Should the City issue a storm resilience general obligation bond?

In November, the City of St. Petersburg will ask residents to vote on a general obligation bond of up to $600 million to finance storm resilience improvements to stormwater, wastewater and potable water infrastructure systems. 

City of St. Petersburg public works administrator Claude Tankersley joined St. Pete Catalyst publisher Joe Hamilton Tuesday evening via Zoom for a community conversation on the topic. The event was hosted in partnership with the League of Women Voters of the St. Petersburg Area. 

Tankersley defined resilience first.

“It’s getting ready for the hit,” he explained. “You have to get prepared. It’s staying on your feet while you’re being hit and bouncing back afterwards quickly.” 

This concept ultimately led to the creation of the St. Pete Agile Resilience effort. 

“SPAR is a change in the mindset,” Tankersley said. “Instead of just patching up problems after they happen and fixing yesterday’s infrastructure, SPAR is about getting our stormwater, wastewater and drinking water systems ready for tomorrow’s conditions before the next big storm or flood event happens.”  

He added that projects under the SPAR initiative will lead to fewer sewer backups and spills, more reliable water and drainage services, stronger protection for City facilities and faster recovery times when an issue happens. However, Tankersley emphasized that SPAR does not guarantee a city without risk.

City of St. Petersburg public works administrator Claude Tankersley. Photo: LinkedIn.

“We’re going to take a very disciplined, deliberate effort to reduce those risks that we can reduce before the next storm happens,” Tankersley explained. “These are the pipes, pumps and the systems that most of us frankly never think about until something goes wrong.”

“SPAR doesn’t invent new work,” he added. “What it does is it takes the work we already need to do and then adds resilience to that work while we’re doing it.”

Projects generally focus on flood mitigation, coastal adaptation and sustainable, long-lasting infrastructure. The general obligation bond would help accelerate these efforts. 

Currently, SPAR initiatives are being paid for through resident utility rates. This will not change. About $550 million in projects are planned over the next five years, which will be financed through utility rates. Tankersley said that a general obligation bond would provide additional capital so that priority efforts can be completed faster. 

With the current funding plan, it would take roughly 24 years to complete $2.7 billion in SPAR projects. The general obligation bond would reduce that timeline to approximately 19 years. 

“Faster allows us to get things done using current prices,” he explained. “Unfortunately, construction inflation, in the type of construction that we’re talking about, has even outpaced the consumer price index. Over the last five, six or seven years or so, we’ve seen those construction costs go up by 45 to 50% in just that short period of time.” 

If the City increased utility rates to finance an extra $600 million of SPAR initiatives, a typical customer would pay an additional $486.12 annually. General obligation bond funding would result in roughly .96 mills or $96 per year, per $100,000 of taxable property value. Tankersley and his staff estimate that a general obligation bond would be more cost effective for about 89% of the properties in the city, both homestead and non-homestead. 

For example, 35% of the properties in St. Petersburg have a taxable assessed value of $100,000 or less. Over 50% of properties have a taxable assessed value of $200,000 or less. However, he said that households that have taxable assessed values “much greater than $500,000” would pay more for the general obligation bond in comparison to an increased utility rate fee. 

Tankersley explained that the SPAR program was designed to impact all residents. 

“If you live in a neighborhood that doesn’t flood on a regular basis, this program will still benefit you,” he said. “Sixty percent of the work will go towards making sure that our water and wastewater systems are strong and can continue to provide you service even if you never flood.”

The proposed ballot language is: 

Shall the City finance storm resilience improvements, including but not limited to, floodwater protection, stormwater pump stations, drainage infrastructure, as well as wastewater collection and treatment facilities, drinking water distribution and supply facilities, by issuing general obligation bonds in one or more series, not exceeding $600,000,000, bearing interest not exceeding maximum legal rates, maturing not more than 30 years from each issuance date, pledging the City’s full faith, credit and unlimited ad valorem taxing power?

To learn more about the SPAR initiative and proposed projects, visit this link. 

To watch last night’s conversation, visit this link.