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MSD describes $1.1 billion Phase 2b consent-decree program, warns of rate impacts
Summary
Metropolitan Sewer District officials told the Finance Committee the agency faces a multi-year $1.1 billion Phase 2b consent-decree capital program and a 4.5% rate adjustment approved for 2026; MSD said limited federal grants and rising costs mean financing will rely primarily on rate revenue, loans and bonds.
Director Christie of the Metropolitan Sewer District (MSD) briefed the Finance Committee on MSD’s operating and capital needs and the agency’s compliance obligations under the Clean Water Act consent decree. Christie said MSD’s operating budget was approximately $255.9 million and the capital budget for 2026 is about $154 million; she also described Phase 2b of the consent-decree capital program as a roughly $1.1 billion, 10-year project.
“This is a $1,100,000,000 Phase 2b program,” Christie said, describing long-term capital commitments required to bring the system into compliance. Christie said MSD achieved 100% permit compliance in the first two quarters and emphasized that many capital costs arise from consent-decree mandates to reduce overflows and expand infrastructure.
Christie told the committee that a 4.5% rate increase was approved in December for calendar year 2026 and that the increase reflected a rate-structure adjustment which shifted a portion of costs from residential customers onto higher-volume commercial and industrial users. She said there is limited federal grant funding available for consent-decree work; the program will be funded through a combination of rate revenue, low-interest state loans, bonds and internal financing.
MSD also described a customer assistance program that provides a 25% bill discount to low-income senior homeowners; the program reached about 18% of eligible customers so far against a 25% participation goal and officials said the total number of potentially eligible seniors is estimated at about 19,000.
Councilmembers questioned the agency on wet-weather overflows, staffing under collective bargaining agreements, and how city–county budget relationships affect MSD’s calendar-year budget. The presentation was filed for the record; councilmembers asked MSD to return with follow-up on overflow counts, outreach plans for the senior discount program, and further rate modeling.
