hesitant.”

Gerdes said the bond issuance would provide flexibility. Administrators could use less than the voter-approved monetary limit, which would decrease the tax rate, if they received grants or other funding sources.

Conversely, Harting noted that rate increases “never go away.” Gerdes also said the GO bonds would “spread the burden out to not just the resident, but to the owner of the property.”

Assistant City Administrator explained that while 58% of St. Petersburg’s 107,988 properties are homesteaded residences, non-homesteaded properties – commercial and multi-family buildings – account for 60% of the $33.8 billion taxable value.

Council members will continue discussing potential paths to pay for critical stormwater projects in August. Administrators will present a prioritized list of SPAR projects and research state requirements for the bond referendum process.

Councilmember Lisset Hanewicz said residents educated on the matter will, “if it’s important to them,” approve the new tax. “But clarity, I think, is of the utmost importance.”