Early budget projections indicate the city of Greeley will spend more money than it’s bringing in for the third straight year, and the gap may become more than can be managed, city staff warned the council last week.
On Jan. 27, Budget and Policy Director Nathan Mosely and Division Treasurer Robert Miller delivered what Councilwoman Deb DeBoutez described as sobering information: the city is earning only slightly more money each year while spending more than it earns.
As the 2025 budget review nears completion, Greeley’s financial future appears strained, as many budget areas did not perform as well as expected. This resulted in a $21 million deficit that was filled with the use of remaining 2024 funds, realignment of work tasks among city employees and appropriating funds from other funds available to the city.
While expenditures continue to widen the gap, Miller broke down the issue as a matter of revenue generation resulting from the current national economic conditions. In the 2025 budget, the city anticipated a 5.4% increase in sales tax revenue, but it actually rose by only 1%, leaving the city with $3.7 million less than staff had projected.
The revenue from the city’s building and development fees also came in $5.9 million less than what was projected.
Oil and gas revenue was a bright spot, bringing in $3.5 million above the expected value. The city also managed to save $8 million from projected operating expenditures. One of the biggest factors that kept the budget in sound financial shape, according to Miller, was an additional $6.2 million in interest earnings from the certificates of participation issued for the Catalyst entertainment district in west Greeley.
Mosley said the lower revenues are hitting the general fund hardest. Unless changes are made to the budget, he said, the city will have to continue appropriating funds from other departments. The revenue stabilization fund that previously helped fill gaps is expected to reach the legally permissible minimum in 2026.
“We need to fix the general fund problem so we can have as much money available as possible to meet the needs of our capital facilities and make sure that we’re able to refresh and repurpose them before they get to the point that it’s too late,” Mosley said. “If we don’t fix the general fund problem, we’re going to have to keep robbing money from other areas in order to fill the gap.”
Proposed solutions
Mosley told the council that the city will switch to a new budgeting model called target-based budgeting. Unlike the current model where departments make requests and the council approves or disapproves them, the city will have to work within a budget ceiling.
“Turning to a target-based budget promotes fiscal discipline by utilizing projected revenues as the basis for department targets. It also increases self-determination by providing departments with the freedom to develop funding proposals within the boundaries of the target,” Mosley said. “I’m confident that the target-based budgeting is the best approach for our organization to address our structural deficit.”
Mosley said this budget model may allow departments to self-regulate their expenditures and then offset the remaining revenue needs by adjusting the services the city provides to the community.
“That’s never fun to be able to cut stuff,” Councilwoman Melissa McDonald said. “But there’s probably stuff that’s going to have to be scaled back or cut.”
Council direction
Councilman Johnny Olson asked Mosley to review one-time programs approved in 2022, the last year expenses did not exceed revenue, to see if any slipped through the cracks and became long-term expenditures. Olson said he believes the city’s current deficit is the result of overspending, and he thinks there are areas of excess that could be reduced.
Councilman Tommy Butler took the opposite perspective, saying it’s a revenue issue as much as an overspending issue. Butler reintroduced the idea of a public safety tax, something the council has tried to put on the ballot for several years, believing it is more critical now than ever, given Greeley’s westward expansion with the Catalyst project.
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