ST. PETE BEACH — A little noticed non-ad valorem tax, which appears on yearly property tax bills called a stormwater service assessment, was increased by a total of 10% during this year’s budget process to fund future infrastructure costs.
During a Sept. 13 meeting, Assistant City Manager Vince Tenaglia told commissioners the non-ad valorem property assessment is needed “for the operation and maintenance of the city’s stormwater infrastructure. The assessments are included as a component of the property tax bill.”
The assessment structure includes two billing tiers. Tier 1 is assessed on a per-parcel basis and is imposed to fund the program costs associated with the city’s stormwater system, such as staff time, establishing funding sources and managing the Stormwater Fund. Tier 2 is assessed based upon impervious surface area for individual parcels; higher costs are imposed on properties with physical characteristics that place a greater burden on the stormwater drainage system.
Tenaglia advised that the fiscal year 2022 proposed budget includes a 3% increase on Tier 1 and a 7% increase on Tier 2. The change will mean a property owner now paying a yearly assessment of $62.45 will see that rate go up to $64.32; the rate for Tier 2 will go from $111.62 to $119.43. He said it amounts to a $9 increase for a typical single-family property on an annual basis.
The stormwater assessments were set up back in 2011, Tenaglia noted.
The assistant city manager explained a consultant devised the mechanics the assessment is based upon a decade ago. Woolpert Inc. calculated the equivalent residential unit, or ERU, used to measure the cost for Tier 2 as 3,813 square feet, “based on the typical impervious surface area of a single-family parcel.”
He explained the consultant aerially recorded an impervious surface area on 500 sample properties within the city. He used that data to determine the average impervious surface area for calculating an ERU, which was then applied to all the other residential properties in the city. The city then conducted a similar aerial survey for all other non-residential properties.
“There was a very, very, detailed method to this process back in 2011, specifically looking at individual characteristics of parcels to determine the impact those parcels have on the conveyance of stormwater and therefore the city’s cost to treat stormwater, and maintain our stormwater infrastructure,” Tenaglia said.
He said the assessment is a financial method for the city to secure funding for future stormwater improvement projects.
“We have this big project included in the budget called the Coastal Resiliency Program; it’s a multi-million project that at this stage is just really conceptual,” Tenaglia said. “We don’t really know what the final costs are to treat stormwater and address ancillary tidal flooding issues, but we know there is a really, really big problem that needs to be addressed; it’s in the multimillion-dollar range. In trying to prepare for whatever that is, we are proposing an additional increase to the assessment,” Tenaglia told commissioners.
The proposed budget includes an assumption of approximately $6.5 million in stormwater capital expenditures over the next five years, Tenaglia said. The Stormwater Fund cannot support that level of activity on a cash basis and projections therefore presume borrowing, supported by higher assessments to cover debt service expenses, he said. Meanwhile, the city will be working to secure grant funding to help minimize the extent of any borrowing.
City staff recently applied for Resilient Florida Grant Program funding. This new initiative, managed by the state Department of Environmental Protection, is designed to study and fund flooding and sea level resiliency on a comprehensive, statewide basis. This program will help complete a vulnerability assessment to position the city for future funding opportunities.
Tenaglia said that when the city initially set up the assessment, it included a provision for mitigation. If property owners install stormwater mitigation facilities on site, they can apply for mitigation credit to the city. A mitigation credit is not a total waiver of the fee; it only applies to the second-tier tax, which relates to the impact the parcel has to the conveyance of stormwater. A mitigation waiver could amount to a 20 percent discount on second-tier charges. About a dozen properties have applied for a mitigation discount.
The assessment was unanimously passed with the budget on first reading.