Pinellas County weighs $200M+ bond issue to bridge $342M utility CIP funding gap

Pinellas County weighs $200M+ bond issue to bridge $342M utility CIP funding gapWith a $629 million identified capital need and only $287 million currently funded, Pinellas County Utilities is preparing a rate study to evaluate significant debt issuance to address infrastructure renewals and severe inflow and infiltration issues.

The utility's 6-year Capital Improvement Plan (CIP) totals $629 million, leaving a $342 million funding gap under current baseline revenues.

Utilities Director Jeremy Wall noted the county has roughly $400 million in total borrowing capacity, with scenarios modeling a potential $200 million to $250 million bond issue.

Every $50 million borrowed at a 5% interest rate is projected to add $2 to $3 per month to customer bills, meaning a $225 million debt issuance could increase bills by $10 to $12 monthly.

To mitigate capacity-driven capital costs, the county is heavily targeting inflow and infiltration (I&I) reduction after storm events pushed flows at its 33 MGD wastewater plant to 70 MGD.

The utility is also deploying AI customer service tools to manage a massive spike in call volumes following the rollout of a new Advanced Metering Infrastructure (AMI) network.

Pinellas County Utilities is bracing for a major rate and funding review as it confronts a $342 million shortfall in its proposed six-year Capital Improvement Plan (CIP). During an April 16 work session, Utilities Director Jeremy Wall outlined a $629 million portfolio of water and wastewater projects, contrasting it with the $287 million currently available in the utility's funded budget. To bridge the gap, the county is exploring its borrowing options ahead of an upcoming rate study. Wall indicated the utility has approximately $400 million in total borrowing capacity. Scenarios presented to the Board of County Commissioners modeled potential borrowing in the $200 million to $250 million range. Wall cautioned that borrowing will directly impact ratepayers, noting that every $50 million borrowed at a 5% interest rate would add roughly $2 to $3 to a monthly customer bill. A $225 million debt issuance could increase monthly bills by $10 to $12. For the immediate fiscal year 2027, the CIP includes 82 projects totaling $92 million, with $67 million dedicated to construction and $30 million for design and feasibility. Notably, $12 million of the FY27 budget is strictly allocated for relocating water and sewer pipelines to accommodate municipal roadway and stormwater projects. Unlike neighboring Florida counties experiencing rapid horizontal growth, Pinellas County's capacity challenges stem primarily from wet weather rather than population sprawl. The county's wastewater treatment plant, permitted for 33 million gallons per day (MGD), experienced peak flows of 70 MGD during recent storm events due to severe inflow and infiltration (I&I). To avoid the massive intergenerational expense of expanding the treatment plant's capacity, the utility is prioritizing I&I reduction via pipe lining and lateral replacements. "Both of those solutions keep the water from getting to the plant, which now I don't have to go build another treatment train or another clarifier," Wall explained. Despite the financial hurdles, Wall reported that the county's wastewater assets are generally in better condition than industry averages due to proactive rehabilitation and a transition to plastic and lined concrete materials. The water distribution system carries a higher business risk exposure due to its critical life-safety function, though the physical condition of the pipes remains strong. The utility is also navigating customer service pressures following the rollout of a new Advanced Metering Infrastructure (AMI) system, severe weather, and recent rate increases. To manage a spike to 175,000 annual calls, the utility has deployed a new AI chatbot and is integrating AI into its phone system to automate payments and service requests. Additionally, officials are discussing lowering the residential sewer billing cap from 10,000 gallons as an alternative to installing costly secondary irrigation meters for residents.