City finance staff on Saturday told the Aurora City Council that while 2024 closed with a small operating surplus, capital revenues fell sharply late in the year and the city still faces an estimated $11.5 million shortfall in 2026.

Greg (staff member, finance) briefed the council and said, “The numbers don't settle down until around March,” warning that forecasts presented in mid-January are preliminary and subject to change. He reported a roughly $2.6 million net positive on the operating side for 2024 but said capital revenues were about $5 million below expectations, largely because building-material-use and impact fees dropped in the last quarter.

Why it matters: Aurora's operating budget depends heavily on sales and use taxes. Council members pressed staff about where any additional cuts or new revenue might come from, and staff outlined options that would affect services and personnel. Greg summarized the arithmetic plainly: personnel (personal services) is about 64% of general-fund spending, and without a mix of revenue increases and programmatic changes, reductions are likely to affect service levels.

Key revenue and expenditure details
- Sales tax: ended 2024 at about 3.7% growth versus a projection of 4.5%, producing a roughly $2.1 million shortfall versus forecasts. Auto use tax finished about $1.9 million (6.4%) below projection. Audit recoveries and other miscellaneous revenue added roughly $3.3–3.4 million and another $3.2 million, respectively, producing the modest operating surplus.
- Capital revenues: Greg said capital revenue fell off sharply in the last quarter, leaving the capital projects fund some $5 million short for the year and causing concern for the five-year capital plan because missing year-one revenue can ripple through 2027–2030.
- Impact fees and funds: Capital impact fees fell about $3 million from the prior year. Greg said some enterprise and restricted funds (golf, CTF, recreation, parks development, cultural fund, development review) performed better than expected, but fleet and risk funds, among others, showed pressure that staff will continue researching.

Council questions and options under consideration
Council members asked about several options staff listed as potential levers for balancing 2026, including:
- Programmatic reductions rather than across-the-board cuts. Greg said the assumption is programmatic reductions will be prioritized, but council will make final policy choices.
- Shifting costs between funds (for example, moving eligible expenses off the general fund and onto enterprise or dedicated funds where legally permitted).
- Timing or deferral of opening planned capital projects such as a proposed fire station; staff noted not opening one planned station could save roughly $2.5 million in personnel and startup costs in 2026.
- Sending certain domestic-violence cases to county court, an action council has directed and which staff estimated could yield up to $3 million in savings if corresponding staffing changes are made; staff cautioned those savings will materialize in later budget years as cases work through the system.
- Federal grants: Aurora Fire leadership said they are pursuing FEMA SAFER grant funding that could provide temporary payroll support to staff two planned fire stations (staff described a federal SAFER grant request that would cover roughly $5 million per year across the city for up to three years, if awarded), giving the city time to secure other revenue for ongoing costs.

Revenue-raising suggestions discussed
Council members and staff discussed revenue paths the city could study further:
- Adjusting the lodging (hotel) tax; staff said Aurora's current lodging tax is 8% and that roughly $1.0 million of revenue is generated per percentage point. Council members discussed placing an increase on the ballot and the possibility of working with exempt properties (named in the meeting) to capture some of the incremental revenue if a ballot measure moves forward.
- Re-examining existing retail and sales-tax exemptions (staff cited food for home consumption and prescription drugs as large exemptions) and potential targeted fee increases, including annual indexing of development fees and looking at a commercial transportation impact fee in places where the city charges residential impact fees but not commercial.
- Property-tax changes including debrucing under TABOR if council chose to pursue voter approval; staff noted the city returned roughly $17 million last year under TABOR calculations (a debrucing discussion would require voter action and coordination with county and state rules).

What council directed and next steps
Council did not take formal votes at the workshop. Staff recorded council interest in staff returning with:
- Updated revenue forecasts after the January/early-March collections and lead's projection, and a final 2024 close.
- Detailed lists of programmatic savings options, quantified estimates of vacancy-savings potential, and the timing for when any savings would materialize.
- A list of revenue options and legal/ballot steps needed for each (lodging, targeted fees, potential exemptions to revisit) and economic-impact analysis for any proposed tax changes.
- Additional detail on specific funds (youth violence prevention program, homelessness programs, marijuana tax allocations) where several council members requested clarifying breakdowns of underspending and expenditures.

Council members repeatedly cautioned that public-safety services are a policy priority for many on the council; several members said they would be reluctant to cut core police or fire services and asked staff to prioritize non-public-safety reductions and vacancy-savings where feasible. Staff said they will return in the spring workshop with refined projections, recommended implementation steps and updated fiscal scenarios for council review.

Ending: Staff emphasized that the figures were preliminary and likely to change as final collections and year-end bookkeeping are completed; the council scheduled follow-up briefing and asked staff to come back with the requested detail in advance of formal 2026 budget decisions.