Business Administrator Eric Evans told the Bethlehem City Council Finance Committee the city has been preparing for an uncommon payroll timing issue — a 27th biweekly payroll — that will occur in the 2027 calendar year and is scheduled for Jan. 1, 2027. The item was presented for information; no vote was required.

Evans explained that the city’s biweekly payroll schedule (26 pay periods per year) accumulates an extra pay date roughly every 11 years when calendar and leap‑year timing align. The 27th pay is scheduled for Jan. 1, 2027, but because banks are closed on that holiday the city will execute payroll the business day before. To cover the added cost, the city has built an escrow account labeled for the 27th pay, with a long-term goal of roughly $2 million to cover the general fund payroll impact.

"This is an informational item. There's no need for a vote this evening," Evans told the committee and said the city has set aside funds since 2016 and will show the escrowed amount as a revenue line in the 2026 budget for use when the extra payroll occurs. The memo to the committee summarized prior measures and simulations that put the anticipated 27th-pay cost near $2 million when employer taxes, benefit matches and other payroll‑related costs are included.

Evans said the city will make a one-time transfer from the escrow into the 2026 budget to cover the payroll in early 2027, and staff plan to resume annual savings so the next 27th-pay cycle is funded in advance. Committee members praised the planning and auditors confirmed escrow treatment is permissible when council approves spending at the time of use.

The item was presented as an early budget planning matter; further details will appear in the city’s 2026 budget documents and in materials presented to council.