North Wales starting talks on 2026 budget

 The budget picture for 2026 in North Wales Borough is coming into focus, and the council will have big decisions ahead.

Council members saw a preview of that budget last week, going line by line through the town’s projected revenues, expenses, and specific areas that will need further discussion in November.

“This helps us look at our revenue trends, our expense trends, and some of our other funds such as our capital improvement, capital equipment, and where we receive grant dollars,” said borough Manager Christine Hart.

Each year, staff start internal talks with department heads in the fall, develop a preliminary budget for council and public vetting and input in October, then vote in November to advertise that budget, and adopt it in December ahead of the new year.

In late 2023 council approved a $9.4 million budget for 2024, with a one-mill tax increase, yielding a tax bill just over $907 or $75 a month for the town’s average resident with a property assessed at just over $129,000; the 2025 budget kept those tax levels and balanced revenues and expenses at roughly $8.6 million due to a reduction in grant-funded work from the year before.

During the Oct. 14 meeting, Hart kicked off that process, detailing the town’s revenue projections first, all starting with a number set by the county: the total assessed valuation of all properties located in the borough, calculated at just over $157 million as of Sept. 30.               

“That is what the (county) board of assessments has valued the parcels within our community to be worth, and that is what we are levying the taxes upon,” Hart said.

“We’re an older community, we’re very small, so our infrastructure may not be assessed as high as some other municipalities, that have seen the building booms of the 2000s, or the McMansions in the ’90s. We were pretty much built out in the mid-’60s,” she said.

That total assessed valuation number can fluctuate slightly year to year, the manager said, based on property sales, additions that increase a property’s value, or decreases, such as when a house fire reduces the value of a property or certain tax exemptions are granted, such as for disabled veterans. In preparing a draft 2026 budget, staff start with that total assessment value, multiply the town’s millage rate of 7.0 mills, then divide the allocation of that millage to various categories.

“Of that 7.0 mills, it’s divided into calculations for each (fund): we have general operating, our streetlight fund, library tax, fire tax, and we have a highway improvement tax,” Hart said.

Real estate tax revenue in 2023 totaled just over $672,000, then climbed to just over $789,000 in 2024, was budgeted to reach $813,000 for 2025, and year to date so far has totaled $769,000, the manager told council, with the 2026 budgeted figure at just over $814,000, all based on the latest assessed value figure. Real estate transfer taxes added up to just under $99,000 in 2023 and just under $94,000 in 2024, but so far in 2025 are tracking well below that pace, with only $43,000 secured year to date and a projected $55,000 included in the 2026 budget.

“In March and in May 2025, we had zero sales, and we had zero transfer tax. That is a significant loss for us,” Hart said. “If the market stays as it is, and we don’t see a huge increase in interest rates, I think we can bring in $55,000,” she said.

“75 percent of our tax millage goes to general operation (expenses). So when we lose $25,000, we’re losing a good amount of our operating budget, which we can only make up with tax increases. I’m not recommending one as of yet, but I wanted to bring that to light,” the manager said.

The next-largest source of revenue, the town’s earned income taxes, reached just under $613,000 in 2023, then up to $642,000 in ’24, and were budgeted at $525,000 for ’25 and so far have totaled just over $508,000, the manager said; thus, a projection of $550,000 is included in the budget for the upcoming year. Franchise fees from Comcast and Verizon contracts that cover the entire town are projected to drop slightly, with $53,000 in 2023 and $49,000 in 2024 projected to drop to $45,000 for ’26.

“We’ve continued to see a downward trend in the cable franchise fees, because most people are streaming. Nobody’s paying their full Comcast or Verizon bill; we used to get $75,000, now it’s down to an anticipated $45,000,” Hart said.

The manager then outlined the recent trends and projected figures for various permits and fees, with other notable items including an expected $10,000 grant to reimburse police for new bulletproof vests, and a carryover of a $770,000 line item for a grant-funded Center Street Extension sidewalk project that was budgeted in 2025 but not yet started due to staff turnover. An even larger line item is also due to grants: a $1 million state grant for the town’s Arts and Cultural Center had been budgeted as revenue from 2025 but not yet received, thus that line item has also been carried over into 2026, the manager said, as has a placeholder figure of $5,000 in revenue from ticket sales for events there.

“It’s an unknown for us, so I’m just plugging in the $5,000. If it goes more than that, great, but I don’t want to put too much in there,” Hart said.

All in total, projected revenues are expected to increase by less than one percent if current tax levels remain; a discussion council will have to continue.

“As we all know, we’re all paying more for things we purchase, more for things we do, but we’re not getting paid more to do it,” she said.

One other major drop: income from state recycling grants processed by the Northern Montgomery County Recycling Commission is projected at $6,500 for 2026, the same figure as in 2025 but well below numbers from a decade or two ago.

“Ten or twenty years ago, we were getting $70,000 to $80,000. There’s just no money left in recycling, and it costs a lot to recycle, but I would still encourage everyone to recycle because it’s even more expensive if we’re not recycling,” she said.

Expenses below budget in 2025

On the expense side of the budget worksheet, major changes to watch for as the 2026 budget is drafted start with staff salaries: an assistant manager salary line item is roughly $30,000 under budget due to the departure of a prior assistant manager in June, and the salary for public works supervisor is roughly $50,000 under budget due to a similar vacancy; those positions have not yet been filled but could be in the new year, Hart said.

Dues and subscriptions are staying level at $750 for staff subscriptions, including to The Reporter:  “It’s very important that the (police) chief and I stay current on what’s going on in the community — not only our own, but our surrounding communities, and our county, and nationally. It does make a difference,” Hart said.

A line item for meetings, conferences and courses for staff training will also hold steady at $1,500, a number the manager said she’d like to increase in time, but likely not in 2026.

“Although we get many offers as staff, and manager and chief, to go to attend certain things, we honestly don’t have the time,” she said.

Another salary item has gone over budget this year, but looks likely to be back to normal next year: police overtime wages were budgeted at $31,000 for 2025, so far have totaled just over $36,000 due to certain officer departures and large events, and are budgeted back at $31,000 next year if full-time officer vacancies are filled.

“We’re still anticipating five full-time officers, so this will actually go down,” she said.

Major discussion items for council to consider in future meetings will be the budgets for capital purchases such as a new police vehicle, infrastructure projects such as a placeholder figure of $500,000 for road paving, investment strategies for reserve funds if interest rates do fall, and donations to local organizations including the North Wales Area Library, VMSC-EMS, and the North Penn Volunteer Fire Company.

“This is a draft. It is not done in totality,” Hart said.

Acting council president Mark Tarlecki added that the vast majority of the funds and line items detailed by the manager are required or spelled out by state law and borough code, thus council has limited options for adding revenue.

“With the exception of the real estate tax, that’s the only tax that we as a council can control, in terms of lowering or increasing our millage, if needed. All the others are state-mandated, county-mandated, and fixed sources of income,” he said.

“Everything we do in North Wales, services-wise, for the residents, is driven by this budget,” Tarlecki said.

Mayor Neil McDevitt asked if staff had included any projections of lower interest rates in the budget draft, and what those rates could do to interest earnings and/or real estate transfer revenues; Hart said no changes have been made yet, but could if rate cuts are confirmed before the budget is finalized.

“When we were in 2019, ’20, ’21, you were looking at a 2.5, 3, 4 percent max on a 30-year (mortgage) — now we’re up into the 6, 7 (percent)” range, Hart said.

That sentence drew chuckles from Tarlecki and councilwoman Sarah Whelan, who both said they’ve heard that slang phrase often in the classrooms where they teach.

“I hear the term ‘six-seven’ every day at my school. Anybody who’s a teacher knows it, it’s been said probably 20 times today. It’s just a phrase like, ‘Ehh, I don’t care,'” Tarlecki said, as he demonstrated a shrug his students typically use to accompany the phrase, and Whelan added: “He laughed, and I was like ‘Nooooo!'”

Talks will continue on the draft budget at upcoming council meetings, according to the manager.

North Wales borough council next meets at 7 p.m. on Oct. 28 at the borough municipal building, 300 School Street; for more information, visit www.NorthWalesBorough.org.

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