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Committee weighs stormwater fee increases to shore up fund, staff prefers phased option
Summary
Franklin City staff presented four stormwater rate options ranging from no change to a rate that builds a 15% reserve. Committee members split between a cautious phased approach and moving quickly to Option 4 to reduce general‑fund subsidies; staff recommended a 2027 effective date if rates change.
City staff revisited a stormwater rate study offering four options for the stormwater enterprise fund, saying the choices range from maintaining the current fee to increasing rates enough to build a 15% fund balance.
Scott Gearhart, who led the presentation, told the Budget & Finance Committee on March 19 that Option 1 keeps the current $3.83 per equivalent residential unit (ERU) rate; Option 2 would set rates to make the fund self‑sustaining; Option 3 phases increases to reduce reliance on general‑fund transfers; and Option 4 would create a reserve equal to 15% of the fund balance to cover unexpected expenses. Gearhart said recent years’ outliers in revenues and expenses related to capital projects and equipment replacements — notably the purchase of a vacuum truck and a street sweeper — and that the proposed rates include annualized equipment replacement costs (about $450,000–$500,000 per year).
Alderman Brown (committee member) and others pressed staff on the size and timing of increases. One member noted the jump from $3.83 to $5.94 per ERU under a more aggressive option and called that an abrupt increase for residents. “Going from $3.83 to $5.94 … that’s a pretty healthy number for folks who live here to swallow,” the alderman said. Another member said Option 4 offered prudence: “I tend to lean toward the number 4 … there wasn’t any money in the stormwater fund to do anything” in past years, and a reserve helps avoid repeated general‑fund transfers.
Staff explained why they did not recommend indexing fees automatically: most stormwater costs are personnel related and do not align cleanly with construction cost indices. Gearhart said the rates were modeled per ERU, with different small and large residential and commercial rates folded into the projections, and that an effective date of Jan. 1, 2027, is being explored. He asked the committee for feedback rather than a vote at this meeting.
Next steps: staff will incorporate committee guidance into the final budget recommendation and present formal ordinance language if the committee directs a rate change. At the meeting, some members favored Option 3 (phased adoption) for political and household‑impact reasons; others favored Option 4 to reduce recurring use of general‑fund subsidies.
Provenance: topicintro SEG 664; topfinish SEG 908
