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Council staff recommends process for spending new retail marijuana sales tax; council to set priorities
Summary
City staff proposed code amendments to let council solicit and review grant applications and recommend uses for a retail marijuana sales tax special fund tied to public safety, mental‑health and PTSD programs.
Michael Montgomery, deputy city council administrator, briefed council on June 9 about proposed amendments to the city code governing the section 108 special fund created for a 5% retail marijuana sales tax. Montgomery said the tax was approved by voters in November 2022 to support public safety programs, mental‑health services and post‑traumatic stress disorder treatment programs; retail sales began April 15, 2025, under a later citizen‑initiated ordinance that allowed existing medical dispensaries to seek retail licenses.
Under current code, the special fund can only be used for the three voter-approved purposes and the mayor is authorized to spend the money on programs; the ordinance also created a three‑person independent audit panel appointed by the mayor. The proposed amendment would allow city council to solicit and review applications for grants, make recommendations to the mayor about expenditures and allow the city to contract with nonprofit organizations and agencies to deliver eligible programs.
Montgomery urged the council to move quickly so expenditures can be planned in the 2026 budget. He proposed that council consider forming a subcommittee to help develop a data‑driven, merit‑based grant rubric and a July–August solicitation and review timeline, with a resolution to forward recommendations to the mayor for the 2026 budget cycle.
Councilmember Donaldson asked whether “public safety programs” is defined in the initiated ordinance. Ben Bollinger from the City Attorney’s Office said the term was not defined and that council could define it in code or rely on its ordinary, logical meaning. Bollinger also reminded council that the charter gives council appropriation authority while the mayor determines program selection and spending; the proposed code change would create a formal review role for council without binding the mayor.
Councilmembers discussed coordinating these funds with existing grant processes, including the Colorado Springs Health Foundation and opioid‑council frameworks, and emphasized developing a rubric that matches city priorities and maximizes matching funds. The item is scheduled to return to council for a first reading and further consideration.
