Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Stormwater Fund topic
No spam. Unsubscribe anytime.
Franklin staff recommends stormwater fee increase to stabilize fund; option to build 15% reserve urged
Summary
City staff presented a stormwater cost-of-service study showing expenditures outpacing revenues and recommended a fee increase in FY27. Officials flagged four options, including an aggressive plan to make the fund self-sustaining and build a 15% reserve; small residential bills would rise modestly under proposed scenarios.
City of Franklin staff on Feb. 10 presented a cost-of-service study for the stormwater fund that shows revenues have not kept pace with rising expenditures, and recommended moving forward with a fee increase in fiscal 2027.
Skye, the city dministration management fellow who led the study, told the Board of Mayor and Aldermen that current revenues cover personnel and operating costs but do not support equipment replacement or capital needs without transfers from the general fund. "Expenditures have continually outpaced revenues since 2022," Skye said, citing past years when the fund relied on reserves or transfers.
The study presented four options. Option 1 would maintain current rates and require increasing general-fund transfers (projected at about $2 million per year by 2030). Option 2 would make the fund self-sustaining in FY27 with an initial jump and smaller inflationary adjustments. Option 3 phases increases over five years to soften rate shock. Option 4—the staff-preferred, more aggressive approach—would raise rates initially and build a roughly 15% fund balance, allowing the fund to better absorb equipment replacements and unexpected costs.
Skye provided examples of customer impacts: under one option, a typical small residential customer would see an annual increase of about $5.31 from 2026 to 2027; under a stronger option that builds reserve the estimated annual increase for that cohort was about $20.70 between 2026 and 2027. Michael Walters Young, the city—hief budget performance officer, said large dips in the fund previously corresponded with equipment purchases and occasional subsidies to capital projects, noting a vac-truck replacement in recent years that exceeded $400,000.
Officials asked how rate changes would affect debt ratings and whether the fund carried debt. Staff replied the stormwater utility does not currently support any debt and that the fund is a separate enterprise, so the city—redit ratings would be affected primarily via general-fund pressure rather than utility debt.
Eric (city executive) urged the board to "take a hard look" at Option 4, calling it the most sustainable approach to prevent repeated general-fund subsidies to core services such as public safety and streets. Board members requested additional detail on the three prior years with large expenditures and asked staff to identify which past costs were one-time equipment purchases versus recurring obligations.
Next steps: staff will include a final recommendation in the FY27 budget proposal to be delivered in early May; the board will consider which option to adopt as part of that budget process.
