Staff says depreciation, grants and customer growth shape water and sewer finances

Finance staff outlined how the water and sewer enterprise accounts separate operating expenditures from depreciation and capital expenditures and cautioned that depreciation can make funds appear to be in deficit even when day-to-day operations are covered. One assembly member observed that depreciation makes the water fund look roughly $486,000 worse in some years; staff said that is a correct accounting effect but reiterated the borough expects to continue receiving state and federal grants to cover capital projects.

Staff said the small-tracks water-main extension begins May 29; stub-outs will be installed as construction starts and residents should be able to connect in the fall once on-site work is complete. The borough has secured several favorable Department of Environmental Conservation (DEC) grants to support water and sewer infrastructure and described a wastewater treatment plant upgrade financed through grant and loan components, and a sludge-containment slab included in the CIP.

The assembly also discussed the sewer fund paying off a 1993 bond in FY26, which staff said will reduce future operating expenses. Members asked for clearer year-by-year projections showing operating results both with and without depreciation and for a summary of grant assumptions the budget uses.

No rate change was adopted at the workshop; staff said alternatives include raising rates aggressively to cover depreciation or continuing to rely on grant funding while expanding customer count to spread capital costs.