Millersville reviews 2026 budget as health‑insurance and stormwater costs bite; $687,000 shortfall possible without tax change

Millersville Borough Council heard a detailed presentation of the proposed 2026 budget and related policy recommendations, with staff warning that without a millage increase the borough could face a roughly $687,000 general‑fund deficit.

Rebecca, the borough staff member who presented the budget, said the town is using a mix of line‑item, zero‑based and incremental budgeting and that the goal is a balanced budget. "We're aiming to have our anticipated revenue meet or exceed our planned expenditures," Rebecca told council during the presentation. She noted an updated earned‑income tax projection and said real‑estate tax revenue is expected to be "hopefully, 2,300,000.0" next year.

The presentation highlighted several pressures on the operating budget. Health‑insurance costs are a major driver: the borough participates in a self‑funded cooperative and staff reported a 2026 renewal increase of 12.9% and anticipated about $1,200,000 in annual claims next year. Rebecca said the cooperative structure helps smooth large claim years but that the increase is a significant budget pressure and that, per current union contract thresholds, it does not necessitate reopening bargains with represented employees.

Stormwater infrastructure and compliance with the state MS4 permit also factored prominently. Rebecca said aging storm sewers are producing expensive fixes (she cited a Valley Drive sinkhole repair estimated at $150,000) and noted that boroughs cannot unilaterally impose a stormwater fee without creating or joining an authority — a step that would itself require policy work and legal steps.

Council discussed several specific revenue and expenditure lines. Rebecca pointed to new budget lines that reflect a 50% cost share with Penn Manor School District for crossing‑guard services, and a planned annual transfer of $20,000 from a park trust (the Rudder Fund) for park maintenance. Members also asked about the borough's investment strategy after interest‑income projections in the budget packet dropped from roughly $86,000 (actual 2024) to about $63,000 (2025 estimated) and to the figure shown for 2026 in the packet; Rebecca explained staff moved some principal into higher‑yield accounts for capital funds, which raises capital‑account interest but does not directly bolster operating revenue.

Several smaller operating funds and user fees were discussed. The solid‑waste fund faces a projected deficit of just over $90,000; total collection and disposal expenses next year were estimated at about $427,000, including approximately $200,000 in disposal costs. Staff presented fee scenarios (a $10–$12 per‑household increase was modeled) and recommended aiming to clear the shortfall. The borough's tag fees (appliance and yard‑waste tags) were reviewed: staff proposed modest increases (for example, raising some tags that have not been changed since 1990) and a new $50 application fee for handicap‑parking signs to align charge with administrative cost.

Rebecca recommended a formal unreserved fund‑balance policy that would hold three months of average expenditures for the general fund, sewer operating fund and solid‑waste operating fund; the finance committee moved that policy out of committee for solicitor review. Council members asked staff to produce additional millage‑scenario visuals and reiterated the need to respect reassessment rules in 2027 (a county reassessment year that limits how much a municipality may increase tax rates without effectively increasing a taxpayer’s total burden twice in the same reassessment cycle).

Next steps: staff will model any millage number council prefers, the finance committee will reconvene in early November to recommend a number for the budget, and fee schedule changes and the unreserved fund‑balance policy are slated for final votes in December alongside the budget.