News Flash

Public Notices

Posted on: April 12, 2020

City of Puyallup Prepares to Revise its 2020 and 2021 Budgets Due to COVID-19

The COVID-19 pandemic has impacted all of us: individuals, families, businesses, non-profit organizations, and governments at every level. Some of these impacts are financial, and as a result we’ve all had to take a hard look at our incomes and expenditures.

To this end, the City of Puyallup has conducted a preliminary assessment of its 2020 budget in light of the COVID-19 emergency. This initial assessment will be revisited as the situation continues to evolve.

One thing we already know is that our general fund revenues—particularly sales tax revenues—will be significantly impacted this year. If the current business closures continue through May, it’s estimated that the City could experience a 15% to 25% decrease in sales tax revenue for 2020. If the business closures continue past May, the revenue loss could be more than 25%.

The extent of the decrease in sales tax and other general fund revenues for 2020 will be determined by a variety of factors, including how long businesses remain closed and how the pandemic affects unemployment rates and consumer spending.

Faced with this challenging knowledge, the City has already taken specific and immediate budget mitigation measures:

  • Readying a list of certain capital projects scheduled for this year for the City Council to consider delaying past 2020. All associated cost savings would be in the form of general fund revenues.
  • Halting expenditures unless a purchase is essential to City operations. These include purchases of general equipment, information technology equipment and vehicles.
  • Implementing a hiring freeze for all non-essential positions. Temporary and seasonal positions in our Parks & Recreation Department and Public Works Department, which would normally cost up to $1 million each year, have been put on hold for the time being.

The Puyallup City Council previously implemented a strategic Budget Stability Policy to help mitigate negative financial effects during times like these. In accordance with the policy, the 2020 budget set aside a certain amount of 2020 revenues for use in 2021. These revenues, known as Tier 3 funds, are allocated towards singular expenses such as street projects or other one-time capital expenses. Rather than be set aside this year for use in 2021, 2020’s Tier 3 funds—projected to be approximately $4 million—will likely be tapped this year to cover the anticipated decrease in general fund revenues.

In addition, the City maintains a general fund reserve balance (also known as a rainy day fund) which contains approximately $5 million. These funds are to be utilized only as a last option if and after all other mitigation strategies have been employed.

In mid-May, we will know our sales tax revenue numbers for March. This information will give us a better understanding of the potential revenue decline. We’ll have an even better picture in June as April’s numbers become available.

Whatever happens, the City will continue to deliver essential government services to our community. We remain committed to serving you even in these hard times.

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