Loveland preliminary 2024 financials: sales-tax base change reduces city revenue by $10.4M; general fund tight

Chief Financial Officer Brian Waldes and Budget Manager Matthew Elliott presented the city’s pre-audit, fourth-quarter 2024 financial report to the Loveland City Council on Feb. 25.

Waldes told council that the city’s final, accrual-based sales-tax result reflected an estimated $10,400,000 shortfall tied to changes in the tax base (the food-for-home consumption deduction and related reporting). “When we just add up all the sales tax returns, what we get is the $10,400,000 number,” Waldes said. He added the accrual report landed about $4,400,000 above a conservative internal projection but roughly $8,700,000 below the originally adopted, business-as-usual 2024 budget.

The report highlighted several points that affect budget planning: a near-term cash-collections comparison for January 2025 showed a $1.4 million decline versus the prior-year cash month (Waldes noted that cash-timing differences will be reallocated into 2024 accruals); building-materials use tax (a construction bellwether) finished the year with a favorable variance; auto-use tax was within roughly $100,000 of budget; and lodging-tax revenue showed recovery in 2024.

Waldes displayed a multi-year view showing the general fund’s unassigned/contingency balances tightened during 2024. Preliminary year-end reporting showed an unassigned fund-balance shortfall of about $575,000 (Waldes said audit adjustments and year-end entries would likely reconcile some of that amount). He summarized the city’s investments: a portfolio around $354 million, an average portfolio yield about 2.29% and an average term near 14 months. Waldes said investments are “held to maturity” vehicles and can be sold but generally with a market-price or liquidity tradeoff.

The presentation also explained that the DDA/Foundry parking-garage debt-service is currently supported by the general fund because the incremental revenue generated by the foundry development has not materialized at the level originally projected. “The project is not resulting in the revenue adequate to fund the debt service payment,” Waldes said.

Police department costs tied to disruptive activity around resource centers were raised in the meeting. Assistant Chief Jamberse briefed council with preliminary 2024 figures: approximately $475,000 in personnel-related costs for disruptive-behavior responses and about $172,000 spent on overtime patrols; Jamberse said the overtime number was included in the larger personnel estimate.

Public commenters and councilors asked for clearer fund-level detail and transparency about subsidies. Resident Darren Barrett criticized finance messaging and asked how the city could sustain a planned DDA debt payment, saying, “How are you gonna get $20,000,000 taxpayer dollars to repay that loan?” Resident commenters also asked for clearer reporting on special funds (for example, airport and parking funds) and whether internal staff time or subsidies are being properly charged to those enterprise or special funds.

Waldes repeated that the general fund is “stable” but “snug,” and he urged council to continue monitoring revenue trends and be cautious about new recurring expenditures absent additional revenue. He proposed continued monthly updates as council requested and outlined the 2025 budget timeline for council review.

Ending: Council did not adopt budget changes at the session. Members pressed for additional detail on contingency reserve calculations, the foundry TIF assumptions and the investment/fund balances that back upcoming capital projects; staff agreed to provide more granular fund-level breakdowns in follow-up briefings.