Franklin water & sewer budget focuses on maintenance, biosolids operations and meeting SRF debt‑coverage covenants

Water Management Director Michelle Hatcher presented the utilities division budget on March 20, reviewing staffing, assets, capital projects and program enhancement requests and noting the importance of maintaining debt‑service coverage for State Revolving Fund (SRF) loans.

Hatcher said the department has roughly 101 full‑time personnel and manages about 325 miles of water main, roughly 400 miles of sewer (gravity mains and force mains combined) and 24 pump stations. She highlighted improvements at the water reclamation facility and the creation of an in‑house biosolids program and manager; Hatcher said the biosolids manager has helped the department shift from hauling solids to more controlled processing and that internal operator reclassifications and training have supported that operation.

Capital and PER items presented include a fiscal affairs/finance‑oriented position to help manage complex enterprise fund accounting and debt covenant compliance; a maintenance manager vehicle; reclassification and staff shifts to provide three operators per shift at the reclamation facility to improve weekend and vacation coverage; equipment replacements (mini excavator, rubber‑track skid steer replacements, single‑axle dump truck, telehandler for high‑access maintenance), an infrastructure assessment acoustic technology to speed gravity sewer condition surveys, and administrative reclassification of an administrative secretary to an administrative assistant. Hatcher said some capital decreases in FY26 reflect the winding down of ARPA‑funded projects.

Hatcher and city finance staff discussed debt‑service coverage. Michael (staff) said the audited debt service coverage for the water management fund ended the prior fiscal year at about 1.29; the SRF loan covenant requires a minimum coverage ratio of 1.25. The FY26 budget basis shown to committee assumed a target coverage of about 1.51; the department’s current forecast is trending to about 1.72 by year‑end, subject to final rate decisions and any PERs the board approves.

Hatcher emphasized the accounting complexity of the enterprise fund, the need for a finance‑oriented staff resource to manage grants, rate analysis and debt covenant tracking, and said the department is planning equipment purchases mindful of long vendor lead times. Staff also noted capital reductions in the packet largely reflected ARPA project timing and that some ARPA projects are entering their procurement or construction phases.

"We'd like to have a little bit of a cushion," said Michael (city finance staff), describing the practical need for coverage above the SRF minimum to absorb revenue volatility from wet years or other timing changes. Committee members asked clarifying questions on replacement cycles and equipment rotation; Hatcher said the department is working on a replacement schedule using fleet records and the new fleet management tools Public Works described earlier.

All PERs and capital requests were presented for committee consideration; no formal action was taken at the meeting.