Annapolis City Council Finance Committee Meeting on Enterprise Funds and Public Works Budget - April 28, 2026

On April 28, 2026, the Annapolis City Council Finance Committee met to discuss the enterprise funds (water/sewer, stormwater, refuse) and the Department of Public Works (DPW) budget. The meeting included presentations from Stantec consultant Dave Heider and DPW Director David Vogel, followed by extensive Q&A. Key topics included rate recommendations, fee structure changes, performance metrics, and infrastructure challenges.

Consent Calendar

• The agenda and minutes from the previous meeting were approved unanimously.

Public Comments & Testimony

• No public comments were made during the meeting.

Discussion Items

• Enterprise Funds Presentation (Dave Heider, Stantec):

  • Water and Sewer Fund: Recommended 4.75% rate increase for FY27 and future years. The fund is projected to exhaust cash by 2030 or 2031 if spending continues as planned, but delays in capital execution typically push that out. Current typical residential quarterly bill for water/sewer (12,000 gallons) is ~$190; with the increase, it would rise to ~$199 (+$9.10/quarter). Water losses have been reduced by 20-30% over five years.
  • Stormwater Fund: Recommended 15% increase for FY27, followed by 7% increases through 2030. The tree program ($515,000 in FY27) accounts for ~20% of stormwater operating expenses. The city proposes transitioning non-residential properties from tier-based fees to charges based on actual measured impervious area (ERUs), effective January 1, 2027, with a six-month grace period. About 23% of non-residential properties would see a bill reduction, while others would see increases (e.g., 11 properties would see over $2,000 increase). A stormwater fee reduction program for on-site management is planned.
  • Refuse Fund: Recommended 7.5% increase for FY27, with 5% increases in future years. The new 10-year collection contract (7-year base) began in FY27, leading to a ~30% increase in contract costs over three years. The typical annual refuse fee would rise from $431 to $463. Council discussed the contractor's performance, including trash left in streets and the need for better enforcement. DPW noted that the contractor has a new technology (cameras) and will face financial penalties for poor service.
  • Combined Impact: Total residential quarterly bill increase of $22 (water/sewer $9, stormwater $5, refuse $8).

• Department of Public Works Presentation (Director David Vogel):

  • Accomplishments: Progress on City Dock project, stormwater fee adjustment, traffic safety studies, and consolidation of fire hydrant data.
  • Performance Metrics: Proposed changes to metrics (e.g., pothole response target of 80% within a week, hydrant testing on a two-year cycle). DPW acknowledged they are not keeping up with infrastructure condition (e.g., roads, sewers) but are treading water. The asset management program is improving.
  • Budget Highlights: Salaries and benefits show a significant increase due to mapping corrections (positions misallocated to general fund). Engineering construction contract services decreased to $135,000, limiting agility. Snow removal budget was $170,000, but actual spending was ~$800,000; a fund transfer will be requested in Q4. Council discussed the need for emergency procurement authorities for snow and other crises.
  • Street Sweeping: Currently limited by personnel and lack of scheduling. DPW is exploring software to improve route planning, which could enable better communication to residents. Alderman O'Neal and Alderman Huntley supported a pilot program with parking restrictions.
  • Sidewalks: Staffing is a constraint; DPW is hiring another engineer. Additional capital funding could be used once staffing is fully staffed.
  • Water and Sewer Capital: The water plant operating system update (software) and vertical assessment of sewage pump stations are ongoing.

Key Outcomes

• The committee discussed but did not vote on the rate recommendations; they will be considered as part of the FY27 budget adoption. The Enterprise Fund Study will be used to inform rate setting.
• The proposed stormwater fee structure change for non-residential properties (from tiers to measured impervious area) received broad support, with the condition that a strong communication plan be implemented. The city attorney will review the legality of a progressive rate structure.
• DPW will work with council members to explore a pilot street sweeping program with signage and parking restrictions, likely in Ward 8.
• The committee noted the need for a more formal process for emergency spending (e.g., snow removal) and a discussion on financial controls for the city manager.
• The committee requested a future update on the trash contract performance and the food waste composting program.