Borough reports stronger finances, council to begin formal capital reserve planning

The borough’s finance staff reported the municipality is in a stronger fiscal position and can begin setting aside funds for future capital purchases.

At the July work session, the staff member responsible for finance said recent cash-flow analysis and several unanticipated receipts — including about $30,000 from NTSA and an additional $44,000 offered for severe-weather response — have improved the borough’s general fund and highway fund balances. “Financially, things look very good,” the staff member said.

Council members and staff discussed moving from a pay-as-you-go approach to a formal capital reserve. One committee member noted large equipment purchases — for example, rotating a fire truck at an estimated $265,000 — require advance planning and a multi-year schedule so the borough can smooth annual budgets and avoid one-time spikes.

Staff described a plan to ladder short-term investments (term accounts and certificates of deposit with staggered maturities) to preserve liquidity while earning higher rates; representatives said they are targeting term accounts that allow 30–120 day maturities and expect current yields just over 4 percent. The staff member said the borough will balance cash needs against early-withdrawal penalties and will seek flexible terms if banks will waive fees to enable a laddering strategy.

Council members urged caution despite the improved balance sheet. A committee member said the recent tax increase helps future years but “this doesn’t magically solve everything,” and noted the borough will continue seeking grants and low-interest loans for MS4 stormwater work.

The staff member said the borough did not include a five-year capital plan in last year’s budget but will prepare one now that funds are available. Next steps: staff will draft a capital plan and present projections for vehicle and equipment replacement at an upcoming work session.