City commits $3.1 million toward utility burial on Lido, St. Armands

Residents on St Armands and Lido keys, seeking greater resilience from the increasing frequency of catastrophic storms, asked the city to consider burying utility lines and charging them a special assessment to pay for it.

The Sarasota City Commission took the necessary first step on Monday by unanimously approving the first of two phases of a not-to-exceed $8 million project — one that puts the city on the hook for $3.17 million should the project not proceed to implementation — to engage Utility Consultants of Florida to execute the first phase of the work.

In doing so, commissioners took the word of representatives of barrier island residents that more than 80% of them support the project, even if it means creating a special assessment district to collect potentially $10,000 per property over 20 years to pay for it. Until the first phase is completed, that exact figure is unknown, but St. Armands Residents Association Vice President Charles Haff told commissioners the 3,500 households on the barrier islands have an idea of what to expect.

“Those are the numbers that have been discussed in our meetings with all of our residents, and that's the number people are kind of prepared for,” Haff said. 

Lido Key Residents Association President Carl Shoffstall added “We floated those numbers out there and nobody had anything negative to say about it. It's got to get done. It's going to save money with storms on the back end, too.”

Even with that level of acceptance, there remains a risk to the city in proceeding with the first phase. The scenarios are:

• Commit to Phase 1, a $3.17 million study to be funded by non-ad valorem revenues and the project does not move to the second phase.
• Commit to the $3.17 million expense and take the word of the St. Armands, Lido Key and Lido Shores residents to accept paying the special assessment to fund both phases of the nearly $8 million project, plus interest.

Once the first phase is completed and the assessments determined, it will require both approval of the affected residents and the City Commission to move forward, a decision to be made as soon as fall of 2027 with the first billing possibly in November. 

Photo by Andrew Warfield

Neither state nor local ordinance establish a minimum of community support for special assessment districts.

“It's up to the commission to decide on the amount of support (to move forward),” said Director of Public Works Nikesh Patel. “The commission can decide if they want 75% support or 60%. Once we hire the consultant, we'll provide all those options to the commission to make a decision on what that threshold needs to be and how we're going to collect the votes.”

Director of Financial Administration Kelly Strickland told commissioners the finance vehicle is a tax-exempt, non-revolving credit facility with a maximum capacity of $8 million. The city may draw from that facility as needed and in any amount up to the ceiling. The intended path for the special assessment revenues is to repay the amounts drawn should the special tax district or districts be approved. 

If the assessment districts do not proceed, Phase 2 would stop, but the city would remain responsible for the principal and interest and eligible costs previously incurred. The proposed five-year capital improvement program includes $1.3 million of Surtax IV funding for burial in increments of $400,000 in each of fiscal years 2027, 2028 and 2029, plus $100,000 in fiscal year 2030. Any remaining obligation would require other non-ad valorem revenues and future budget action.

“I am very confident that the residents will (support the special assessments) since they brought this forward, this is what they want, and they know that it's going to cost money,” said Commissioner Jen Ahearn-Koch. “They're well aware of the process, so they're not going into this blind and thinking that it's going to be something that it's not.”

The scope of the project also encompasses City Island, which is owned by the city.