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Lower Merion workshop flags near-term $24.7 million financing gap for capital projects
Summary
At a June 24 CIP workshop, township staff told commissioners that projected 2027 capital needs and carryover from large 2025—'26 projects could require $24.7 million in additional financing over the next 16 months absent grant support; staff outlined options including a bank-qualified bond for roughly $10 million and a second issuance in 2027.
Lower Merion Township officials told the Board of Commissioners on June 24 that finishing major projects carried from 2025—'26 and moving into 2027 will require new borrowing unless the township scales back planned work.
Chief Financial Officer Adam Chumsky summarized the capital projects cash-flow on page 14 of the CIP packet, saying the township issued $24,000,000 of debt in February 2025 and had roughly $5,000,000 of bond proceeds remaining as of June 1. Combined township-controlled funds (including utility contributions and liquid fuels aid) totaled about $7.2 million, but committed and near-term projects could spend roughly $20 million and leave the capital projects fund with a $10—$13 million shortfall under several scenarios. "We identify between dollars $10,000,000 to $12,000,000 that...$12,000,000 or almost $13,000,000 negative figure" was one illustrative projection Adam presented.
Adam outlined options to meet the shortfall: a smaller bank-qualified issuance of about $10 million late in 2026 (to preserve preferential bank-qualified pricing), followed by another issuance in 2027 if needed; a single larger issuance; or using the general fund as short-term bridge financing under a reimbursement resolution. "If we do some combination of issuance, say $10,000,000 this year and $14,000,000 if the CIP remains at these figures, that would increase our total debt outstanding to about $102,000,000 at the end of 2027," he said.
Commissioners pressed on timing and market risk. Adam said an auction would likely occur in October or November if a year-end need materializes and cautioned that IRS arbitrage rules limit how long proceeds can be parked. "We cannot run arbitrage," Adam said, noting the township must meet statutory requirements on spend-down schedules.
Board members and staff framed the shortfall in the context of a recent multiyear spending spike: the CIP totaled $64.3 million in 2026 and $64.6 million the prior year as the township drew down ARP and other one-time funds for large projects. Several commissioners asked whether the CIP will return to pre-COVID norms; staff said costs and inflation make a full return to $10—$12 million annual capital spending unlikely and described the current packet as a post-ARP normalization rather than a permanent large increase.
Staff recommended a conservative approach: refine cash-flow projections in July with the Finance Committee and consider a limited issuance to bridge the gap if needed. The board did not vote on financing tonight; Adam said staff will bring a reimbursement resolution and financing options back for discussion in July and a draft CIP in November.
Next steps: staff will refine projections, present financing alternatives to the Finance Committee in July and return a draft CIP in November for formal consideration.
