Franklin staff urge 55% stormwater fee hike to plug funding gap and build reserves

Franklin staff urge 55% stormwater fee hike to plug funding gap and build reservesFacing rising equipment and personnel costs that have outpaced revenues since 2022, Franklin City administrators are pushing for a rate adjustment to make the stormwater utility self-sustaining.

Staff recommended increasing the stormwater fee from $3.83 to $5.94 per ERU in FY2027 to achieve a 15% fund balance.

Expenditures have exceeded revenues for the past several years, requiring subsidies from the city's General Fund.

The cost drivers include rising personnel expenses and capital equipment replacements, such as vacuum trucks.

City Administrator Eric Stuckey advised against continued General Fund subsidies to avoid diverting resources from public safety and other core services.

The City of Franklin, Tennessee, is poised to significantly raise its stormwater utility fees following a cost-of-service study presented to the Board of Mayor and Aldermen on February 10, 2026. City staff recommended an aggressive rate adjustment to address a structural deficit where operational and capital expenses have consistently outpaced revenues since 2022. The stormwater fee, which has remained at $3.83 per Equivalent Residential Unit (ERU) since 2021, currently generates approximately $2.6 million annually. However, rising costs for personnel and essential equipment—specifically street sweepers and vacuum trucks—have forced the utility to rely on General Fund transfers to maintain operations. Skye Gerhart, a Management Fellow, and Michael Walters Young, the Chief Budget & Performance Officer, presented four funding scenarios to the Board. While "Option 1" proposed no changes, resulting in continued deficits, staff strongly advocated for "Option 4." This scenario would raise the monthly rate to $5.94 per ERU in FY2027—a roughly 55% increase—followed by smaller inflationary adjustments to reach $6.86 by 2031. This approach aims to make the fund self-sustaining and build a fund balance of approximately 15% of estimated expenses. "Expenditures have continually outpaced revenues since 2022," Gerhart noted, highlighting that deficits have been covered by previously accrued fund balance or transfers. City Administrator Eric Stuckey urged the Board to support the reserve-building option. "I would really urge us to look hard at Option 4," Stuckey said. "It is the most aggressive... but it also helps us make the fund more truly self-sustaining." He emphasized that continuing to subsidize the utility diverts vital resources from core General Fund services, such as police and fire protection. Several Board members expressed preliminary support for the recommendation. Vice Mayor Baggett noted that the difference between a break-even rate and the reserve-building rate was minimal in terms of cents per month, stating it seemed "silly not to go and provide some sort of balance" to work from. A final fee recommendation will be presented as part of the FY2027 annual operating budget process in May.