Lititz Borough finance committee reports midyear revenues ahead but capital gap remains

The Lititz Borough finance committee reported to council on July 29 that year-to-date general-fund revenue is ahead of projections but that most receipts (taxes, transfers and interfund activity) have already been realized, leaving limited cash available for new capital projects.

Finance committee member Tenea Carpenter and managing director Rob (last name on file) presented the midyear review and debt summary. Carpenter said the report covers revenue and expenses through July 1, 2025, and noted that many line-item revenues will not materially change for the rest of the year. "The majority of the revenue for the year has already been received," she said, listing taxes, transfers and interfund transfers as the primary drivers.

The committee emphasized why that matters: using 2025 numbers as an example, the borough started the year with about $3.6 million in carryover. If council uses the committee's 2026 budgeting example (projected revenue $8.7 million and projected expenses $9.75 million), the calculation leaves roughly $162,000 available for general-fund capital after reserving a 25 percent fund balance goal.

Rob gave an overview of the borough's outstanding long-term debt, describing three principal debt instruments: a 2010 note (sewer fund, matures ~2030), a 2020 note (general fund expenditures, matures ~2040) and a 2023 general-obligation bond used for rail-related and stormwater work. He said the 2023 GO bond includes a reimbursement provision that could repay 50 percent of eligible costs up to $1.5 million, but that timing of reimbursements and audits is uncertain and likely to stretch into 2026.

Committee members described a new capital-scorecard process. Managers submitted 13 general-fund capital requests totaling about $820,000 across multiple years; capital requests include HVAC controls, dump trucks, police vehicles, a mower and a snowblower. The committee recommended council review and prioritize the list during fall budget deliberations because the available cash under the committee’s example is much smaller than the requests.

Carpenter and Rob also described an expense-reduction exercise of department-level cuts that produced roughly $18,000 in potential savings; both presenters and several residents said that amount is small relative to the gap. Resident David Carson pressed council to address multi-year deficits and asked whether cuts, fee increases or tax changes will be considered during budget season. "Those are real numbers that we need to address," Carson said.

No formal votes were required on the midyear presentation. The finance committee said it will return in August and September with capital-management suggestions and funding options for council consideration as the 2026 budget is developed. The committee also noted draft fund-balance policies for the water and sewer funds and that more details are available in the borough's 2024 audit posted online.

Why this matters: The midyear review shows the borough is tracking to budget on core revenues and expenses but faces a multi-year capital funding shortfall. Council must prioritize capital requests or identify new funding to avoid depleting the fund balance beyond policy targets.

What’s next: The finance committee will present capital strategy recommendations in August and September; a preliminary 2026 draft budget will be produced in October with public presentation November 12 and final vote expected Dec. 23.