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Lock Haven staff warn water fund shortfall as PUC mediation reduces expected rate relief
Summary
City staff told council PUC mediation likely reduces the city’s requested rate increase by about 42%, leaving the water fund roughly $182,000 short in 2025 and delaying repayment of an interfund loan; staff outlined cuts and operational impacts.
Lock Haven — During the public hearing on the draft 2025 budget, city staff told council that mediation with the Public Utility Commission (PUC) was likely to leave the city with substantially less rate relief than requested and that the water fund faces a multi‑hundred‑thousand‑dollar shortfall.
The city’s preliminary budget materials show the major funds combined at about $13.6 million. A presenter summarized the water‑fund outlook, saying mediation "perhaps will settle for about 42% less than the city's initial request," which will phase in any revenue gains and postpone repayment of a $500,000 interfund loan. The presenter said the water fund will not be able to begin repaying that loan until 2026 and that, after cuts, the water fund still shows an approximate shortfall of $182,000 for next year.
Staff described specific constraints and cuts: compensation costs that formerly sat in the water fund must be moved to the general fund; hydrant expense was reduced to a line item small enough to allow only repairs (staff said the budget shows roughly $1,200 available for hydrant repairs, not replacements); and meter and line‑replacement transfers were pared back. City staff said the preliminary figures assume phased PUC adjustments and that the first full month to reflect any agreed rate increase would likely be June of the following year.
Councilors pressed for more detail on cost‑share arrangements, the timing of design projects tied to dams and the sequencing of capital work. The water‑department presentation included operational accomplishments (service‑line inspections, updated meter radios and new leak‑detection equipment) and a list of outstanding capital needs (including hydrants and large projects estimated in the tens of millions for dam work). Staff emphasized the limited "wiggle room" in the fund and warned further choices will be required if the PUC settlement does not allow larger rate increases.
Next steps: council scheduled additional budget sessions and advised staff to return with more refined projections and options for closing the water‑fund gap.
