Preliminary 2026 budget: Greeley staff outline large capital needs, warn of possible double-digit water rate increases

Greeley water and sewer officials on April 14 gave the board an initial look at the utilities’ 2026 budget priorities and financing plan, outlining large capital projects and a preliminary range of customer rate increases.

Virgil (staff presenter) told the board managers had identified about $1.7 million in ongoing budget increases across water operations and proposed water enterprise bond authority between $70 million and $98.5 million. "With those amounts, the preliminary water rate increase needed will be somewhere around 12 to 16%," Virgil said during the presentation, adding that the number is preliminary and can be reduced if some ongoing increases are deferred.

Sewer needs were smaller. Virgil reported identified ongoing sewer increases of about $144,000 and a potential sewer bond program in the $70 million to $90.5 million range. He said preliminary sewer rate increases would likely be in the 8–11% range. Staff emphasized flexibility in timing and phasing and said some requests in the $1.7 million figure are replace-later items or position reclassifications rather than entirely new roles.

Board members asked for clarification and pushed staff to pare requests. Several trustees said the $1.7 million recurring increase looked large and that managers should identify which items could be delayed. Sean (department director) told the board that in past budget cycles staff typically cut about 70% of initial requests before bringing a formal recommendation; the remaining 30% are presented as priorities. Board commentary focused on: how much of the requested increase is salary and replacement positions; the share of rate impact attributable to the West Greeley project; and uncertainty driven by weather-related water consumption trends.

Staff outlined drivers of the revenue shortfall: reduced per-account water consumption versus prior forecasts, weather variability and conservation effects — factors that together create a revenue gap Virgil estimated at roughly $1.8 million relative to last year’s forecast. Virgil also explained the math linking capital needs and rates: for the water fund (2025 rate revenue forecast about $55 million), each 1% rate increase yields roughly $550,000 in ongoing revenue and, on the bond side, approximately $7.2 million of capital capacity via debt service.

Board members asked staff to continue refining the budget and return with updated options. No formal budget resolution was taken at the meeting; staff said they will return to the board with narrower proposals and phased options.