Infrastructure upgrades, at a cost

SARASOTA — A $298.5 million Utilities Master Plan drafted by Sarasota officials to replace aging pipes and other infrastructure may raise the rates on residents' utility bills by around 50%.

The plan consists of 135 proposed projects, most of which include replacing and renewing water pipes and structures that are 30 to 100 years old. The projects would take place over 11 years at around $27 million a year.

There are two proposed payment options: pay as you go, and finance.

The first option would mean a 53% increase in monthly water and sewer bills for the average customer over 11 years. The finance option would be a 46% increase.

In the pay-as-you-go option, average rates would rise from the current $80.05 to $122.66 in fiscal year 2030. If the city were to borrow to finance the work, rates would go up to $116.87.

At the end of 11 years, the first option would result in a $3,778 total out‐of‐pocket increase per average customer, and the finance option results in $2,499 total out‐of‐pocket increase per average customer.

The pros of the pay-as-you-go route are that there would be no debt and no debt service. But it would require current rate payers to pay 100% for improvements, and there is a possibility for delay if money isn’t available.

The finance option spreads costs of the facilities to both current and future customers and leverages available funds to accomplish more in less time. One drawback is that the revenue must be used to pay interest and financing costs.

The plan lists the following potential financing options: federal and state grant programs, low interest state and federal revolving loan programs, revenue bonds and potential federal infrastructure program.

In both plans, the city says the rates would remain within the U.S. EPA affordability index, which recommends city water and sewer bills not exceed 4% of the median household income. The proposed rates go from 2% to about 2.5% over the 11 years.

Utilities Director Bill Reibe said at a City Commission meeting on June 17 that this plan is designed to be proactive and update infrastructure before problems happen.

“Problems” are things like water main breaks and sewer discharges.

“It’s like repairing your car one piece at a time,” Riebe said. “It’s easier to do systematic renewal and replacement. It’s the same concept.”

The average lifespan of the pipes is around 70 years, so many of them have reached their end. On top of their age, 40% of the current structures contain asbestos cement or galvanized iron.

The draft lists four main priorities for the projects: regulatory compliance, maintaining reliability, maintaining levels of service and improving resiliency and sustainability.

Top priority projects are replacement and renewal, but the plan includes a few customer service-related projects as well to increase efficiency, such as advanced meter reading technology and online bill pay.

“We’re replacing the pipes. We’re replacing stuff that we need to replace to function,” Riebe said. “There’s not a lot of fluff in here.”

Commissioner Hagen Brody shared his concerns at the meeting regarding funding for the plan.

“We’re rushed into making a $300 million decision. I just think we need to be cautious,” he said. “I would prefer a more varied way to pay for it coming from multiple sources as opposed to putting our entire infrastructure redevelopment on our current city residents.”

A revised plan is to be submitted to the commission July 15 with revisions to the plan, with public input expected. At that meeting, the commission can decide which projects to fund, how to fund them and when to implement them.