City Commission agrees unanimously to issuance of $8 million in bonds, with about $3.1 million to go to consultant for preliminary work
On a unanimous vote this week, the Sarasota city commissioners agreed to the issuance of $8 million in bonds to start a process that could lead to the relocation of utility lines underground on Lido and St. Armands Keys.
During their regular meeting on July 20, they also voted 5-0 in approving an agreement with a consultant to support city staff in laying the groundwork for such a venture.
If the City Commission ends up agreeing to move the utility lines underground, Nik Patel, director of the city’s Public Works Department, reported that assessments of the affected property owners would be used to pay off the bonds, including the debt service for them.
Commissioners initially expressed reservations about the commitment of the funding for the preliminary work, given concerns about the outcome of the state’s Nov. 3 General Election referendum on property tax revenue. The total for what Patel called the Phase 1 services, as described in an exhibit attached to the agreement with the consultant, was $3,175,555.
However, Carl Shoffstall, long-time leader of the Lido Key Residents Association (LKRA) and Chuck Haff, vice president of the St. Armands Residents Association, told the commissioners that surveys of the residents on both keys had indicated a high level of support for the undergrounding initiative.
The LKRA board members voted unanimously in favor of the proposal, Shoffstall said. “We wholeheartedly hope you approve this …”
In response to questioning by Commissioner Jen Ahearn-Koch, Shoffstall reported that “Well over 90%” of the membership of his organization supports the project.
Haff noted that his association’s leaders have had regular discussions with St. Armands homeowners about the proposal, and the organization had conducted annual surveys of residents on the topic. Their level of support is “above 80% …”
Haff stressed, “People have been through a lot with [the 2024 hurricanes], and they know they need resiliency with their electricity.”
Mayor Debbie Trice noted, however, that those responses have come without actual knowledge of property owners’ assessments.
Haff told her that the figure that had been “floated during [the association’s] meetings is approximately $10,000; maybe a little higher.
Shoffstall pointed out that the total would be paid over 20 years, adding that none of the LKRA members had expressed objections to the amount.
“It’s gotta be done,” Shoffstall emphasized of the proposed undertaking.
The investment in underground electrical lines will “save money with storms on the back end, too,” he added.
When Commissioner Ahearn-Koch asked Patel of Public Works what the minimum percentage of residents’ approval would be necessary for the board to go forward with the undergrounding, he told her it is 60%, though it would be up to the commissioners to set the percentage they wanted to achieve before approving the initiative.
Patel did underscore Haff’s observation in answering a question that Vice Mayor Kathy Kelley Ohlrich had asked.
“In 2024,” Patel said, “six different events caused flooding on the barrier islands, especially [Hurricanes] Helene and Milton. … There were days and days without power” for Lido and St. Armands residents, he pointed out. In some cases, he indicated, people were without power for a month.
“And that’s why this sounds like a really good idea?” Ohlrich asked.
“Correct,” Patel replied.
If the board members ultimately elect to proceed with plans for the initiative, Patel told them, the extra services from the consulting firm would add up to $4,770,270. Thus, the bond would provide the necessary funding capacity for the full contract, he said.
“The [bond money] would be drawn only as eligible costs are incurred,” Patel emphasized, “and the city would pay principal and interest only on the amount actually drawn.”
He made it clear that the action the commissioners were being asked to approve that day did not include approval of proceeding with the undergrounding initiative. The consultant, Patel stressed, would pull together the necessary information for presentation first to the affected property owners — including the amounts each would be expected to pay — and then to the commissioners, before the board would be asked to decide whether to go ahead with the project.
In response to another question from Ohlrich, Patel said that after the residents have the financial details, they first would vote on whether they wanted the city to proceed with the work. If the outcome were positive, he added, then the City Commission would vote.
City Engineer Sage Kamiya pointed out that the timeline calls for the consultant to present parcel assessment estimates to the property owners and then obtain direction from the board before the end of the winter in 2027. If the commission decides to proceed, he added, the necessary public hearings would take place later in 2027, with the first assessments billed in November 2027.
Digging into the financial aspects of the plan
Kelly Strickland, director of the city’s Financial Administration Department, stressed of the funding plan, “It is not a general obligation debt. … No ad valorem taxes are pledged in this,” she added, referring to property tax revenue.
After making the motion to approve an agreement with Utility Consultants of Florida to serve as the consultant, Commissioner Liz Alpert referenced the remarks of Shoffstall and Haff in saying, “I think that it’s more than likely that this will get approved by the residents,” given the survey results.
“I know the residents out there really want this,” Alpert added.
Earlier, she had questioned the initial expense of $3.1 million for the consultant, which the city would have to cover if the initiative did not go forward.
Strickland explained that the city will be able to use funds it receives out of the Sarasota County Surtax 4 Program — which entails an extra penny of sales tax that is dedicated to infrastructure projects — to cover any debt service payments prior to the start of assessments.
“In the event that [the undergrounding] is not approved,” Strickland continued, the $3.1 million would have to come “from other sources,” including the General Fund. The latter account covers expenses for which no other city source can be located.
Strickland stressed, “Penny sales tax is strictly for infrastructure.”
“I really want this to happen,” Alpert responded, “but $3 million just to [explore the potential] seems a lot of debt for the city to take on.”
In seconding Alpert’s motion on the consultant’s contract, Commissioner Ahearn-Koch concurred with Alpert’s comment about the property owners’ support: “I’m very confident … this is what [the residents] want. They’re not going into this blind. … I think the neighborhood associations have kept them well-informed.”
“I think this is far and away long overdue,” Commissioner Kyle Battie pointed out. “We pride ourselves on being a smart city” in terms of steps taken to improve storm resiliency, he continued. “This [undergrounding project] should have happened long ago.”
The agreement with the consultant includes the following “Goals and Objectives”:
Formally, the agreement notes, the project districts are the “St. Armands Business Area”; the “St. Armands Residential Area”; and “Lido Key, including Lido Shores, Ken Thompson [Park and] Ted Sperling Park … commercial and residential areas.” It adds that, among the utility elements would be “primary electric feeders, lateral circuits, pad-mounted transformers, switch cabinets, communications pedestals, service laterals, sea-turtle-friendly and dark-sky-compliant lighting, and full surface restoration (pavements, sidewalks, landscape, and hardscape).”
Further, the agreement explains, “The Consultant will support early outreach, public information, and communication with residents, merchants, associations, and other stakeholders. This includes preparing clear materials and maintaining an online presence with accessible program information. All outreach, facilitation, communications, and digital tools must be conducted in coordination with City staff and in compliance with all applicable City Codes, City policies, State Laws (including Florida Sunshine Law and Public Records Law), ADA [Americans with Disabilities Act] requirements, and digital accessibility standards.”
The public stakeholders are as follows, as delineated in the document: “St. Armands residents, St. Armands merchants, and St. Armands commercial property owners, Lido Key Residents Association, Lido Shores property owners, hospitality operators, the St. Armands Circle association, City Island leaseholds, and neighborhood and business associations, among others.”
Among the agencies that also are stakeholders are Florida Power & Light Co. (FPL), the Florida Department of Transportation and Sarasota County Government, the document also points out.
Further, the agreement says, Utility Consultants of Florida must do the following:
- Provide “Geographic Information System (GIS) interactive maps for boundaries, design status, and construction phasing.”
- Publish “parcel-level estimated assessments by land use (residential, commercial, and vacant) before adoption and auto-updates to the adopted roll after City Commission action.”
- Offer “downloads in comma-separated-value and spreadsheet formats, a weekly construction dashboard, and a searchable frequently asked questions page.”
During his remarks to the board, Public Works Director Patel referenced another section of the agreement that would be of benefit to city staff even if the undergrounding initiative did not end up taking place. That section says that the consultant will “identify and map existing underground utilities using survey, records research, and non-invasive field methods. This work will include reviewing available utility records [and] coordinating with utility owners …”
He told the commissioners, “The benefit from a technical standpoint is that we would have a good data source of what’s out on the barrier islands.” That information would be helpful in regard to any future infrastructure improvements on the keys, he noted.