New county water quality fee proposed as potential revenue source to back bonds
Given the strong fiscal health of Sarasota County, the majority of the county commissioners this week expressed a willingness to borrow money to put the county’s water quality programs on equally firm footing.
After a comprehensive staff presentation on what has been done and what could be done to reduce the nutrient load going into the county’s waterways — and, ultimately, the Gulf of Mexico — Commissioners Michael Moran and Christian Ziegler indicated a preference for upgrading the county’s three wastewater treatment plants to advanced treatment facilities (AWWTF) at an expense estimated between $70 million and $90 million. The goal would be to reduce the total nitrogen discharge to 3 milligrams (mg) per liter, or less, from the Bee Ridge, Central County and Venice Gardens facilities, Mike Mylett, interim director of the county’s Public Utilities Department, told the board members on May 8.
The total nitrogen load for the Bee Ridge facility is 14 mg per liter; for the Central County plant, 9; and for Venice Gardens, 14, according to a slide Mylett showed the commissioners. A note on that slide said that 2 mg per day is removed from the overall nitrogen load produced by each facility, thanks to deep well injections.
Altogether, the three county wastewater treatment plants, along with facilities in the City of Sarasota, Venice, North Port and Englewood — plus 35 private operations — produce about 624,000 pounds of nitrogen a year, Mylett pointed out, although not all of that goes directly to the bays. (Only the City of Sarasota facility is an AWWTF, according to a chart Mylett showed the board. That initiative cost the city $80 million, he said.)
With the improvements to the county’s three wastewater treatment plants, the slide noted, the total nitrogen load could be reduced to about 298,000 pounds a year.
Red tide research has shown that nitrogen is the primary feeder for the algae that produces the blooms, Karenia brevis.
All of the commissioners talked of the fact that this would be an opportune time for them to pursue the borrowing of money for major projects.
Altogether, staff said on May 8, a variety of proposals — including the elimination of more septic tanks and improvements to stormwater systems — would cost about $310 million. Extra annual operating expenses — an estimated $20 million — would be necessary, as well.
“To me, after hearing all this,” Commissioner Moran began, “I feel that all roads lead back to us moving our community to [advanced wastewater treatment].” That conversion, he continued, would lead to the biggest return on investment for the taxpayers.
Referencing the Comprehensive Annual Financial Report presentation the board heard on May 7 — provided by the Office of the Sarasota County Clerk of the Circuit Court and County Comptroller — Moran added, “Our debt ratios are incredibly fiscally conservative, [and the county’s bond ratings] are excellent. … Our interest rates are at historic lows. … I want the true solution to this,” he told Chuck Walter, manager of the county’s Stormwater Division, “and then we make the difficult decisions.”
“I think Commissioner Moran is right,” Commissioner Ziegler said, adding that he would like for staff to come back to the board with funding options that would lead to the greatest positive results.
Commissioner Alan Maio further pointed to the community pressure on the board to try to prevent a recurrence of the economic devastation of red tide last year, noting “the bludgeoning” businesses took.
As Spencer Anderson, director of the county’s Public Works Department, put it at the outset of the presentation, the red tide bloom that worsened in early August 2018 and persisted for several more months “was crippling, to say the least,” to the county’s economy.
Commissioner Nancy Detert asked staff members for detailed cost estimates — including the potential expenses to homeowners of specific proposals — and information about sources of revenue. “I think we need to put our plan into effect while we can still borrow really cheap.”
In response to a question from Detert, Walter said that over the past six or seven years, the county has received about $50 million from various sources for water quality initiatives. “There’s probably going to be more external money available [in the future],” he added. However, almost all grants require significant local matches, he noted.
Gov. Ron DeSantis has let the Southwest Florida Water Management District (SWFWMD) board and staff know that he wants the district to put a focus on water quality improvements that will benefit the Gulf of Mexico, Chair Charles Hines added.
The board members further concurred that they will need to make decisions about exactly how they want to proceed as they hold discussions in June during their workshops on the 2020 fiscal year budget.
In response to a question from The Sarasota News Leader, the county Office of Financial Management (OFM) reported in a May 9 email that the commission could not issue bonds totaling more than $23,712,978 if it pursued a general government borrow that would have to be paid off with property tax revenue. Any amount above that tied to ad valorem tax revenue would have to be approved by voters through a referendum, mirroring the process the commission pursued last year to raise money for the North Extension and other connections of The Legacy Trail.
The bonding limitation is laid out in Section 5.2D of the County Charter.
However, the OFM staff pointed out that no limitation exists if the commission were to issue bonds that would be paid back with revenue generated by an “Enterprise fund.” The county Stormwater and Solid Waste divisions, for examples, produce revenue from user fees; thus, those accounts are called “Enterprise funds.”
On May 8, Chair Hines emphasized that the commissioners must make sure the members of the public understand that they can expect higher costs pegged to new county initiatives.
One funding option that Walter, manager of the Stormwater Division, proposed is a county assessment on property owners, with the revenue dedicated to improved water quality. Staff would like to explore that, Walter said. If the county had funds from such an assessment, he explained, “Then we would have a significant bonding component right upfront.”
Walter meant that the county could pledge the revenue from the assessments to debt service for bonds.
The seagrass issue
During his part of the presentation, Walter also cautioned the board members that if they do not pursue measures to improve the quality of water in the bays — in the face of demonstrated seagrass loss — then it is likely they will have to contend with state and federal regulatory action dictating the steps they must take to achieve specific goals.
A slide Walter showed the board said that from 2016 to 2018, Lemon Bay lost 319 acres of seagrass; Little Sarasota Bay, 196 acres; Sarasota Bay, 149; Blackburn Bay, 95; and Roberts Bay, 12 acres. Those estimates came from SWFWMD on March 27, the slide noted.
Only Dona Bay has seen an increase in seagrass acreage, thanks to county initiatives over the past years to improve its water quality, staff has explained.
Commissioner Detert talked of her desire for the commission to act on its own before such regulatory oversight might become necessary.
What does the public want?
As they discussed how best to proceed, Chair Hines said he hopes the public will contact the commissioners about preferences for board priorities among those staff had discussed that morning.
Hines referenced the primary areas of focus: the conversion to the advanced wastewater treatment plants; continued removal of septic tanks in the Phillippi Creek Basin, plus a proposal for a new program that would entail pumping out private septic tanks every five years and concurrent tank inspections; and the improvements to stormwater systems.
The pump-out/septic tank inspection program would necessitate changes to the County Code, Chuck Henry, director of the county’s Health and Human Services Department, explained. It would be designed for homes in the more rural areas of the county that are distant from sewer connections, he indicated.
About 20,000 septic systems across the county are within 900 feet of surface waters, Henry said, as determined by a Sarasota Bay Estuary study. The total estimated cost for new sewer systems to eliminate just the 12,000 septic tanks in the unincorporated part of the county is $190 million, Henry pointed out.
Altogether, about 40,000 septic systems remain in operation countywide, Henry said.
Hines talked of his interest in a suggestion Walter, the Stormwater Division manager, had made: working with the City of Sarasota to use city right of way to the eastern part of the county to lay new county pipeline that would divert stormwater from the Whitaker Bayou and Phillippi Creek watersheds. That stormwater then could be used for irrigation or other purposes, Walter explained.
The City of Sarasota uses the right of way corridor for its reclaimed water distribution system, Walter noted.
The estimated expense of the county project was put at $40 million, with the goal of removing 20,000 pounds of nitrogen a year from the waterways and reducing flooding in neighborhoods.
“Whitaker Bayou’s been a problem for many, many years,” Hines said.
“We’re really solving multiple issues with a solution like this,” Walter pointed out.
Education and outreach
At various times during the approximately 95-minute discussion, commissioners also stressed the need to educate the public about what the county has done to improve water quality, as well as the benefits of the new proposals.
Both Commissioners Detert and Maio talked of the reluctance of homeowners to pay to convert from septic tanks to sewer systems.
As a Florida legislator prior to becoming a commissioner, Detert noted, she helped win state grants for the conversion to central sewer of most of the approximately 10,000 septic systems in the Phillippi Creek Basin. If the county were able to make the switch to central sewer less expensive, she said, more people would agree to it.
Henry, the Health and Human Services director, acknowledged, “The biggest pushback we always hear is … ‘I’m on a fixed income right now, [and] I pay nothing for my wastewater …’”
“On the other side of that,” Henry said, is the fact that “there’s a cost to the community and the environment.” Every homeowner hooked up to central sewer pays a monthly bill, Henry pointed out, which helps keep the environment clean.
Maio talked about the “absolute uproar” he has heard from residents of subdivisions without sewer systems when he has talked about the county’s efforts to eliminate septic tanks. Yet, Maio continued, those homeowners generally do not think about the necessity of leaving their property vacant around the septic tanks, which means they cannot have detached garages or in-ground swimming pools, for examples. They would have freer use of their land, he pointed out, if they were using a central sewer system.
Commissioner Ziegler said he had not thought about that. “Being able to get a significant chunk of your property back … is a big selling point.”
Members of the staff of the University of Florida/Institute of Food and Agricultural Sciences Extension Program (UF/IFAS) in the county “will be critical,” Henry said, in helping property owners understand the benefits of eliminating septic systems.
Ziegler also talked of the need for the commissioners and county staff to “get more aggressive” with county communications to the public, noting how much misinformation he hears. “The community wants [the facts]; I don’t think they’re misinformed on purpose.”