The Gulfport City Council met on July 1, 2025, for a lengthy session covering utility rate projections, senior center fundraising updates, a problematic building department evaluation process, and the proposed FY 2025-2026 budget. Key themes included recovery from recent hurricanes, infrastructure investments, and operational improvements.
Good evening. Am I on now? Oh, good. Okay. So welcome to the July first Gulport City Council meeting. Um as I always say, hold on, it's going to be a long one. If you happen to have your phone with you and it's turned on, please make sure you turn it off. If you feel the need to have a side conversation during the meeting, no problem, just walk outside, please. Franklin Roosevelt. Council Member Jackson here. Council Member Early. City Attorney Salzman. City Manager O'Reilly. All right. So tonight we're going to start off our meeting with two presentations. Our first presentation will be by Mr. Andrew Burnham from Stantech, and he will be talking to us about the utility rate sufficiency study. Thank you, Mayor, members of Council. Members of council, Andy Burnham with Stantec. I have a fairly brief presentation. I know you have a full agenda and lots to get through, so I'll be happy to keep it at a high level, but dive into as much detail as appropriate as you have questions and discussion warrants. So just wanted to start with a little bit of background information and kind of a rates refresher, if you will. So I've had the opportunity to assist the city with looking at the water, sewer, and stormwater rates for a few years now. And some of the recent history on rates, I think is relevant. So in 2023, we had an intentional review of the rate structure in Gulfport and looked at an opportunity to maybe address paying for what you use and modifying the structure to remove a minimum allowance from the fixed charge that had an impact to lower volume users of reducing their bill by not charging for usage that they weren't necessarily using each month. And so there was no not necessarily a rate increase at time, but actually a slight reduction in rates for low volume users through that rate structure initiative. But then also, as part of that, we were looking at multi-year financial planning and trying to make sure that the rates themselves generated enough revenue to cover your operating expenses, your capital needs, and one of your biggest expenses, the wholesale service for water treatment, as well as wastewater treatment and disposal from the city of St. Petersburg that we incur. And so we developed really a multi-year rate plan that had 8% increases in it for fiscal years 24 and 25, and a $1 increase on the monthly stormwater fee. But part of the practice within the community has been to really look at this annually, just to make sure that things are tracking as projected. Assumptions have to be made about anticipated volumes that we'll be sending to St. Pete or receiving for water service, and escalation factors for costs, such as capital improvements and operating costs. So just good financial practices to really look at this annually, develop plans, try to adhere to those plans, use them to inform your budgets, but obviously make course corrections if you need to to the extent that circumstances occur differently. But having a multi-year rate plan does provide that benefit of stability, certainty, and only having to have these conversations when necessary if things are going according to plan. And so this year's conversation is really oriented about that next three-year plan. We did the rate structure adjustments in 23, two adjustments to rates in 24 and 25 that I mentioned. Now we're trying to look at what is the future hold today, understanding current cost dynamics in terms of wholesale rate increases from St. Pete, our capital needs and funding sources for those needs, and just maintaining adequate reserve policies to mitigate our against any future risks or unforeseen circumstances. All trying to provide the highest level of service possible to businesses and residents within the community, but at the lowest possible cost, and trying to avoid rate spikes and trying to do prudent planning and having modest adjustments where possible so that we can again avoid unwanted increases to customers that are beyond what they can plan for or accommodate. So through this process, each year what we've done is we utilize a financial model, a computer model, or financial analysis and management system, and we kind of calibrate each year what we thought we would see, which is the green bars in the last plans in this chart to what we're seeing today in the blue bars. And it helps us understand some changes in circumstances and dynamics. But what we've seen actually since 2023 has been a fairly stable forecast. The level of revenues and expenses that we need has really been about the same. We're doing a good job forecasting as best we can St. Pete expenses and anticipated rate increases. Our capital needs have been pretty well defined. We're fortunate that this year we have the EPA Region 4 community grant to factor in to cover part of our priority two and priority three sewer system repairs, which has allowed us to avoid some additional borrowing, which is helping us a little bit on our reserves. But one of the fundamental components or requirements of rates is that they generate sufficient revenues to cover our expenses. So I always tend to look at that revenue versus expense chart and that black line, that cash coming in, it really has to equal that cash going out for those expenses because this is an enterprise system. And so if we have those expenditures for operations and capital and debt repayment requirements, the revenues of the system have to be sufficient to pay that on an annual basis.