Council hears staff plan for a 3–12% revenue stabilization reserve; staff to draft resolution

City finance staff presented a proposed policy framework on Jan. 28 to create a general fund revenue stabilization reserve sized at 3% to 12% of sales and use tax and property tax revenue, a reserve intended to smooth year‑to‑year swings in volatile revenue sources.

"The goal of this reserve is to really be able to smooth peaks and valleys in our lehi predictable revenue sources," said Caleb, finance staff, describing the reserve as a budgeting tool distinct from the city's two‑month (16.7%) emergency reserve. Staff estimated the 3–12% range would equal about $3 million to $13 million based on 2025 budget figures.

Nut graf: Staff said the recommendation follows consultant work on revenue volatility and an internal review that found Greeley's revenue base is more volatile than national and Colorado medians, driven in part by a larger share of oil and gas assessments and development‑related sales taxes. Staff asked council for feedback on policy parameters and said it will draft a resolution and return with policy language for future adoption.

Key details from the presentation included: - Basis and sizing: Staff contracted PFM Consulting to analyze revenue volatility and cited comparative volatility work by the Pew Charitable Trusts; staff recommended sizing the stabilization reserve at 3%–12% of budgeted sales and property tax revenue (about $3 million–$13 million in 2025 dollars). - Funding and permitted use: Staff recommended flexible funding sources (year‑end surpluses, one‑time revenues, revenue above budget) and that use be tied to demonstrated general fund underperformance (for example, sales tax or property tax receipts below budget). Access would occur primarily through the annual budget process, with quarterly financial updates as an interim notification mechanism. - Replenishment target: If the reserve falls below the 3% minimum, staff recommended a three‑year target to replenish to the minimum level (faster than the city's current five‑year policy for the 16.7% reserve).

Council questions focused on scenarios and mechanics. Councilor Plater asked for clarity on when the three‑year replenishment would begin; staff said the replenishment target would be set based on budgeted revenues and accessed via the budget cycle. Councilor Weatherwood asked how much of the currently budgeted $11.8 million set aside for revenue stabilization remains available; staff said roughly $4.8 million is still available in the 2025 budget to seed the stabilization reserve.

Several council members expressed support for maintaining the existing two‑month emergency reserve while adding the proposed stabilization reserve. "The 2 month reserve is our emergency money. The revenue stabilization reserve is a different type of concept," Caleb said, adding the stabilization reserve is intended as a budgeting tool rather than the city's safety net.

Next steps: staff will draft a resolution reflecting the 3%–12% range, flexible funding methods, and a three‑year replenishment target to the minimum, then return to council with specific policy language and impact analysis during upcoming budget presentations and 2026 budget planning.

Ending: Council indicated general support and staff sought consensus to proceed with drafting the resolution and incorporating the proposal into future budget reporting; no formal vote was taken at the Jan. 28 meeting.