Budget committee flags water and sewer funding risks as Station Hill purchase, sewer moratorium and SAFER grant loom

Spring Hill finance staff warned the Budget and Finance Committee that a mix of one-time purchases, a sewer moratorium and grant expirations could squeeze the citybudget and complicate planned water and sewer expansions.

Miss Holden told the committee the city is likely to run a deficit next fiscal year and attributed most of the shortfall to the $6,000,000 purchase of Station Hill. "The purchase of Station Hill was at 6,000,000," she said, adding the budgeted deficit should be less than that amount because the city can draw on other offsets and fund balance.

Committee members also discussed the impact-fee moratorium. Miss Holden said her office is budgeting impact and adequate-facilities fees at essentially zero for the next fiscal year while watching near-term trends. "We are looking at budgeting adequate facilities and impact fees, basically at 0 for next fiscal year to watch it," she said. Members flagged tourism revenue running behind schedule but were told seasonal events such as the city's mule day usually bring later inflows.

The committee discussed the impending expiration of a SAFER grant that currently covers firefighter wages. Miss Holden said the grant's payroll coverage ends partway through the next fiscal year; the annualized wage exposure for those positions is roughly $750,000 to $1,000,000 and will need to be planned for in FY28.

A substantial portion of the discussion focused on collection challenges in areas where Maury County Water provides water service while Spring Hill supplies sewer, stormwater and refuse. Miss Holden said there are roughly 100 accounts in the dual-customer situation and that some customers have learned they can avoid paying Spring Hill charges because Maury controls water service cutoffs. "We have no recourse of action to make them pay their bill," she said. Miss Holden said Maury County Water is open to billing Spring Hill services on its own bill and enforcing nonpayment, subject to a formal contract and a small administrative fee; she is checking with auditors and the Comptroller's office about legal/administrative constraints before formal negotiations.

Board members expressed concern that the problem could grow with development and urged staff to pursue both short-term fixes and a longer-term policy solution. Some members asked whether Spring Hill could take over those accounts entirely; Miss Holden said shifting accounts would likely require state-level action because utility districts are state-managed. "Utility districts are managed by the state, so that would be a state decision to change that," she said.

Aldermen also pressed for clearer, monthly cost estimates and a funding plan for large water and sewer projects. One member cited an oft-discussed $200,000,000 figure for water and sewer expansion and asked staff to reconcile prior fund spending (including the '1875' fund) and present a prioritized, actionable funding plan. Miss Holden said she is coordinating with department staff and financial advisors to produce reconciliations and preliminary cost numbers for the board.

Members raised the CSA project and possible funding options, including the idea that the sewer fund might purchase roughly 19.5 acres of public-works land being transferred to support CSA completion; staff said they are researching legal questions and reconciling fund balances to determine available resources. The committee closed the public session and moved to executive session for personnel or related confidential matters.

The committee requested follow-up materials, including a reconciled funding plan, monthly trend updates on impact-fee receipts, and legal advice about billing agreements and the use of water/sewer funds for CSA site work.