Budget Workshop covered 2027 funding proposals
“This is an exercise in looking to the future,” said Acting Deputy City Manager and Chief Financial Officer Molly Elder at the start of the annual Budget Workshop. The City of Loveland’s annual Budget Workshop with City Council was Monday, Aug. 24, marking the first public discussion of the City Manager’s proposed 2027 City budget. Elder guided City Council through an overview of revenues, expenses, and long-term considerations ahead of the formal budget adoption in October. The meeting also provided City Council with an opportunity to ask questions about the proposed 2027 budget.
Operational and capital reductions made in 2025 served to keep the City of Loveland stable into 2027, but a key takeaway of the meeting was that the City’s budget is not yet healthy. In our financial outlook, many core community services operate under constrained budgets and investment in capital infrastructure is significantly behind, which several directors covered more in-depth toward the end of the meeting.
Elder stressed that reductions made in 2024 and 2025 served to stabilize the budget and additional budget reductions were not necessary for the 2027 budget.
General Fund Summary
2027 general fund revenues outlined in the Budget Workshop meeting packet, are forecast at about $136 million. Sales tax is still Loveland’s largest source of revenue, followed by property tax. The general fund is limited, and many essential services—like police, fire, parks, streets, City operations, and the library—compete for the same dollars.
About half of general fund expenses go towards paying staff. These are the employees who provide the day to day services residents and businesses rely on. Total expenses for 2027 are projected at roughly $141 million.
Capital projects include major repairs and replacements—like roofs, HVAC systems, roads, and facility upgrades. Only about $2.6 million is available for general fund capital projects in 2027, which is less than needed to keep existing assets in good condition.
Total funding for outside agencies is approximately $22 million. Loveland Fire Rescue Authority makes up most of this amount, receiving about $19.9 million. Many of these contributions are required by law or by contractual commitments.
City Council also reviewed funded and unfunded departmental requests; just over half of critical requests were included in the draft budget.
There was also a general fund forecast provided to Council, which addressed Centerra agreements that expire in 2029. When Centerra agreements expire, the City expects to receive about $4.1 million more in sales tax starting in 2029, and $2.2 million more in property tax starting in 2030. Even with these increases, the City does not expect this revenue to fully offset past losses. The City of Loveland saw a decline of -11.1% in 2024—or about $10.5 million annually—as a result of a change to its sales tax base.
Summary of Other Funds
Beyond the general fund, Loveland manages a variety of dedicated funds that, by law, can only be used for specific purposes.
These include:
- Enterprise funds, such as Golf, Solid Waste, Water, Wastewater, Electric and Communications, are funded primarily through user fees;
- Special revenue funds, such as Open Lands Sales Tax, Art in Public Places, and Lodging Tax, which are restricted by voter approval or state and federal law; and
- Internal service funds, which support organization-wide functions.
Utilities Director Sharon Israel presented the Utilities budget to City Council, explaining that our revenue for these services comes from customer bills and is reinvested to keep electric, water, wastewater, and communications systems safe, reliable, and sustainable. For these services, we are proposing a slight 1.17% decrease in their budget, moving from the 2026 adopted budget $269,478,767 to the 2027 proposed budget of $266,316,106.
Isreal emphasized the separation between ratepayer-funded operations and developer-funded growth projects. Across all utility services, the City faces rising infrastructure costs, increasing regulatory requirements, and the challenge of maintaining reliability while preparing for community growth.
Utility rate increases are proposed for 2027 to keep pace with higher costs of materials, treatment, energy, and equipment. All utility budget proposals have been unanimously supported by their advisory boards. The proposal includes a 7% increase in water rates, an 8% increase in wastewater rates, and a 6.63% increase in electric rates. Rates are adjusted annually to cover the cost of operating our City’s not-for-profit utilities.
Looking Ahead: The City Faces Challenges
The services the City provides, the condition of assets, and our ability to manage risks all depend on available funding. With limited resources and many competing priorities, several City directors stepped in to explain the key considerations we must keep in mind for the years ahead.
From Utilities, Israel emphasized that upcoming energy transitions require carefully balancing reliability, service, and affordability over multiple years. Ensuring reliability and resilience add costs, and Utilities remains under-resourced. For example, Loveland has budgeted to replace only about 0.15% of its water lines in 2026. The industry standard is 1%. This increases the chance of costly emergency repairs. Israel emphasized that, while we move through transitions, we make decisions with ratepayer impacts in mind.
Public Works Director Will Jones noted that the City’s focus is no longer on building new infrastructure but on maintaining what already exists. Much like your own home or vehicle, pavement, facilities, and other City assets require ongoing capital reinvestment. With no increases in funding, he outlined that Loveland’s assets will continue to deteriorate. Pavement condition will decline toward the industry average of poor.
Jones also explained that the City has historically only budgeted $2.2 million annually (5 year average) for facility maintenance, and based on industry best practice, our target should be closer to $7.1 million, leaving a gap of nearly $4.9 million.
Community Placemaking Director Kara Kish spoke about the challenges facing the General Fund-supported service areas of parks, recreation, library, and cultural services. The challenge is not only maintaining community assets — it is sustaining the people, programs and access that make our public places valuable.
Staff work to identify and apply for grants or utilize Capital Expansion Fees to build or expand facilities, but this funding cannot be used to operate or maintain the City’s assets. Kish used the example of high-cost community park playgrounds to highlight the dependency on available General Fund dollars for replacement. During the question and answer portion of the workshop, Kish stated that approximately $1.5 to $2 million annually would be needed to keep up with the total asset replacement needs of the Parks Division.
City of Loveland Chief Information Technology Officer Dan Coldiron outlined budget pressures and the invisibility of IT risks. He mentioned that long-term planning is needed to build capacity, address single points of failure, and align cybersecurity investments with citywide risk.
Key pressures include:
- Infrastructure support below benchmark levels
- Limited redundancy, creating continuity and recovery risks
- Staff absences or turnover potentially disrupting public safety, utilities, financial systems, and emergency operations
- Growing cybersecurity demands
In summary, the City faces long term challenges that will influence future budget decisions. Continued planning and an intentional public engagement strategy will be essential as the City works to meet community needs with limited resources.
For more information, access the Budget Workshop meeting packet. Formal budget adoption takes place during City Council meetings this fall.
