Puyallup finance director outlines mid‑biennium budget adjustments, Tier 3 transfers and levy estimate

Puyallup Finance Director Barbara Lopez told the City Council on Oct. 8 that the city is proposing a set of mid‑biennium adjustments to the 2026 biennial budget, including moving restricted transportation benefit district activity out of the general fund, transferring excess reserves to a Tier 3 spending fund and applying ARPA interest earnings to one‑time projects.

Lopez, who identified herself as the city’s finance director, said the review is required by state law and is intended to respond to “any new information that’s out there since budget adoption.” She summarized the proposed changes as labor matrix adjustments for salaries and benefits, moving transportation benefit district revenues to a special revenue fund, Tier 3 reserve transfers and updates to LTAC (lodging tax) allocations and the six‑year capital plan.

Why it matters: The mid‑biennium review updates the second year of the city’s two‑year budget to reflect realized revenues, policy‑required reserve levels and new or critical department needs. Council members said they intend to use the session to sound out consensus ahead of first reading and public hearings scheduled for next week.

Key numbers and mechanics: Lopez said the adopted 2024 biennial budget was displayed at roughly $157,200,000 on one slide, and later in the discussion the mayor referenced last year’s adopted budget as $159,227,662. Lopez said the proposed adjustments would raise the budget to about $169,527,736. The presentation lists about $3.3 million of proposed general fund additions, a $2.6 million transfer of 2024 excess general fund reserves into Tier 3, and an estimated Tier 3 availability of about $3.5 million after accounting for a $5.0 million reservation for a jail remodel. Lopez also reported $908,990 of ARPA interest earnings being moved into Tier 3 for one‑time spending.

Property tax levy: Lopez presented a preliminary 2026 levy estimate of just over $11.4 million, calculated from the 2025 levy with the 1% statutory increase plus Pierce County’s adjustments for new construction. She said the estimated assessed valuation underpinning the preliminary levy was about $10.9 billion (a roughly 5% increase), producing a general levy rate near $1.05 per $1,000 of assessed value. Pierce County will finalize assessed values and the final levy rate later this year.

Council members pressed for context: Several council members asked how large the Tier 3 cushion is and how transfers and spending affect reserves. Lopez said even after the proposed transfers the city would have about $9.1 million in general fund reserves for emergencies and other contingencies. Councilmembers also asked staff to clarify how transfers appear as expenses in both the sending and receiving funds for accounting purposes.

Next steps: Councilmembers were asked to use the session to indicate their positions; formal public hearings on revenues and first reading of the ordinance are scheduled for the next council meeting. Lopez invited questions and pointed to budget overview pages for more detail.

Ending: Councilmembers and staff agreed to continue the discussion at next week’s first reading and public hearings; no formal council votes were taken at this study session.