Centennial trims 2026 revenue forecast, shifts $47 million into managed capital portfolio

Jeff Cadiz, finance director for the City of Centennial, told the City Council on Sept. 9 that the city is updating its revenue forecasts for 2026 and is reorganizing part of its investments to better match expected capital spending.

Cadiz said the city’s total general‑fund revenues for 2026 are projected at $87,100,000 and that staff is recommending a net downward adjustment to the 2026 revenue estimate of about $472,000 (1 percent) compared with the original 2026 budget assumptions. He described three notable changes driving the revision: sales tax, property tax and construction use tax.

Cadiz said sales tax currently shows a positive variance to the 2025 budget of about $1,475,000, but he warned that most of that gain stems from a single, one‑time large sales‑tax return. “That came from one sales tax return from one business,” Cadiz said, describing it as a computer/electronics sale to a data center. He said removing that $3,200,000 anomaly would leave sales tax down roughly 3.4 percent versus budget and down about 1.6 percent compared with 2024 year‑to‑date figures. Cadiz showed staff projections that, absent the one‑time payment, monthly sales tax receipts for the remainder of the year would run slightly below budgeted amounts.

On property tax, Cadiz said actual certified mill levy receipts for 2025 are producing roughly $15,700,000 — about $100,000 less than the adopted budgeted estimate — and that the city has updated its 2026 property‑tax projection to about $15,100,000 based on preliminary Arapahoe County assessed values (up about 0.84 percent year over year). He said the bulk of assessed‑value increases came from new commercial construction while residential assessed values fell slightly.

Other line items Cadiz flagged: construction use tax is now projected at about $3,400,000 (roughly $350,000 below the five‑year average used when budgeting); investment income was conservatively increased to $3,500,000 given current rates; and franchise fees were adjusted slightly (natural gas and electricity trends expected up, cable fees expected to decline over time).

Cadiz also updated council on the city’s comprehensive fee analysis, conducted with MGT Consulting. The study reviewed fees across finance, public works and community development to determine whether fees reflect the full cost of providing services or whether the city intentionally subsidizes certain services. Cadiz said council will receive the consultant’s findings and recommendations at the Oct. 14 budget workshop and that a proposed fee schedule will be posted for public review.

On the investment side, Cadiz said the city is establishing a new Chandler Asset Management‑managed capital projects portfolio to align investable balances with known project cash flows. “We are making some changes to our investment portfolio and shifting more funds into the managed portfolio,” he said, and reiterated the city’s investment priorities: “safety, liquidity, and yield — all in that order.” To seed the new capital‑project portfolio, staff moved $17,000,000 from the city’s existing managed portfolio and $30,000,000 from local government investment pools (LGIPs), for a $47,000,000 total transfer. Cadiz said the city will continue to hold liquid balances in LGIPs and named the pools currently in use: COLOTRUST, the Centennial State Liquid Investment Pool (CSLIP) and the Colorado Statewide Investment Program (CSIP). He said the change is intended to lock in longer maturities at current rates for anticipated project timing.

Council members asked for clarifications on specific line items and presentation slides during the roughly two‑hour revenue presentation. Councilmember Sturgeon praised the approach: “The way we operate as a new‑debt community and saving for projects…it allows us to leverage funds and do more for this community,” he said. Councilmember Holston asked staff to follow up on a miscellaneous reimbursement line item shown on a slide; Cadiz said he would report back by email.

Why it matters: the revenue adjustments and investment changes will flow into departmental budgets presented during the city manager’s proposed budget and at the council’s Oct. 14 budget workshop. The fee‑study recommendations could lead to fee schedule changes (some require council resolution) that would affect service charges across departments.

Cadiz told council he will distribute the presentation slides after the meeting, and that the city will present the full 2026 proposed budget at the October workshop.