City staff recommends approach to 2024 and 2025 budget shortfalls - City Council Special Meeting held April 30
Following a presentation of the City of Loveland’s monthly financial report to Council on March 19, Acting City Manager Rod Wensing asked them to consider holding a Special Meeting on Tuesday, April 30, with the intent to seek strategic guidance regarding an ongoing multi-million-dollar shortfall to the City’s general fund.
“We know we’re facing an ongoing revenue shortfall and it’s my role to bring recommendations to City Council on how we can balance the 2024 budget and plan for 2025,” said Acting City Manager Rod Wensing. “Final City Council decisions have not yet been made, but based on general fund revenue shortfalls, we know that we can no longer operate as we have. This is a new normal that requires us to rethink the service levels that the City of Loveland can realistically sustain. We look forward to a productive discussion with City Council.”
City staff will present the following recommendations for Council feedback and guidance Tuesday night.
2024 budget adjustments
To balance the current year’s budget, staff recommend “bridge” budget reductions to account for the revenue loss in 2024. The recommendation involves canceling scheduled 2024 capital improvement projects and one-time expenditures and using savings from 2023 position vacancies. Recommended 2024 reductions would need to be approved by City Council during a separate public meeting and would take effect later this year.
2025 budget preparation
Review of the 2025 budget typically begins in June rather than April, and staff have been evaluating the long-term impact of decreased cash collections on sales tax revenues. The 2025 budget goes to City Council for review in October; however, Wensing is asking Council to provide strategic guidance on staff’s methodology used to prioritize and reformulate City services and programs relying upon the General Fund in 2025 and beyond to ensure a balanced budget.
Over the last few months, the City’s Executive Leadership Team has invested in a prioritization exercise to inform the methodology for this important and difficult budget recommendation we are proposing on Tuesday,” said Wensing. “An immense amount of work and thought has gone into it because of the challenging nature of these decisions for both the City and our community.”
The proposed methodology prioritizes critical City services while reducing other City projects, programs, and services for a sustainable and balanced 2025 budget.
Proposed reductions could impact all General Fund departments but prioritize public safety, infrastructure asset management, community mobility, and critical core government business services. As a result, General Fund City services and programs that are not within those prioritized areas would be significantly reduced, delayed and in some instances, eliminated.
Staff does not recommend use of emergency City reserve funds as there are limited opportunities to replenish any funds used going forward, and reserves must be retained for unforeseen community emergencies such as floods, wildland fires, etc.
“We are focusing on what we can do with our available General Fund resources,” said Acting Deputy City Manager Mark Jackson. “There is no way to preserve all our programs and services. This process and the recommendation have been difficult for everyone involved, but we must operate within our means.”
The City budget is a policy-level document that establishes spending priorities and guides programs and service levels. By law, the City must operate within a balanced budget and enterprise or special revenue funds cannot be used to cover General Fund budget shortages.
Details on the City Manager’s budget recommendations are now available as part of the April 30 City Council meeting packet.
Participate in Tuesday’s meeting
Tuesday’s City Council Special Meeting agenda and packet can be found on at cilovelandco.civicweb.net. The meeting begins at 7 p.m. in the Municipal Building Council Chambers, 500 E. Third St.
The meeting will be broadcast on Comcast Channel 16/880, Pulse TV channel 16 and streamed through the City’s website at lovgov.org/tv.
For more information about the City of Loveland budget, visit LetsTalkLoveland.org/Budget.
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CONTACTS:
- Kim Overholt, Communication & Engagement Manager, 970-962-3268, kimberly.overholt@cityofloveland.org
- Nicole Yost Communication & Engagement Director, 970-962-2302, nicole.yost@cityofloveland.org
