Spring Hill administrator recommends $150.8 million FY2027 budget as wastewater consent decree shapes priorities

City Administrator J. Carter Napier recommended that the Board of Mayor and Aldermen adopt a $150,775,552 operating budget for Fiscal Year 2027, effective July 1, 2026, with a public hearing set for June 1 and a final reading on June 15, 2026. Napier framed the proposal as a conservative, balanced plan that anticipates quarterly adjustments as conditions change.

Napier wrote that the dominant factor shaping the FY27 proposal is the Consent Order and Assessment issued by the Tennessee Department of Environment and Conservation (TDEC), which requires operational and capital improvements to Spring Hill's wastewater system and temporarily limits new connections. The Board accepted the order in August 2025 and imposed a development moratorium in October 2025, which Napier said will constrain growth until capacity solutions are built and proven.

To respond to the wastewater problems, Napier described a prior BOMA resolution (No. 2693) that authorized staff to pursue bonding authority of up to $320 million over time to fund the Pure Water Spring Hill program. The plan described in the memo envisions a reservoir for drought resiliency, advanced purification facilities, a pilot treatment plant and reclamation improvements; Napier said staff expects the first bond issuance to be let in fall 2026 and that each issuance will still require Board approval.

Because building activity is expected to be curtailed by the moratorium, Napier said the budget assumes sharp declines in development-derived revenues and avoids programming capital projects against those forecasts. Staff projects a roughly 63% reduction in building-permit revenue (about $1.4 million), a 67% decline in impact fees (about $2.7 million) and about a 60% drop in water and sewer development fees. Napier said the budget draws on existing fund balances where prudent and limits new capital commitments dependent on fee flows until alternative delivery or conveyance agreements can restore capacity.

Napier also highlighted other capital spending and priorities that will affect FY27. The City plans reclamation-plant assessments, a water-plant assessment, centrifuge construction at the reclamation plant, a program to address inflow-and-infiltration, and property purchases needed to enable alternative delivery options. The memo flagged significant near- and longer-term projects in the City’s 10-year plan funded in part by the 18‑75 capital fund, including design and early site work for the Community Services Annex (CSA), a library replacement project the Board prioritized, Buckner Road widening and the Jim Warren reconstruction effort; Napier recommended preserving a $25 million informal reserve to support Jim Warren work if needed.

On revenues, Napier said reappraisals in Maury and Williamson counties should increase property-tax receipts and recommended the Board adopt a resolution holding the property tax rate at $0.739 for FY27 to capture higher assessed values. He also noted the third and final year of a phased water-and-sewer rate adjustment begins July 1, 2026; those prior increases have added roughly 30% to rates in some parts of the structure and helped build Spring Hill Water’s fund balance to about $64 million.

The memo outlines organizational changes tied to the work ahead. Napier described the SPARTAN team (Strategic Project Acceleration and Resilient Technical Adaptation), a staff unit to accelerate delivery of consent-order projects, and a new eight-person Public Works construction crew funded with about $4 million in equipment. He said a conversion to a 13‑point step pay plan is budgeted with a one-time implementation cost of $1.2 million (about $1.03 million in the general fund) and an estimated ongoing maintenance cost of roughly $1 million per year; the FY27 proposal also accommodates several new or reclassified positions across Public Safety, capital projects accounting, facilities and parks but reduces the original position request to keep the budget balanced.

Napier recommended conservative forecasting for sales and other operational revenues, noting differing performance between the Maury and Williamson sides of the city and forecasting modest growth while recognizing a potential drop in interest income. He urged the Board to reexamine fee recapture goals across fee-based services (for example, Development Services and Fire Department inspection fees) and to consider whether sanitation and stormwater operations should move further toward enterprise models that more directly tie user fees to costs.

The memo closes by urging continued creative partnerships — with developers, neighboring jurisdictions, the State and landowners — to develop offsite delivery and interim conveyance solutions that could restore building activity sooner. Napier wrote that the budget is staff’s most informed estimate of the coming year’s revenues and expenditures and that quarterly amendments will likely be necessary as the city responds to the consent order, project schedules and revenue realities.

Napier respectfully submitted the budget narrative to the Board and recommended adoption following the scheduled public hearing and final reading.