LOCK HAVEN — With inflation causing a ripple effect across the country, the Lock Haven City Manager warned council this week its budget for 2026 could see some challenges.

During its meeting Monday night, Wilson noted the budget review process by council — which typically begins in November — will begin at its next meeting, Sept. 22.

The first section of the budget planned for review is its Water Fund along with its rates and expenses.

“As council examines the budgets, I wanted to bring to light some of the challenges the city will face in the 2026 fiscal year,” Wilson said.

Wilson said about 75 to 80 percent of the city’s overall expenses in its budget is for wages, benefits, debt services on loans and insurances.

Health insurance increases are currently projected to be as much as 20 percent more than 2025, he said. Natural gas and electricity are also predicted to see an increase in the double digits.

When it comes to wages, Wilson said increases are expected there due to employees being tied into collective bargaining agreements.

“Wages… will also increase to near the Social Security Cost of Living increase for 2026, which is currently predicted to increase over 2.5 percent,” he said.

Workers compensation and liability insurance are projected to also increase by about 2.5 percent, though Wilson said it does receive some credits from Penn Prime against its premium.

“But likely not enough to offset an increase,” he said.

Wilson emphasized the city doesn’t have a “rainy day fund” or an excess of cash sitting in a bank to cover these increases expected in 2026.

“That being said, I will be working with department heads and the city’s superintendents and foremen to bring you our best estimates on what we will need to properly staff and run the city in 2026,” he said. “Because decisions this year may take longer than normal, we will start the process early to ensure the council has ample time to make the best decision in the interest of the residents.”

Members of council did not offer comment regarding Wilson’s budget update.

In other business, council:

— Approved a use request from Lock Haven VFW Post 130 for use of city streets for a memorial run on Oct. 4.

— Approved an ordinance which amended a section of the Ross Library By-Laws. Council Member Jeff Brinker was the only member to vote no on the proposed amendments, which were on second reading.

— Approved a request from Tangent for electric connectivity from the city’s solar field to the garage near the south T-hangars. Wilson told council the connection was necessary so the solar array is attached to the nearest meter.

— Approved a recommendation from Wilson to keep its solar TPA agreement at $0.0555 per kilowatt hour with an adjustment to the buy-out option.

— Approved a resolution for the winter maintenance agreement with PennDOT. Wilson said there were some changes to the agreement, with PennDOT taking over maintenance of North Fairview Street, Susquehanna Avenue and Hill Street. City employees will continue to maintain Water Street, Bellefonte Avenue and Church and Main streets. According to Wilson, this change is due to reimbursements from PennDOT not keeping up with inflation.