Spring Hill reviews impact of potential sewer moratorium on city development funds

The Budget & Finance Committee Meeting for the City of Spring Hill, TN, held on May 5, 2025, focused on significant financial implications related to development fees and potential impacts on capital projects. The meeting began with a discussion about an upcoming stakeholder meeting involving both residential and non-residential development groups, highlighting the city's ongoing engagement with development stakeholders.

The committee reviewed a memo summarizing the current budget and potential impacts on various funds dedicated to development activities. Spring Hill is one of the few cities in Tennessee authorized to collect specific development fees, a privilege dating back to the arrival of Saturn in the late 1980s. The funds discussed included adequate facilities taxes, roadway impact fees, water development fees, and sewer development fees, all of which are tied to building permits and development activities.

The committee noted that if a sewer moratorium were implemented, halting new connections to the sewer system, it could lead to a significant reduction in development activity. This scenario could result in an estimated $8.4 million decrease in available funds for capital projects, affecting the city's ability to finance essential infrastructure improvements. The breakdown included $2.6 million from adequate facilities taxes, $3.5 million from roadway impact fees, and additional amounts from water and sewer development fees.

Operationally, the development services department currently anticipates $2.5 million in revenue from building permits. A slowdown in development due to a sewer moratorium could severely impact this revenue stream, which supports various operational functions, including planning and engineering services.

The committee acknowledged the potential challenges ahead, particularly concerning road projects and water and sewer infrastructure improvements. The discussion underscored the importance of these funds in maintaining and enhancing city services as Spring Hill continues to grow. The meeting concluded with a recognition of the need for careful planning and consideration of the financial implications of development policies moving forward.