2025 Sewer Fund Budget Comments ] Highlights Draft 10/21/2024  Budget Expenses  1. Personnel costs change as follows:  a. Wages  Eliminated. Assistant to the Manager position. ii. Wages increase 5% per CBA; $ 1.25 per hour  ili. 5th Public Works employee which remains unfilled, but we actively recruiting. iv. Net Impact for Borough is $ 46,034 reduction in budgeted payroll  b. Cost for healthcare insurance  increased by 9.2% for 2025. ii. Renewal History 1. 2023 increase 2.90% 2. 2024 increase 7.40% 3. 2025 increase 9.2% 2. Inflation  ii. Cost Drivers  1. Medical costs trending at 9% annually Minimal Municipal Obligation (MMO) 1. Offset by State contribution to pensions a. $88,081.77 for 2024  Pension Plans Police and Teamsters  ii. Increases to the MMO 1. 2023$ 97,103  2. 2024.$188,712 (increase $ 91,609) 3. 2025 $ 205,577 (increase $15,865) 1. Uniformed Pension-added COLA to CBA 2.  Uniformed and Non-Uniformed Pension a. 2022 Investment losses  lii. Basis fori increases  iv. Net $15,865 increase for 2025 a. 2025 Vs 2024 an increase of $ 11,849 3. New Tools & Small Equipment Purchases a. $32,140 Vs 19,289 in 2024  2. Vehicle Maintenance  Tires  b. Increase due to two primary pieces of equipment 7 Tar buggy $ 7000 (carry over from 2024) ii. Grapple Bucket for skid steer $7000  4. Projects  a. One new project was added for 20251 totaling $ 110,000  Sewer Lining project 1. CDBG Grant of$7 75,000  ii. Borough Match $ 35,000 from Sewer Debt Service account  Page 1 of5    2025 Sewer Fund Budget Comments I Highlights Draft 10/21/2024  5. 2025 Budget transfer to Capital Account is $131,042 to cover ongoing set asides fore equipment  and projects. Budget Revenue  2016 through 2024 Background-Revenue 6. Revenue is dependent on metered sales.  a. Metered Rates have not been adjusted since 2017.  Debt Service Fee established $ 258 pery year  ii. Fixed rate fee was reduced in 2017 reducing operational revenue by $ 100,152 1. Revenue decreases accumulated effect over: several years. b. One-time revenues such as interest earnings and connection fees have masked the . Implementation of the Debt service fees have masked the underlying Sewer Fund 7. Revenue from sewer metered sales is budgeted to approximately the: same as in: 2024,  revenue versus expenses. scenarios.  performance.  a. Some growth is anticipated for 2025 but it will be marginal. C. Fields at Brookside submitted 35 building permits for 2024. d. Acouple of minor developments are in the planning stage for 2025.  b. Carwash at Main Street Commons has been given the approval to begin operations.  An additional 31 permits willl be submitted in 2025. This will contribute to revenue across permits, tie in fees etc. 2024 collected $111,681 vs $ 417,248.36 in 2023 interest Income is projected to continue at same levels in 2025 g. Sewer Alocation/Connection fees $ 81,774 will continue through 2025  e, Debt Service Billing ended in 1Q2024  - likely soften in 2026  disappear in 2026 with the completion of Fields at Brookside.  8. Revenue versus Expenses 2016 through 2024 Background-Expenses  2024 bdgt 2025 bdget  2019  2025 Vs 2019  2016 2025 vs 2016  Expenses net of capital $ 695,050 $ 721,604 $ 388,015 $ 308,589 $ 364,633 $ 331,971  Expenses have increased since 2016 between $ 300,000 and $400,000 without an adjustment in metered rates. The expenses increase is across all categories of expenses. (see detail handout) The financial impact is compounded by the cut int fixed metered revenue in 2017. Expenses are exceeding revenue an average of $ 216,000 to $241,00 per year for the past two years  based solely on sewer metered revenue.  Page 2of5    2025 Sewer Fund Budget Comments I Highlights Draft 10/21/2024  2024 bdgt 2025 bdget  Revenue $ 478,981 $ 480,390  Expenses net ofcapital $ 695,050 $ 721,604 Revenue less Expenses $ (216.069) $ (241.213)  Expenses exceed revenue an average of $ 55,000 per year for the past two years ifa all one-time revenue  sources are included:  2024 bdgt 2025 bdget  Revenuel $ 652,108 $ 652,164  Expenses net of capital $ 695,050 $ 721,604 Revenue less Expenses $ (42,942) $ (69,439)  9. Expense Drivers  a. Cost allocation shifting expenses from General Fund to! Sewer Fund  F Personnel costs are increasing by an average of 6.5% per year  i. Inflation driving equipment costs etc. . - Averaging 9% v/yi increases over past 5 years ii. 2025 increase is 10.729/$27,643  b. Lehigh County Authority billing rates  Sewer Fund Revenue versus LCA Fees  LCA fees 40.11%  SF Meter Rev  NetSF SFC Change SFC Change LCA Fee VS LCAI Fee as %SF  LCAFees Revenue vsp prior$$ VsP Prior% prior$$ vs Prior %Rev(act)  2021 $4 447,330 $ 179,403 $ 267,927  2022 $ 429,139 $ 214,726 $ 214,413 $ (53,514) -12.47% $ 35,323 19.69% 50,04% 2023 $ 428,260 $ 254,008 $ 174,252 $ (40,161) -9.38% $ 39,281 18.29% 59.31% 2024 $ 425,449 $ 257,765 $ 167,684 $ (6,568) -1.54% $ 3,758 1.48% 60,59% 2025 $ 425,449 $ 285,408 $ 140,041 $ (27,643) -6.50% $ 27,643 10.72% 67.08%  Total 5yr $2,155,627 $1,191,310  $ (127,886) -5.93% $ 106,005 8.90% 55.27%  lii. Increases are associated with:  1. Operating costs & 5-year capital plan for WLI & LLRI-PH1 upgrades  Page 3 of5    2025 Sewer Fund Budget Comments I Highlights Draft 10/21/2024  Sewer Fund Revenue  Sewer Fund Revenue 499 $  Interest 341000 341,02 341.03 341.04 341.05 InterestTotal Income 364.110 364.120 364.125 364.130 364.900 Opl IncomeTotal 355005 365000 Total Income  2021Act 2022Act 2023Act 2024tyd Est 2025 Bdgt  Sewer Fund Int Sewer Debt Svc Inc Sewer Gen Bondi int Sewer Capital PLGIT Sewer Capital NT  $  802 $  $  $  $ 47,831 $ 90,346 $ 90,346 $ 4,076 $ (18,176) $ $ 5,407 $ 5,920 $ 5,920 $ 3,227 $ 35,051 $ 35,051 802 $ 60,541 $ 113,141 $ 131,317 2022Act 2023Act 2024tyd Est 2025 Est  $ 499 $ 2021 Act  Connect Tap Fee $ 27,258 $ 42,126 $ 9,852 $ 73,340 $ 81,744 Sewer Use Charge $ 447,330 $ 429,139 $ 428,260 $ 430,000 $ 456,957  $  765 $  $  Debt Svc Fee Lat Insp Fee Pension State Aid  $ 438,597 $ 420,467 $ 417,248 $ 111,368 $ $ 913,184 $ 892,932 $ 859,036 $ 616,898 $ 540,891  $ 1,200 $ 2,911 $ 2,190 $ 2,190 $ 7,386 $ 6,687 $ 8,389 $ 8,389  Healt Ins Co-pay $ 1,766 $ 6,901 $ 14,432 $ 15,336 $ 15,045  $ 915,449 $ 908,021 $ 880,155 $ 640,622 $ 564,325  Less Debt SvcF Fee Net Revenue $ 476,852 $ 487,554 $ 462,907 $ 529,255 $ 564,325 Less 1x/Debt Svc Net Revenue $ 449,594 $ 445,428 $ 453,055 $ 455,915 $ 482,581  Sewer Fund Balances  Sewer Fund Debt Service X8542  10/14/24 update x2981 x1332 X8534  X8568  Total  payoff Avallable  Bank Bank 0  CD-9  CD-13 CD-13unused Balance SFPortion 2028  Current Balancel $ 1,652_ 1,070 $ 51,079 $ 1,060,069 $ 686,712 ($ 1,797,859 $ 1,353,150 $444,709.37  Interest  0  4,781 $ 51,927 $ 33,638 $ 90,346  Sewer Fund-Cash and Sewer Fund Capital Interest  10/14/2024 X6228 Updated Interest $  X6252 SFCapital Capital Bank $  X8592 CD-9  X8509 Capital  x1064304 PLGIT  SF Bank  Capital  CD-13-8609 MoneyMarket Total  $ 63,623 $ 51,919 $ 211,689 $ 554,521 $ 116,391 $ 882,601  $ 10,099 $ 24,953 $ 5,920 $ 40,971  Page 4 of 5    2025 Sewer Fund Budget Comments I Highlights Draft 10/21/2024  10. Sewer Fund Metered Rates Potential Rate Scenarios  Scenario #1  a. Metered Rates need to be adjusted to meet current operational requirements. b. Rates will need to be recalculated annually based on operational-actual increases: as Allo one-time revenue sources and interest earned across the sewer fund capital and debt  Adjustment to be determined.  noted above.  service accounts are allocated to the Sewer Fund operation budget.  Scenario #2  d. Utilize excess reserves in the Sewer Debt Service Fund and the Sewer Capital fund over the next 3- 4 years to allow rate increases to stabilize the operational fund. e. Institute a surcharge fee allocating equal to the revenue shortfall to generate an  Scenario #3  additional $ 250,000 pery year in operating income.  Page 5 of5 5    2024 Budget Sewer Fund Revenue  2025 Sewer Fund Revenues  $  110,361 2024 Budget 2025 Budget  08.341.000 Interest Income  91353  90000  08.351.008 PA Small Water & Sewer Grant In 2016 the Borough  was awarded a grant toj perform CIPPL work on the  sewer systems.  08.355.005 Pension Funding - State Aid-  $  6,688 $  8,389  The Borough receives funding from the State to defray the non-uniform pension fund. The sewer fund portion  ofthis funding is  08.362.080 Sewer Miscellaneous  $  $  08.364.009 Debt Service Billing The sewer billing rate the debt  service capital loan is $258 annually billed at $64.50/qtr.  $  $  08.364.010 Meter Rate Services to Customers-  $ 456,957 $ 456,957  Metered Base Rate/billing unit = $28.33/qtr Metered Flow. Rate = $3.54/1,000 gals. Non-metered base rate - $28.33/qtr.  Non-metered flow rate = $3.54/1,000 based on 200 gpd  usage  08.364.012 Sewer Allocations -  $  81,774 $  81,774  The Borough charges $2,478 per EDU to connect to the sewer system. These charges are deposited into the capital improvement account. It is anticipated this  revenue will be  08.365.000 Health Insurance Co-Pay/Dividend-  $  15,336 $  15,045  Employees are: required to contribute toward annual health insurance premium through a pre-taxed payroll deduction. Also, should thel Borough's annual payments tol Benecon exceed the expenditures, the Borough  receives an annual dividend.  08.392.001 Capital Loan Funds  $  $  Totals Revenues:  $ 652,108 $ 652,164  Page 1  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 2024) Budget 2025 Budget  08.429.121 Borough Manager's Salary-  $ 44,419 $  43,750  Thel Borough Manager's salary is split equally between the general, water and sewer funds. The sewer fund portion is  08.429.122 Public Works Supervisor's Salary-  $  23,394 $  24,565  Thel Public Works Supervisor's wages are split equally between the general, water and sewer funds. The: sewer: fund portion is  08.429.130 Administrative Assistant's Salary-  $  15,713 $  17,299  The Administrative Assistant's wages are split equally between the general, water and sewer funds. The: sewer fund portion is  08.429.131 Borough Clerk/Assistant Treasurer's Salary-  $  15,391 $  14,907  The Borough Clerk/Assistant Treasurer's wages are split equally between the general, water and sewer funds. The sewer fund portion  is  08.429.13X Assistant to Manager-  $  15,713 $  The Assistant to Manager's wages are split equally between the general, water and sewer funds. The sewer fund portion is  08.429.140 Wages Public Works current (3)-+(I) new 08.429.153 Long Term Disability Insurance-  $ $  75,695 $ 79,140 415 $  500  The Borough provides long-term disability insurance to all full time employees. This premium is split between the general, water and sewer funds, The sewer fund portion oft this premium willl be  08.429.154 Short Term Disability Insurance  $  515 $  600  Page 1  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 20241 Budget 2025 Budget  The Borough provides short-term disability insurance toalli full time employees. This premium is split between the general, water and sewer funds. The sewer fund portion of this premium will be  08.429.156 Health Benefits- 08.429.158 Life Insurance-  $ 83,445 $  80,478 500  The sewer fund portion is estimated to be  $  325 $  $80,000. Life Insurance Policy to all full-time employees. The sewer  fund portion is  01.406.159 Pension - Defined Contribution  $  1,250 $  1,733  The Borough'si non-uniform pension plan requires the employees to contribute 3% oft their pay to the plan, with thel Borough obligated to contribute thei remaining balance, according tot the actuarial report. With the State. Aid thel Borough's minimum municipal obligation will  be  01.406.160 Pension -] Defined Benefit  $  12,068 $ 10,704  The Borough'si non-uniform pension plan requires the employees to contribute 5% oft their pay to the plan, with the Borough obligated to contribute the remaining balance, according tot the actuarial report. With the State Aid thel Borough'si minimum municipal obligation will  be  08.429.161 F.I.C.A.-  $ $  15,095 $ 1,140 $  14,282 1,045  Social Security taxes for the sewer fund will be  08.429.162 Unemployment Compensation-  The Borough uses the services ofl Interstate Tax Service Bureau for unemployment compensation. This fee is estimated at  08.429.181 Wellness Incentive -  $  $  Page 2  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 2024 Budget 2025 Budget  Annually, thel Borough will pay the Teamster's employees $15 (nonunion employees $10) per day for any unused sick day that year over the accumulated amount of70 days. In addition, upon retirement, after a minimum of20 years of service, the Borough will pay $50 per day for his/her accumulated sick days. This expense is split between w/s/g funds. The: sewer fund portion is  08.429.141 Part-time Wages 08.429.183 Overtime Wages  $ $ $  $ 2,500 $ 400 $  2,500 500  08.429.196 Health Reimbursement Account  The Borough reimburses the employee for the first 50% oft the health  insurance deductible.  08.429.197 Transitional Reinsurance Fee-  $  $  The Department of Health and Human Services (HHS) has indicated that in 2014 and continuing through 2016, each employe group will be assessed a' Transitional Reinsurance Fee. This fee was designed to be transferred tol health insurance companies to offset their costs for enrolling all individuals no matter oft their health condition. For 2016 the fee willl be $27 per covered life on the Borough's plan. The estimated transitional reinsurance fee due in 2017 is  08.429.198 PCOR Fee  $  4 $  35  The Borough is required to pay a Patient-Centered Outcome Resource Fee for the average number of covered lives for the plan year. This amount increased to a $2 multiplier in 2013. Full payment is due annually by. July 31st ofthe following. year. This fee  iss split G/W/S.  08.429.210 Office Supplies  $  500 $  2,313  Paper, envelopes, pens, staples, paper clips, etc, are estimated to cost  Page 3  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $ staff  110,361 2024) Budget 2025 Budget  08.429.213 Small Items of] Equipment The sewer portion of a new computer for  $ $ $  2,500 $ 500 $ 2,000 $  2,650 500 2,257  08.429.220 Operating Supplies - 08.429.230 Heating Expense - Shop  The cost to heat the garage is split between the water (50%) and sewer (50%) funds. The sewer fund portion is estimated to be  08.429.231 Vehicle Fuel -  $  4,791 $  4,916  To purchase fuel fort trucks 3,5 and 1/3 of the backhoe will cost  08.429.236 Housekeeping Supplies- -  $  500 $  500  Toilet paper, paper towels, cleaning supplies, light bulbs, etc. are  estimated to cost  08.429.238 Uniforms  $  2,200 $  2,200  The Borough provides uniforms and $150 towards safety shoes for  each employee.  08.429.245 Street Patching Material- 08.429.249 Petty Cash  $ $ $  $ $ 9,943 $  08.429.250 Maintenance/Repairs Parts-  7,655  Toj purchase parts for maintenance and repairs of the Borough vehicles and equipment is estimated to cost Small Tools and Minor Equipment The purchase and maintenance on small tools and equipment  08.429.260 08.429.311 Auditing  $ $ $  3,733 $ 10,713 10,293 $ 14,000 $  10,804 14,000  The sewer fund portion oft the audit will be  08.429.313 Engineering Expenses-  Page 4  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 2024 Budget 2025 Budget  Engineering services are provided by Barry Isett & Associates. The  sewer fund engineering costs are estimated at The sewer fund legal costs are estimated to be  08.429.314 Legal Expenses- 08.429.321 Telephone-  $ $  1,000 $ 500 $  1,000 500  1/3 ofti thet telephone bills for Borough Hall and the Borough garage is taken from the sewer: fund. This expense is estimated to be  08.429.325 Postage 08.429.341 Advertising 08.429.342 Printing- -  $ $ $ $  1,200 $ 200 $ 300 $ 4,992 $  1,950 200 300 6,245  The cost of mailing the sewer bills should be The cost to advertise for bids is estimated to be  The cost for printing will be  08.429.351 Commercial Insurance Policy-  This policy includes property, general liability, automobile, inland marine and public officials' liability coverage. This expense is split between the general, police, water and sewer: funds. The sewer fund  portion is  08.429.353 Bonding  $  325 $  300  The bonding charges for the Borough Manager and Assistant Treasurer are split between general, water and sewer funds. The  sewer fund portion is  08.429.354 Workers Compensation  $  4,448 $  5,735  The sewer fund pays aj portion of the total premium on this insurance, which compensates the Borough employees for occupational injuries and diseases as outlined in the workers compensation act. The  estimated cost will be  08.429.361 Electricity-  $  1,750 $  2,389  Page 5  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 20241 Budget 2025 Budget  Electric for Borough Hall is split 1/3 police, 1/3 general and 1/3  sewer. The sewer fund portion is  08.429.364 Transmission & Treatment -  $ 258,076 $ 285,408  The Borough pays Lehigh County Authority for transmitting wastewater through their lines to the Allentown plant for treatment.  08.429.373 Garage Maintenance- 08.429.374 Maintenance and Repair Services  $ $  5,025 $ 2,332 $  1,650 2,832  To have the Borough vehicles (trucks 3, 5,and 1/3 backhoe) and machinery repaired by an outside garage may cost  08.429.384 Machinery/Fquipment Rental-  $  500 $  2,000  Should the Borough need to rent equipment or machinery to perform specialized maintenance or repairs or to substitute for broken down  equipment, the amount budgeted is  08.429.420 Dues/Slbseriptions- 08.429.450 Service Contracts-  $ $  $ 7,207 $  11,149  Contracts for computers, copier, public notification system and  benefits programs will cost approximately  08.429.451 Traffic Control To contract traffic control services, the sewer  portion will be  $ $  3,500 $ 250 $  3,500 400  08.429.460 Seminars/Tmining-  Toj pay for the staff to attend seminars and required training  programs, it will cost approximately  08.429.480 Miscellaneous Expenses 08.429.720 Inflow and Infiltration- -  $ $  20,000 $ 20,000 25,000 $ 25,000  FRS Bookkeeping  Page 6  2025 Budget Draft 09172024-1    2024 Budget Sewer Fund Expenditures  2025 Sewer Fund Expenditures  $  110,361 2024) Budget 2025 Budget  08.430.740 Machinery and Equipment the sewer portion oft the al Ferris mower  will cost $ 3000.00 and is allocated under Transfer to Sewer Capital  Fund (08.492.008) Capital Expenditures:  08.430.750 Capital Improvement Project Expense  For continue upgrades to sewer system - CIPPL Lining and manhole rehabilitation are completed. Lateral Cleanout Installation and Lateral Lining still remain. See Sewer Fund Capital Account for General Obligation Note Series 2021, New Sewer Loan Fund of$ 2.3M plus Refunding of $575,000 G.O. Note Series 2013. Interest is payable semi-annually every. January 15th and July 15th beginning July 15,2021 and principal payable every July 15th beginning July 15, 2021 in accordance with the debt service schedule. The General Fund portion is to payofft the $5 575,000 refinancing G.O. Note Series 2013. See G.O. Note Series 2021 for General Obligation Note Series 2021, New Sewer) Loan Fund ofs 2.3M plus Refunding of $575,000 G.O. Note Series 2013-Interest $  details.  08.481.100  $  $  details  08.481.110  $  08.492.008 Transfer to Sewer Capital Fund =  $  96,072 $ 131,042 2024 bdgt 2025 bdget  Total Expenses incl Capital $ 791,122 $ 852,646 Expenses net of capital $ 695,050 $ 721,604 Revenue less Expenses_ $ (42,942) $ (69,439)  Revenue $ 652,108 $ 652,164  Page 7  2025 Budget Draft 09172024-1