Thursday, October 1, 2026
Higher utility bills are putting pressure on the 2026 budget for the City of Lacey.
Staffers are preparing a final amendment to the budget year to address utility expenses, along with additional spending on transportation, water service and other priorities. Staff presented a revised amendment of about $5.9 million at a Lacey City Council work session on Aug. 25.
The general fund accounts for $2.8 million, followed by about $1.6 million in utility funds and $925,000 in special funds. Other categories include $454,656 in capital funds, $70,189 in internal service funds and $57,350 in fiduciary funds.
Major amounts in the proposal include:
Lacey faces a $1.73 million shortfall after utility expenses surpassed projections in eight city funds. Electricity and city utility costs account for the increases, particularly street lighting and water well pumping.
General fund-related accounts make up $722,348 of the shortfall. Water accounts for $523,379, while wastewater accounts for $468,859. Staff said the higher 2026 expenses will form part of the baseline for the 2027 budget before future rate adjustments are applied.
The increase prompted city officials to seek more information from Puget Sound Energy (PSE).
Lacey City Manager Rick Walk said he has been discussing the possiblitiy of a future work session with PSE representatives so the company can explain its rate increases and the factors behind them. He said the discussion could also cover assistance programs available to customers.
Council member Lenny Greenstein said the public is paying higher PSE costs both at home and through the city budget. He called for the company to explain the increases publicly.
"I think it's only fair that PSE sit down in an open meeting," Greenstein said.
Transportation and water spending account for several other major changes.
The city is seeking $625,000 for right-of-way purchases for the College Street and 16th Avenue roundabout. Acquisitions are ahead of schedule, so the amendment advances money already planned for the project.
Another $312,000 will be used to purchase water meters through year-end. Finance Director Troy Woo said manual readings dropped from more than 2,000 in February to 272 in July as a replacement program progressed.
The amendment also corrects funding for an excavator shared by the water and stormwater funds. The full budget had been placed in the water fund in error, and the amendment moves the stormwater portion into its own fund. The correction amounts to $128,697, which also includes a $21,211 increase between the budgeted and actual cost, allocated between the two funds.
A possible $300,000 for sidewalk gaps this year was also discussed, though it was not included in the original packet. Staff said another $300,000 is anticipated through the 2027 budget process, potentially providing $600,000 after final budget approval.
Meanwhile, the city is seeking another $63,000 for electrical supplies after a series of damaged utility boxes and wire thefts. Lacey Police Chief Robert Almada said thieves have increasingly targeted copper as its value has risen.
"I can tell you that they stopped doing catalytic converters and they went to copper because copper is worth more money now," Almada said. "So we're not the only jurisdiction seeing that."
Almada said police are pursuing the people who are responsible for the thefts and purchasing the stolen material. Walk said cameras and information about theft hot spots have also helped speed up investigations.
No action was taken during the discussion, with the council scheduled to consider the budget amendment ordinance at a meeting on Tuesday, Sept. 1.
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