Lacey City Council approves $5.9 million amendment to 2026 budget

The Lacey City Council has finalized what officials hope will be the last changes to this year’s spending plan. 

Council members unanimously adopted Ordinance 1705, which authorizes an approximately $5.9 million amendment to the 2026 budget. The council made the move at a meeting on Sept. 1.

Lacey Deputy Finance Director Chelsea Knight said $4,971,152 is associated with new items that had not been authorized previously.

Knight said a handful of the amendments transfer existing budget authority to place expenses with the department managing the program. 

In earlier coverage, The JOLT reported that higher utility expenses were a major component of the proposal reviewed by the council on Aug. 25.

The city identified a $1,728,261 shortfall after utility expenses exceeded projections, particularly for street lighting and water well pumping. The amendment also addressed transportation, water service, sidewalks and public facilities. 

Fund changes 

The general fund accounts for $2.8 million of the amendment. Utility funds account for about $1.6 million, followed by $925,000 in special funds, $454,656 in capital funds, $70,189 in internal service funds and $57,350 in fiduciary funds.  

Some entries transfer previously authorized budget authority between departments or funds. 

For example, $403,000 for the annexation study transfers from Community and Economic Development to the City Manager’s Office because the city manager’s team is leading the project. 

Separately, the amendment authorizes the transfer of $415,851 collected from opioid settlements through fiscal 2025 to Thurston County. The money is intended for regional efforts to allocate, distribute and manage settlement funds for approved purposes. 

The amendment also corrects funding for an excavator previously authorized in the 2026 budget. Staff found that the purchase had been budgeted only in the water fund even though $117,523 was supposed to be allocated to the stormwater fund. The amendment also adds $21,211 because the actual cost exceeded the original budget. 

Budget cycle 

Lacey Deputy Mayor Malcolm Miller noted that the city has needed more than one budget amendment in previous years.

Knight said the city typically processes a carryover amendment from the prior fiscal year, and then aims for another amendment in September. 

However, Knight said the city has needed at least two additional amendments in each of the past two years. 

Lacey historically amends its budget before developing the following year’s proposal. Staffers scheduled the final annual amendment for September to support development of the 2027 budget.