City Manager staff presented a high-level overview of the proposed 2026 City of Longmont budget during the Aug. 26 meeting and told council the proposal is balanced but constrained by falling use-tax revenue and higher personnel costs.

Key points: the proposed all-funds 2026 budget totals about $520.2 million, a 9.85 percent increase over 2025. The city manager told council "at a high level, the 2026 budget is balanced," and emphasized that staff built the proposal with no proposed tax increase. The manager said the budget relies on existing fund balances for some capital projects and that staff will seek to replenish stabilization reserves over time.

Revenue pressures: staff reported that use tax collections, driven largely by construction and materials categories, are down roughly 21 percent year to date and are the largest source of uncertainty. The manager said property-tax growth assumptions are modest for 2026 after changes to state assessment ratios that reduced taxable valuations for some classes. Marijuana-share changes at the state level also reduced expected local receipts.

Expenditure drivers: the budget assumes ongoing investments in infrastructure (streets, airport, water and storm) and continued market-based compensation for employees. The city intends to hold a market-adjustment policy at roughly 101 percent of pay-range midpoints in this proposal, with some targeted catch-up increases for positions behind market and some fixed-term additions in enterprise funds (notably 4 IT-related positions proposed for an information-technology fund while other new positions are within enterprise operations).

Capital and priorities: the proposal includes capital allocations for street reconstruction, airport infrastructure and other ongoing maintenance needs; staff noted the transportation program and street reconstruction funding remain a priority. Staff also emphasized recreation cost-recovery improvements: recreation programs now approach the department's 80 percent cost-recovery target after adding day-camp capacity and adjusting internal cost allocations.

Next steps: council and staff agreed to detailed budget hearings in early September focused on the general fund, public safety fund and capital items, and staff will return for appropriation of identified grant matches and other items at the Sept. 9 or Sept. 23 meetings as needed.