Administration briefs committee on plan to use escrowed savings for 27th pay period in 2027
September 17, 2025 | Bethlehem, Lehigh and Northampton Counties, Pennsylvania
This article was created by AI summarizing key points discussed. AI makes mistakes, so for full details and context, please refer to the video of the full meeting. Please report any errors so we can fix them. Report an error »
City finance officials told the Bethlehem City Council Finance Committee on Tuesday that an extra biweekly pay period — commonly called a 27th pay — is scheduled to occur in the 2026 budget cycle (pay date effectively on or around Jan. 1, 2027) and that the administration plans to fund it from an escrowed savings account set up for that purpose.
The item was informational only; the committee did not take a vote.
Business Administrator Eric Evans explained that because the city pays employees on a biweekly schedule (26 pay periods per year), the calendar occasionally produces an extra pay date over a multi‑year cycle. The payroll date mathematically falls on Jan. 1, 2027, but the city will process the pay the prior business day because banks are closed on the holiday. Evans said the administration has been building a dedicated “27th pay” escrow account since 2016 with a target balance of approximately $2 million, and will show the escrowed revenue in the 2026 budget to cover the extra payroll.
Evans told the committee that the $2 million figure reflects the general fund payroll plus payroll-related costs — Social Security, deferred-compensation matches and similar items — and that simulations run to date support that approximate target. He said the city used several one-time opportunities in recent years to seed the escrow account and that auditors confirmed the practice is permissible if council approves the expenditure when it is drawn down.
Committee members asked whether the city would resume annual savings for the next cycle; Evans said the administration intends to continue setting aside funds as feasible so future councils are not surprised by a one-time payroll anomaly. No formal action was required or taken; the memo will be read and discussed at the full council meeting later that evening as an informational communication to the public.
Next steps: the 27th-pay escrow will be reflected as a revenue line in the 2026 budget and the administration will continue periodic savings to replenish the fund for future cycles.
The item was informational only; the committee did not take a vote.
Business Administrator Eric Evans explained that because the city pays employees on a biweekly schedule (26 pay periods per year), the calendar occasionally produces an extra pay date over a multi‑year cycle. The payroll date mathematically falls on Jan. 1, 2027, but the city will process the pay the prior business day because banks are closed on the holiday. Evans said the administration has been building a dedicated “27th pay” escrow account since 2016 with a target balance of approximately $2 million, and will show the escrowed revenue in the 2026 budget to cover the extra payroll.
Evans told the committee that the $2 million figure reflects the general fund payroll plus payroll-related costs — Social Security, deferred-compensation matches and similar items — and that simulations run to date support that approximate target. He said the city used several one-time opportunities in recent years to seed the escrow account and that auditors confirmed the practice is permissible if council approves the expenditure when it is drawn down.
Committee members asked whether the city would resume annual savings for the next cycle; Evans said the administration intends to continue setting aside funds as feasible so future councils are not surprised by a one-time payroll anomaly. No formal action was required or taken; the memo will be read and discussed at the full council meeting later that evening as an informational communication to the public.
Next steps: the 27th-pay escrow will be reflected as a revenue line in the 2026 budget and the administration will continue periodic savings to replenish the fund for future cycles.
Don't Miss a Word: See the Full Meeting!
Go beyond summaries. Unlock every video, transcript, and key insight with a Founder Membership.
✓
Get instant access to full meeting videos
✓
Search and clip any phrase from complete transcripts
✓
Receive AI-powered summaries & custom alerts
✓
Enjoy lifetime, unrestricted access to government data
30-day money-back guarantee
