Fitch Ratings-New York-19 November 2025:<\/p>\n
Fitch Ratings has assigned a ‘AA’ rating to the following St. Petersburg, FL (the city) bonds:<\/p>\n
–Approximately $128.3 million public utility revenue bonds, series 2025C.<\/p>\n
The bonds are scheduled to sell the week of Dec. 1 on a competitive basis. Bond proceeds will be used to finance and\/or reimburse the costs of the acquisition, construction, and erection of additions, improvements, and extensions to the system, as well as pay issuance costs.<\/p>\n
In addition, Fitch has affirmed the following utility system bonds at ‘AA’:<\/p>\n
–$684.4 million in outstanding public utility revenue bonds.<\/p>\n
Fitch has also assessed the system’s Standalone Credit Profile (SCP) at ‘aa’. The SCP represents the credit profile of the combined water, sewer, reclaimed water and stormwater systems (the system) on a standalone basis irrespective of its relationship with and the credit quality of the city of St. Petersburg, FL (Issuer Default Rating [IDR] AA+\/Stable).<\/p>\n
The Rating Outlook is Stable.<\/p>\n
The ‘AA’ utility revenue bond rating and ‘aa’ SCP reflect the system’s ‘Very Strong’ financial profile within the framework of ‘Very Strong’ revenue defensibility and ‘Very Strong’ operating risk profile, both assessed at ‘aa’. The system’s leverage, measured as net adjusted debt to adjusted funds available for debt service (FADS), was exceptionally low at 4.6x in fiscal 2024 (FYE Sept. 30) and is projected to increase to 6.8x over the five-year horizon in Fitch’s Analytical Stress Test (FAST) rating case, retaining ample headroom for the rating.<\/p>\n
The moderate leverage increase is expected as the system enters a period of heightened capital spending related to upgrading aging infrastructure and adding system capacity. Annual capital spend is expected to peak in fiscal 2026 at $212 million, averaging $179 million through fiscal 2029, relative to average spending of $70 million over the last five years (2020-2024). To support the additional debt and fund a targeted 50% of the capital improvement plan (CIP) from cash resources, the system plans to continue adopting annual rate increases. The most recent rate study plans for annual increases of approximately 7% for water and sewer, and approximately 10% for reclaimed water for fiscal 2027 through fiscal 2029. Anticipated stormwater rate increases range from 4% to 15% through fiscal 2029.<\/p>\n
Following the surge conditions and wind impacts to the city’s infrastructure during hurricanes Helene and Milton, the St. Pete Agile Resilience (SPAR) program was created to prioritize key capital projects that will strengthen the city’s infrastructure. Most projects are targeting stormwater drainage improvements, sewer treatment plant preparedness, and drinking water distribution improvements.<\/p>\n
SECURITY<\/p>\n
The bonds are secured by a first lien pledge of the net revenues of the city’s public utility system, which includes the water fund (water, sewer and reclaimed water) and the stormwater fund. Pledged revenues do not include impact fees.<\/p>\n
KEY RATING DRIVERS Revenue Defensibility – ‘aa’<\/p>\n
Favorable Service Area, Affordable Rates for a Significant Majority of the Population<\/p>\n
The city retains the legal authority to adjust rates as needed without external oversight. Fitch considers the monthly residential water and sewer bill affordable for around 78% of the service area population based on standard monthly usage of 7,500 gallons for water and 6,000 gallons for sewer. The favorable service area is characterized by midrange income levels, a moderate unemployment rate relative to the nation and midrange customer growth. Customer growth registered a five-year compound annual growth rate of 0.1% as of fiscal 2024. Income levels are about 7% lower than the national median as of 2023. The unemployment rate was 3.2% in 2024 and has averaged 18% less than the national level over the past five years.<\/p>\n
Following continued rate increases through fiscal 2024, the system restructured water rates for fiscal 2025, resulting in a significant increase to the monthly water bill based on Fitch’s standard monthly usage of 7,500 gallons for water. The updated water rate structure is expected to incentivize additional water conservation and give customers more control over their water bill; average residential water usage is reported closer to 3,500 gallons per month within the service area.<\/p>\n
Operating Risk – ‘aa’<\/p>\n
Low Operating Cost Burden, Moderate Investment Needs<\/p>\n
The system’s operating risk profile remains very strong despite its rising operating cost burden. Excluding stormwater costs (as there are no measurable flows), the system’s operating cost burden grew from around $7,600 per mg in fiscal 2023 and $7,800 per mg in fiscal 2024. Growing costs related to system expansion and ongoing operations that result in a sustained increase in the cost burden could result in a lower operating risk assessment. The life cycle ratio was very low at 41% in fiscal 2024. Annual capital spending relative to depreciation averaging 186% over the last five fiscal years from 2020 to 2024. Planned capital spending for the next five years should generally outpace historical depreciation, supporting a continued very low life cycle ratio.<\/p>\n
Estimated actual spending in fiscal 2025 plus planned spending through fiscal 2029 totals $824.6 million. The capital plan targets water reclamation facility upgrades, water distribution maintenance, pump station improvements, and storm drainage improvements. Over half of the CIP is to be funded through new and existing debt, including the current issuance. The remaining CIP is to be funded through cash and approximately $22.0 million in grant revenue.<\/p>\n
Financial Profile – ‘aa’<\/p>\n
Leverage to Moderately Increase, Neutral Liquidity<\/p>\n
The system had exceptionally low leverage of 4.6x as of fiscal 2024. This has declined over recent years with FADS growth benefitting from ongoing rate adjustments and recent boosts in investment income. The liquidity profile is neutral to the overall assessment with current days cash on hand of 833 and coverage of full obligations of 2.2x. Fitch-calculated total debt service coverage for fiscal 2024 was 2.8x, which excludes fixed service expense.<\/p>\n
The FAST considers the potential trend of key ratios in a base case and stress scenario over a five-year period. The stress scenario is designed to impose capital costs 10% above expected base case levels and evaluate potential variability in projected key ratios. The FAST reflects Fitch’s view of a reasonable scenario, which is generally informed by publicly available and\/or management provided information with respect to capital expenditures, user charges and rate of revenue and expenditure growth.<\/p>\n
In the base case scenario, the leverage ratio is expected to increase to 6.3x in fiscal 2027 before falling to 6.2x in fiscal 2029. In the stress scenario, which is considered the rating case, the leverage ratio is projected to increase to 6.8x over the five-year horizon. The liquidity profile is expected to remain neutral to the assessment over the five-year horizon.<\/p>\n
Asymmetric Additional Risk Considerations<\/p>\n
No asymmetric additive risk considerations affected this rating determination.<\/p>\n
RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action\/Downgrade<\/p>\n
— Sustained leverage approaching 9.0x within Fitch’s rating case scenario, provided maintenance of current revenue defensibility and operating risk assessments;<\/p>\n
— Rate adjustments that significantly outpace income growth, which could weaken the system’s rate flexibility;<\/p>\n
— Sustained growth in operating cost burden driven by ongoing system expansion and\/or operations could weaken the operating cost assessment, decreasing the level of acceptable leverage.<\/p>\n
Factors that Could, Individually or Collectively, Lead to Positive Rating Action\/Upgrade<\/p>\n
— Sustained leverage below 6.0x within Fitch’s rating case scenario, provided maintenance of current revenue defensibility and operating risk assessments.<\/p>\n
PROFILE<\/p>\n
The city is in Pinellas County, approximately 20 miles southwest of Tampa. The system provides water, sewer, reclaimed water and stormwater service to an estimated 300,000 residents located within the city and adjacent areas of the county. The revenues of all four utilities are pledged to the bonds, although the stormwater system is accounted for and operated as a separate enterprise. Fitch’s analysis and calculated metrics are based on the combined financial results of all four utilities.<\/p>\n
The system, mostly residential, serves approximately 95,000 water, 84,000 sewer, 82,000 stormwater and 11,000 reclaimed water accounts. The customer base is diverse and stable, and Fitch expects future customer growth to be limited by the largely developed nature of the city.<\/p>\n
The city supplies wholesale water to the city of Gulfport and wholesale sewer service to the cities of South Pasadena, Gulfport, St. Pete Beach and Treasure Island, as well as to the Bear Creek Sanitary District, Fort DeSoto Park and Sunshine Water Services (referred to as Tierra Verde). Wholesale water to Gulfport accounted for about 1% of total system revenues and revenues from wholesale sewer (led by the city of St. Pete Beach) accounted for approximately 6% of total system revenues in fiscal 2024.<\/p>\n
The city’s sewer operations include three treatment facilities and one emergency wet weather storage facility, which treats effluent to advanced secondary standards, producing recycled water that is sold through the city’s reclaimed water distribution system and disposed of through deep injection wells.<\/p>\n
The city does not own any drinking water resources but is one of six member governments of Tampa Bay Water (TBW; IDR AA\/Stable), a special district of the state created by an inter-local agreement to plan, develop and deliver high-quality water to the region. TBW has existing water supplies to meet member needs for at least the next 15-20 years, or perhaps longer depending on growth and conservation efforts.<\/p>\n
Fitch considers the system to be a related entity to the city for rating purposes given the city’s oversight of the system, including the authority to establish rates and operations. The credit quality of the city does not currently constrain the bond rating. However, given the city is a related entity, the issue ratings could become constrained by a material decline in the general credit quality of the city.<\/p>\n
St. Petersburg’s Response to Updated EPA Regulations<\/p>\n
The city is addressing new regulations set forth by the U.S. EPA. The EPA’s enhanced focus on lead and copper lines and per- and polyfluoroalkyl (PFAS) contaminants has led to the finalized Lead and Copper Rule Improvements (LCRI) along with specific testing requirements for PFAS, though recent EPA announcements suggest the testing and treatment requirements for PFAS could change. The city met the LCRI inventory requirement and found no lead service lines within the system. In addition, the system reports no issues related to PFAS.<\/p>\n
Sources of Information<\/p>\n
In addition to the sources of information identified in Fitch’s applicable criteria specified below, this action was informed by data from DIVER by Solve.<\/p>\n
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG Considerations<\/p>\n
The highest level of ESG credit relevance is a score of ‘3’, unless otherwise disclosed in this section. A score of ‘3’ means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch’s ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch’s ESG Relevance Scores, visit https:\/\/www.fitchratings.com\/topics\/esg\/products#esg-relevance-scores.<\/p>\n
St. Petersburg (FL) [Water, Sewer]<\/p>\n
—-St. Petersburg (FL) \/Water, Sewer & Stormwater Revenues\/1 LT; Long Term Rating; Affirmed; AA; Rating Outlook Stable<\/p>\n
Contacts:<\/p>\n
Primary Rating Analyst<\/p>\n
Natalie Hughey,<\/p>\n
Associate Director<\/p>\n
+1 212 908 0614<\/p>\n
natalie.hughey@fitchratings.com<\/p>\n
Fitch Ratings, Inc.<\/p>\n
Hearst Tower 300 W. 57th Street<\/p>\n
New York, NY 10019<\/p>\n
Secondary Rating Analyst<\/p>\n
Allison Clark,<\/p>\n
Director<\/p>\n
+1 646 582 4562<\/p>\n
allison.clark@fitchratings.com<\/p>\n
Committee Chairperson<\/p>\n
Audra Dickinson,<\/p>\n
Senior Director<\/p>\n
+1 512 813 5701<\/p>\n
audra.dickinson@fitchratings.com<\/p>\n
MEDIA RELATIONS: Cristina Bermudez, New York, Tel: +1 212 612 7892, Email: cristina.bermudez@thefitchgroup.com<\/p>\n
Additional information is available on www.fitchratings.com<\/p>\n
ADDITIONAL DISCLOSURES<\/p>\n
Dodd-Frank Rating Information Disclosure Form<\/p>\n
Solicitation Status<\/p>\n
Additional Disclosures For Unsolicited Credit Ratings<\/p>\n
Endorsement Status<\/p>\n
Endorsement Policy<\/p>\n
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS:\/\/WWW.FITCHRATINGS.COM\/UNDERSTANDINGCREDITRATINGS. IN ADDITION, THE FOLLOWING HTTPS:\/\/WWW.FITCHRATINGS.COM\/RATING-DEFINITIONS-DOCUMENT DETAILS FITCH’S RATING DEFINITIONS FOR EACH RATING SCALE AND RATING CATEGORIES, INCLUDING DEFINITIONS RELATING TO DEFAULT. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT HTTPS:\/\/WWW.FITCHRATINGS.COM\/SITE\/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE OR ANCILLARY SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF PERMISSIBLE SERVICE(S) FOR WHICH THE LEAD ANALYST IS BASED IN AN ESMA- OR FCA-REGISTERED FITCH RATINGS COMPANY (OR BRANCH OF SUCH A COMPANY) OR ANCILLARY SERVICE(S) CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH RATINGS WEBSITE.<\/p>\n
Copyright \u00a9 2022 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch\u2019s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and\/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch\u2019s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed.<\/p>\n
The information in this report is provided \u201cas is\u201d without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers.<\/p>\n
For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001<\/p>\n
Fitch Ratings, Inc. is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (the \u201cNRSRO\u201d). While certain of the NRSRO\u2019s credit rating subsidiaries are listed on Item 3 of Form NRSRO and as such are authorized to issue credit ratings on behalf of the NRSRO (see https:\/\/www.fitchratings.com\/site\/regulatory), other credit rating subsidiaries are not listed on Form NRSRO (the \u201cnon-NRSROs\u201d) and therefore credit ratings issued by those subsidiaries are not issued on behalf of the NRSRO. However, non-NRSRO personnel may participate in determining credit ratings issued by or on behalf of the NRSRO.<\/p>\n","protected":false},"excerpt":{"rendered":"Fitch Ratings-New York-19 November 2025: Fitch Ratings has assigned a ‘AA’ rating to the following St. Petersburg, FL…\n","protected":false},"author":2,"featured_media":7821,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[202,204,203,199,201,200],"class_list":["post-52977","post","type-post","status-publish","format-standard","has-post-thumbnail","category-st-petersburg","tag-st-pete","tag-st-pete-headlines","tag-st-pete-news","tag-st-petersburg","tag-st-petersburg-headlines","tag-st-petersburg-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts\/52977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/comments?post=52977"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/posts\/52977\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/media\/7821"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/media?parent=52977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/categories?post=52977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-fl\/wp-json\/wp\/v2\/tags?post=52977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}