St. Pete sewer capacity fees to soar amid growth

St. Petersburg developers will likely see their sewer capacity fees soar by 52.38% in the upcoming fiscal year as the city continues experiencing exponential growth.

Administrators have also proposed a 25% stormwater rate hike due to increasing environmental vulnerabilities. However, most municipal utility customers will only see a slight increase in their total bill.

Public works director Claude Tankersley provided the city council with an update on rate restructuring plans Aug. 1. He noted that developers must pay the sewer capacity (water closet) fee when adding new users to the system, and the costs have remained unchanged for “many years.”

“We’ve been subsidizing development for a long time through utility rates because we were not adequately capturing the cost of upgrading the capacity of our sewer system,” said Councilmember Richie Floyd. “We’re going to catch up very quickly now and make sure people are paying their fair share.”

The city previously charged $350 for each new restroom connected to the sewer system. According to data from 2022, the cost is roughly $1,000.

Officials previously thought state legislation capped annual increases at 12.5%. However, Tankersley credited the city’s legal team for discovering they could rapidly raise those rates.

The fee jumps to $600 in FY 2025, which begins in October. It will increase another $200 in FY 2026 and reach $1,000 per restroom the following year.

“Since we used 2022 data to calculate the sewer capacity fee, we propose to recalculate the fee again in 2026 to make sure we continue to stay current moving forward,” Tankersley added. “This will help some of the pressure on utility rates to cover utility costs.”

Councilmember Ed Montanari questioned the potential impact on affordable and workforce housing developments. Tankersley said the city provides waivers for projects dedicated to low-income residents.

Councilmember Lisset Hanewicz said she also frequently hears concerns from constituents regarding who is ultimately footing the infrastructure bill for new developments. “This is going to help with that,” she said. “I didn’t want to be redundant, but thank you so much for all the work.”

Hurricane Debby brushed the area and caused flooding in the city’s Shore Acres neighborhood three days after the utility rate discussion. Photo: Facebook.

Stormwater Rates

Municipal utility customers will likely see their stormwater rates increase by 25%. Thursday’s discussion came just three days before the city began feeling Hurricane Debby’s effects.

A related master plan includes roughly $1 billion in recommended projects through 2050. Tankersley noted that the mayoral administration and city council have accelerated work on some capital improvements due to a changing climate.

“As we are all very aware, the past 12 months have seen a significant increase in weather-related and sea level rise flooding events that put pressure on the stormwater utility,” he explained. “These accelerated projects and operational costs have put upward pressure on our stormwater utility revenues.”

The city’s number of stormwater cleaning crews has tripled from two to six. Tankersley said related operational costs have increased by $1 million to $2 million. He has also requested $25 million for capital improvements in FY 2025, $8 million more than the current budget allocation.

Despite the change, low-usage – less than 2,000 gallons monthly – water customers should only see their monthly bill increase by $2. Those residents would pay an additional $4 without the rate restructuring.

The 12% of customers with reclaimed water will pay 13% more, or about $4.43, with low usage. Tankersley said those prices have remained flat for three years.

However, annual costs have soared by $250,000. The city now faces a $400,000 budget deficit for reclaimed water services, and Tankersley said the additional revenue would fill that gap.

Wastewater and sanitation rates will increase by 6.42% and 5.75%, respectively. However, potable water service will decrease by 9.83% for low-usage customers. “Typical” residents who use up to 3,500 gallons of water monthly will see a 2.92% decline.

A graphic showing the new tiered rate structure system. Screengrab.

High usage – over 5,000 gallons monthly – customers will see a more significant overall increase than their counterparts. Those bills will jump by $21 to $29 on average.

Tankersley noted that 83% of residents fell into the low-usage category due to the archaic system and conservation efforts. That will drop to 59% under the new billing structure, the city’s first update in over 20 years. He said that would further incentivize water management efforts, and council members agreed.

“The retail rate structure changes are going to lessen the impact of utility fees on the overwhelming majority of residents in our city,” Floyd said. “I couldn’t be happier that the (rate) study came out the way it did, and showed we could make our bills make more sense, first off, and make them more equitable …”

The city council will conduct a Sept. 5 public hearing on the proposed rates before voting. If approved, the changes would take effect Oct. 1.