LOVELAND, Colo. — In a bid to adapt to a projected multimillion-dollar revenue loss following the elimination of the grocery sales tax by voters last November, the City of Loveland convened a special council meeting Tuesday.
The meeting aimed to chart a course for the city to maintain its status as a full-service entity.
At the meeting, city officials, including Acting City Manager Rob Wensing, Acting Deputy City Manager Mark Jackson, and Chief Financial Officer Brian Waldes, laid out the financial predicament facing Loveland. The projected loss, amounting to $11.66 million, was based on revenue data from January and February which exceeded $1.62 million.
The measure to eliminate the 3% grocery sales tax, in place since 1984, received overwhelming support from voters in November, garnering 65% of the vote. The impact of this decision translates to an estimated $300 saved annually or $25 monthly for those spending $10,000 per year on groceries.
Drawing parallels to previous economic downturns, the city's executive council opened its presentation with an emphasis on how this situation is worse due to its permanence.
"We've never experienced this kind of revenue loss before, multimillion dollars for an extended period of time. We went through the Great Recession, we went through COVID, but they were national downturns. This downturn is local. Our neighbors are not experiencing this. We need to start talking about a new normal in 2025," City Manager Rob Wensing said.
City officials said this substantial deficit spells an end to the city's ability to sustain current service levels.
In response to this financial crisis, city officials presented a budget plan for 2024/2025 that includes multimillion-dollar cuts across various sectors such as public safety, public works, parks and recreation, and public-facing services.
> The full 2024/2025 budget planning proposal can be found here.
Several people spoke out during public comment Tuesday, questioning why certain cuts were being made.
"Please don't go after the library. Find other ways to make this work, and find ways we can bounce back from it. There are ways of managing a budget, and I know you all manage budgets, and I know you can do this," one resident said.
For the immediate term, 2024, the city plans one-time reductions as a temporary solution. These include canceling major projects such as a sprinkler system upgrade for the library, upgrades for the Centennial Park Ballfields Plaza, and a renovation for the Northlake Tennis Courts.
The city provided this breakdown of one-time 2024 budget cuts:
Total public works: $3,615,000
- Cancel Facilities Master Plan $1,812,000
- Capital Projects - Budgetary Savings $1,061,000
- Facility Custodial Contract Reduction $150,000
- Foundry Space Monitoring System $134,000
- Reduce Ongoing Facility Maintenance $105,000
- COLT FLEX Contribution Reduction $100,000
- One Vacant Building Attendant Position $94,000
- Library Sprinkler System Upgrades $79,000
- Traffic Operations Software Reduction $40,000
- Traffic Fiber Lease $40,000
Total parks and recreation: $1,872,000
- Centennial Park Ballfields Plaza Upgrades $738,000
- Northlake Tennis Courts Reno (10-12) $472,000
- Chilson Revenue Adjustment $200,000
- Equipment Replacement moved to Fund 202 $181,000
- Chilson Equipment Replacement $157,000
- Recreation Equipment Replacement $72,000
- Payroll Savings due to Restructure $27,000
- Milner Schwartz House Fence Replace $25,000
- Total 2023 rollover savings to be used for one-time 2024 reductions $8,404,804
"This is not easy. This is not best practice, and this is not something we can repeat," Waldes said. "Those capital projects are canceled. It's not being delayed. We are taking the money and using it to keep the lights on. There are projects in there like sprinklers, tennis courts, all that stuff? Gone."
Waldes said all the canceled projects will have to be reappropriated into a new budget.
Recommended 2024 reductions would need to be approved by City Council during a separate public meeting and would take effect later this year.
> The full quarterly financial report can be found here.
Looking ahead to 2025, the city proposed permanent alterations and reductions. The top three areas targeted for budget cuts are public safety, public-facing services, and external support.
Public safety is slated for a $4.1 million reduction, affecting entities like Loveland Fire Rescue Authority and the Loveland Police Department. Public-facing services face a $5.7 million reduction, impacting park infrastructure, library programs and cultural services. External support is set for a $1.5 million cut, affecting various community programs and grants.
While the city possesses a fully funded emergency contingency fund, city officials stressed the importance of preserving these funds for unforeseen emergencies, such as floods and wildfires.
A city spokesperson said many people on the council would consider a ballot measure asking voters to approve a different type of tax, such as a lodging tax or a different sales tax, to preserve services at the current level.
The council will provide a more detailed update in June, the spokesperson said.
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