Lititz Borough accepts rate study recommending 2.5% biennial increases; water fund faces long-term shortfall

Lititz Borough Council on Jan. 7 accepted a 2025 water and sewer rate study that recommends adopting 2.5% rate increases every other year starting in 2026 and moving to a two‑year cycle for rate studies to improve long-term financial planning.

The study, presented by borough finance lead Rob, reported about $2,800,000 in sewer debt scheduled to be paid off in 2030 and a decline in sewer fund balance from $3.9 million in 2024 to $3.6 million in 2026. Rob said, “the study recommends implementing a 2.5% increase every other year starting in 2026.” For customers, the study estimated the average residential quarterly sewer bill would rise from roughly $122 to $125 and the average quarterly water bill from $42 to $43.

Council and staff stressed the proposal is intended to smooth future rate shocks and protect reserves. Rob told council the borough prepared a 10‑year capital plan during the last budget season to align projected capital spending with rate planning. He also warned that, even with the proposed increases, the water fund’s reserves are projected to be exhausted by 2032, meaning “we'll have to take further action, down the road.”

Council members voiced concern for residents on fixed incomes and supported gradual, predictable increases as less harmful than larger one‑time hikes. A council member noted actual capital spending often comes in below budgeted estimates, which can moderate the worst projections.

Council moved and voted to accept the rate study; members clarified that a separate motion to advertise the specific rate changes will be taken up later in the agenda and that the borough plans to repeat the rate study on alternate odd‑numbered years and to consider rate changes on even‑numbered years.

Next steps: staff will prepare advertising language and formal ordinance language for any proposed rate changes and bring that to council for public hearings and formal adoption.