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Greeley board approves revised 2026 water and sewer budget; water rates cut to 5.5% from 8%
Summary
On Aug. 20, 2025, the Greeley Water and Sewer Board voted to approve and recommend a revised 2026 operating and capital budget that lowers the proposed water rate increase to 5.5% (from 8%) and holds sewer increases at 5%; the package delays several capital items and trims operating budgets to reduce near-term rate pressure.
GREELEY, Colo. — The Greeley Water and Sewer Board on Aug. 20 approved and recommended to the city manager a revised 2026 operating and capital budget that reduces an earlier-proposed 8% water rate increase to 5.5% while keeping sewer rate increases at 5%. The board voted to approve the package after staff described changes that lower near-term borrowing needs and operating requests.
The revision trims or delays capital spending and reduces some operating contingencies to bring down the immediate rate impact. “What you’re seeing today includes a 5.5% rate increase for water and a 5% rate increase for sewer,” said Virgil, finance staff presenting the revised proposal. Chairman Harold Evans, expressing concern about long-term debt levels, said he was “really uncomfortable with looking at a, you know, $35,000,000 debt annual debt service.”
Why it matters: the board initially recommended a larger water increase in July; staff’s revisions — including postponing an operations building, rescheduling an anticipated water-acquisition payment, cutting the planned distribution inventory escalation and trimming a $130,000 contingency in the water-resources budget — lowered projected borrowing and reduced the 2026 rate ask. Staff said the budget relies on modest growth projections and ongoing salary savings.
Key details: - Revised rate changes: water 5.5% in 2026 (down from 8%); sewer 5% in 2026. The model projects additional 5% increases in 2027 and 2028 for water and smaller changes later, with a larger step up when debt service spikes around 2032–2035. - Capital shifts: the F Street operations facility was postponed from 2027–2029 to a later multi‑year schedule, and a large water acquisition was rescheduled so a small payment falls to 2026 and the principal payments start in 2027. Staff also reduced the planned distribution-inventory increase by $32,000 and held it flat at $275,000 annually for the near term. - Operating savings: staff reported higher-than-average salary savings (about 25% year to date) in the utility funds, cited hiring challenges for specialized positions and identified $14,000 of wastewater budget savings. - Customer impacts: staff presented bill examples showing typical monthly bills rising by about $10.23 in 2026 for a typical residential user; by 2030 the model shows the water portion at about $102.97 and total bills approaching $199.24 under current assumptions. - PIFs and credits: the board packet includes a 10% increase to the PIF (system development) total shown in the model; staff reported a recent uptick in the market acceptance of “wing-foot” credits, with 73 credits redeemed since 2024.
Board action and next steps: Board member motioned and a second was made; the board voted “aye” and the motion carried to approve and recommend the Water and Sewer 2026 operating and capital budget to the city manager. Mayor Gates told the board the “current data is far more palatable than it was.” Staff said the city manager will incorporate the board recommendation into the budget he submits to city council.
Context and caveats: presenters emphasized the budget is built on conservative growth assumptions (roughly 3.5% growth baked into the cash flow model) and annual reassessment of the capital-improvement program. Staff and board repeatedly noted that later replacement projects — including three very large replacements or upgrades slated in the early 2030s — are driving future debt-service increases and will be reevaluated annually to consider phasing or spacing to reduce near-term pressure.
Quotes in context: “We were actually able to bring down that down to 3% for ’28,” Virgil said, describing multi‑year rate projections. Chairman Evans urged caution on long-term borrowing: the projected $35 million in annual debt service “somewhat scares me,” he said. Mayor Gates thanked staff: “appreciate it very much.”
The board’s approval is a recommendation to the city manager; final budget adoption and any ordinance-based rate changes will require additional city council and city-manager actions.
