ST. PETE BEACH -- City commissioners expressed shock when they learned about budgetary shortfalls in the wastewater, reclaimed water and stormwater funds that will force the city to find millions of dollars.
Interim Public Works Director Camden Mills provided the city with a bleak enterprise fund overview that left Mayor Adrian Petrila "livid" that he and the commission were "painted a rosy picture" of city finances by former staff.
He told commissioners the more realistic picture painted by Mills, who has held the position for only five months, and new City Manager Fran Robustelli is "anything but rosy; when we are looking at the next five years it's going to be incredibly difficult. The budgetary deficiencies that we have is somewhere around $4 (million) to $5 million."
That's not including $25 million the city will need "just to get us to break even," he added.
Mills presented an in-depth assessment of how the city's three major enterprise funds have been handled and budgeted. Enterprise funds are those supported by user fees for specific services rather than by tax dollars.
When assessing service, he reported, reclaimed water fell short when it came to replacement of laterals from the private reclaimed water box to the public main following leak repair because it was patched rather than replaced.
"When we receive reports of leaks that are in need of repair, our goal would be to do that full-service replacement due to the age and condition of our infrastructure," he explained.
However, "due to limited resources in recent years, rather than full-service replacement, (they've) been moving just towards quick fixes. That's one item where I don't think we are meeting our current level of service," he said.
Mills noted the reclaimed water fund would need about $80,000 more a year to make full-service replacements on the system rather than just patching it when it breaks down.
In addition, the revenue collected through reclaimed water system fees "is not sufficient to meet the expenditures." The city has to transfer $381,902 from the general fund to keep the reclaimed water fund solvent.
Petrila noted the reclaimed water fund collects just enough user revenue to pay for the cost of the water from the county, while the system itself depends on the city's general fund to pay for repairs.
Mills told commissioners the stormwater fund depends on drawing $381,902 from the general fund to provide service. "The expenditures exceed the revenues," he noted.
Planned capital improvement projects budgeted for 2025 in the stormwater fund include $1,250,000 for Don CeSar outfall improvements, of which $625,000 is covered by a Florida Department of Environmental Protection Resilient Florida Grant; $500,000 for Belle Vista baffle boxes and $1 million for Don Cesar baffle boxes; $325,000 for Pass-a-Grille Way tide check values; and $98,470 for 45th Avenue drainage improvements.
In questioning from the mayor, Mills noted it does not appear that ongoing maintenance was done to the baffle boxes.
"I think this is an important point," the mayor said. "We've been told for years that our systems are great, that we're doing continual maintenance. We were told everything's doing great, we're not sure where it's coming from, but then there's no maintenance on the tide check valves?"
Mills noted expenditures planned in the stormwater fund are $4,642,856, while expected revenue is $2,570,000, and it will take $226,530 to provide a high-quality level of service.
Another troubled enterprise fund involves the wastewater system, in which a department survey found deficiencies in performing pump station maintenance and developing and implementing a manhole inspection program, as well as a pipe inspection program.
"There's a lot of infrastructure associated with the wastewater program: about 2.8 miles of force main, 41.5 miles of gravity lines, over 750 manholes, three master pump stations and 18 lift stations," Mills explained.
Mills noted in a similar theme to other enterprise funds the wastewater fund also depends on a transfer of $381,902 from the general fund to remain solvent.
Mills advised the city did undertake a force main improvement project -- constructing three additional lift stations -- that "really updated the backbone of our transmission system; the goal was to improve for build-out of our Community Redevelopment District."
"However, I would note that the system does not currently have full capacity to build out all of the island's parcels for our comprehensive plan, due to limitations at the bottleneck which would be our Master Pump Station One," he explained.
"Right now we could not fully build out ... until Master Pump Station One is upgraded," he added.
Petrila asked what the sewer system capacity is currently, adding, "That is a number that's important to understand, because we do have some big decisions coming before the commission in the next couple of weeks and months that will be impacted by that number."
In recent months, resort expansion and the city's sewer systems' ability to handle additional use has been a hotly discussed topic.
Commissioner Lisa Robinson asked, "You said the new force main was beneficial to the redevelopment district, how does that impact on the residential?"
Mills answered, "It has an impact on them too because that force main ultimately feeds to our Master Pump Station One, so that improved systemwide capacity."
In a major capital improvement fund allocation, $3.8 million is dedicated to rehabilitation of Master Pump Station One. Budgeted expenditures in 2025 total $15,311,225, resulting in a level of service shortfall of $1,602,000, he reported.
Capital projects budgeted in the wastewater fund include $800,000 for inflow and infiltration rehabilitation, $375,000 for sewer system cleaning and televising, $40,000 for Force Main One improvements, $50,000 for air release value and installation and rehabilitation, and the most important, costly item, $6,050,000 for Pump Station One rehabilitation, for a total of $7,315,000. The city received a Florida Department of Economic Opportunity grant of $2 million to help defray a portion of the Pump Station One cost.
The wastewater system also incurred major storm damage: $2,032,296 in emergency repairs to Pump Station One, with the 20 other lift stations sustaining $3,415,631 in damages.
Mills noted in about four years the city will have to consider how it will allocate $15 million to replace the transmission line from Pump Station One to the wastewater treatment plant in St Petersburg.
Petrila noted he is "livid" at the thought that "we're not even meeting our current obligations, and somehow in the next five years we have to come up with $25 million" in the sanitary sewer fund. He called the report "shockingly disturbing information before us."
"Our long-term goal would be to implement a rate structure that adequately services this fund so it can be as self-sustaining as we can," Mills suggested.