City of St. Pete Beach Commission Work Session: Utility Rate Studies, Tax Analysis, and Preliminary Budget Discussion - July 14, 2026

The City Commission held a work session on July 14, 2026, beginning at 3:04 PM, to receive presentations on utility revenue sufficiency and rate design, ad valorem tax options, and the preliminary operating budget. Commissioners expressed broad support for right-sizing enterprise funds to eliminate reliance on general fund transfers, while voicing concerns about the impact of proposed commercial wastewater rate increases on small businesses. Direction was given to staff on millage rates and further analysis of commercial rate equity.

Discussion Items

• Reclaimed Water, Stormwater, and Wastewater Utility Revenue Sufficiency Study: Sean Ocasio of Raftelis presented a study covering reclaimed water, stormwater, and wastewater funds. Projections showed that existing rates are insufficient to cover operating costs, debt service, and capital needs. Recommended rate increases included:
  • Reclaimed Water: 50% increase in FY2027, followed by 8% annually through FY2031, raising the base fee from $25 to $51.02 (104% cumulative).
  • Stormwater: 15% increases for FY2027–2029, then 6.5% in FY2030–2031 (nearly 73% cumulative), increasing the annual bill for one ERU from $183.75 to $316.97. The study noted that an additional $133 million in capital projects, if included, would require an 800% rate increase.
  • Wastewater: 16% increases for FY2027–2029, then 5% in FY2030 (nearly 64% cumulative), raising the average monthly bill from $95.34 to $156.24. The study also proposed redesigning commercial rates to address equity: commercial customers currently pay only 77% of the system average cost per thousand gallons, while residential pays 105% and multifamily 138%. The redesign would scale commercial base charges by meter size and bill all flows, phasing in over three years, reducing residential/multifamily increases by 12–26%. Commissioners expressed strong concern about the impact on small businesses, particularly those with the smallest meters (3/4-inch and 1-inch). Commissioner Marriott noted that for a hypothetical 3/4-inch commercial account using 3,000 gallons, the bill would triple; others emphasized preserving the city's independent business character. Commissioner Maldonado proposed a hardship variance, while others suggested a longer phase-in or adjusting the lowest tiers. Staff was directed to provide more data on business types and meter sizes, and to compare proposed rates with neighboring communities (St. Petersburg, Pinellas County, Treasure Island, Madeira Beach).
• Wastewater Connection Fee Study: The recommended connection fee increases from $3,216 to $4,649 per ERU (45% increase), based on existing and planned wastewater infrastructure investment. New connections and redevelopments expanding capacity would pay the fee. Commissioner Causey noted the city's fee is already above the county's and will increase further, questioning economies of scale.
• Ad Valorem Tax Analysis: Finance Director Devin Schmidt presented three millage options: the rolled-back rate (3.075 mills, yielding same revenue as prior year), the current rate (3.0913 mills, generating $80,000 more than rollback), and the two-thirds max rate (3.830 mills, requiring supermajority vote and generating $3.8 million more). The city's current rate ranks 15th of 24 Pinellas municipalities. A November ballot initiative could reduce ad valorem revenue by 7.2% ($1.1 million in FY2028). Most commissioners favored keeping the current rate flat, citing combined impact of utility fee increases. Commissioners Causey, Marriott, Maldonado, and Robinson supported the current rate; Mayor Tate also favored flat, noting the need to avoid overburdening residents and businesses. The finance committee had recommended the two-thirds max rate.
• Preliminary Operating Budget: Staff proposed holding FTE counts flat, with a 3.2% COLA and 3.5% employee insurance increase. Commissioner Causey requested reallocation of funds from the aquatics program (up $200,000) to park restoration projects, which were heavily used by the public. Due to time constraints, detailed discussion was deferred to the next meeting.

Key Outcomes

• Enterprise Fund Rates: Commissioners conceptually supported the proposed rate increases for reclaimed water and stormwater, and directed staff to continue developing the wastewater rate structure with additional analysis on small business impact, neighbor comparisons, and longer phase-in options. No formal vote was taken; staff will bring back refined proposals.
• Millage Rate: The commission reached consensus to adopt the current millage rate of 3.0913 mills for FY2027. Formal adoption will follow the public hearing process.
• Operating Budget: Staff will reassess the resident services budget and bring back options for park restoration funding at the next meeting.
• Connection Fees: The wastewater connection fee increase was presented but not voted on; it will be incorporated into future rate adoption discussions.