MSD seeks 4.5% revenue increase; board directs further study of impervious-surface billing
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Summary
Metropolitan Sewer District presented a $255.97 million operating budget and a 2026–2030 capital plan; MSD proposed a 4.5% revenue increase by changing the commodity charge, and the board directed MSD to return with a plan to evaluate billing large impervious-surface properties by end of 2026.
Metropolitan Sewer District staff told the Hamilton County commissioners Dec. 18 that MSD’s 2026 operating budget request totals $255,969,450 and that the district needs a 4.5% revenue increase to fund daily operations and its consent-decree obligations.
MSD said its proposed rate change would leave minimum base charges, surcharges and industrial pretreatment charges unchanged, and would instead move the commodity charge to a single rate for all water usage over the 3 CCF minimum allowance — a shift intended to generate the necessary revenue while protecting residential base charges.
"It has been determined that we need a 4.5 increase in revenue to fund the district," MSD staff said, and added: "We're proposing to keep all the minimum base charges flat... the only change is to our commodity charge, which is the charge for water usage over 3 CCF." The board approved MSD items 10–12 (operating budget, revised sewer rate schedule effective Jan. 1, 2026, and the requested capital appropriation) with two votes in favor and one abstention: Commissioners Driehaus and Summer O’Doomis voted yes; Commissioner Alicia Rees abstained.
MSD’s proposed 2026 capital budget is $153,000,000 for 2026–2030 projects, with an appropriation request of $84,418,116 to begin funding work that will come forward as projects reach construction readiness. MSD staff said capital funding sources include pay-as-you-go cash, bond financing and the state revolving loan program (WPCLF).
Public commenters at the meeting pressed the board on stormwater and impervious-surface billing. Larry Falcon cited an MSD report identifying 49,000 properties that generate stormwater but lack water meters and singled out large landowners such as CSX as examples of parcels that currently do not pay runoff-related costs. "Why am I subsidizing CSX and all the other big land owners like CSX?" Falcon asked the board.
The board responded by approving a staff resolution that directs MSD to further evaluate and develop a proposed program to recover costs for excess wet-weather flow and to return with a plan for board review by the end of 2026. Holly (staff) emphasized that the directive is for MSD to prepare a plan and does not itself implement billing.
Commissioners and MSD staff noted the complexity and the potential distributional effects of shifting costs; MSD said some commercial and high-usage customers could see an increase depending on usage patterns and existing surcharge/deduct meter arrangements. MSD will continue to refine cost estimates and report cost drivers to the board as capital projects and contracts are brought forward.
What’s next: MSD will return with a drafted plan for evaluating impervious-surface billing and with continued updates on capital cost estimates as projects progress.
