The Metropolitan Sewer District of Greater Cincinnati will need to raise revenue next year, its leaders say — but most people likely won't see that on their bills.
"Residential customers won't see any increase, and they might see a slight decrease," MSD Director Diana Christy told Cincinnati City Council's Budget and Finance Committee Monday.
MSD will present Hamilton County commissioners with its 2026 budget Tuesday. The spending plan includes about $226 million in operating expenses — a 6.3% increase over this year. It's also seeking a $153.6 million capital budget. Last year's $786.8 million capital budget was an outlier, with lots of big projects. But 2022-2024's capital budgets were $10 million to $13 million lower than next year's request.
Much of that increase comes from rising construction, energy and maintenance costs, Christy says. It also includes roughly $37 million in planning and construction related to reducing combined sewer overflow as part of upholding the federal consent decree MSD is under. It also includes critical repairs and maintenance. Construction is slated to start on seven major sewer replacement projects across the county in 2026, for example.
Overall, MSD is seeking approval to raise rates by 4.5% in 2026. But it also wants to change the way it charges ratepayers. Under its current billing formula, volume of sewage usage is 25% of the formula by which ratepayers are billed. Under the 2026 budget, that will rise to 57%. That will benefit residential ratepayers and others who aren't responsible for a large volume of waste and groundwater.
The change is an alternative to a more substantial adjustment to the way MSD bills that some community and environmental groups have advocated for. That proposal, called "The Wet Weather Impervious Surface Charge," would effectively bill landowners based on how much impervious surface their properties have. (An "impervious surface" is a hard ground cover that water cannot seep into, such as a concrete sidewalk or asphalt parking lot.)
Groups like Communities United for Action and the Sierra Club Miami Group have advocated for this change. They say it could save residential customers as much as 35% on their bills by shifting the burden onto landowners who generate a lot of volume for MSD via stormwater runoff.
Sierra Club Executive Committee Member Larry Falkin says the county hasn't provided business groups enough clarity around things like an impervious surface reduction incentive to win their buy-in.
"I think the community groups and the business community are on the same page in saying, 'We want MSD to finish the design process and then we can weigh in on it,' " he said.
Christy told Council Wednesday that idea studied by a consultant Hamilton County hired had some issues. For one, MSD is primarily a wastewater agency, and some places in the district have separate groundwater management agencies. It's unclear how billing would work in those places, Christy said.
"Yes, it did present some more significant reductions for residential customers and higher charges for commercial and industrial; however, there were other challenges and lack of consensus to move forward," she said.
Falkin said the more modest fee adjustment MSD is proposing in its budget won't provide the same equity an impervious surface fee would. But, he said, it's a start.
"It is definitely a move in the right direction," he said. "It's a small win for residents."
Christy said the impervious surface fee isn't entirely dead yet. She said MSD wants to present a more limited pilot program to the county in the first quarter of next year that would bill specific landowners — potentially the top 100 in terms of impervious surfaces — for the runoff they produce.
"We're looking at this alternative pilot program as a way to still look at whether all customers are paying what they should be," she said.
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