Gunnison City staff detailed a tentative budget that proposes a $12 per month increase to the pressurized‑irrigation base rate, a $75,000 truth‑in‑taxation property‑tax request (roughly $6 per household per year by staff estimate) and multiple transfers from utility funds to the general fund to cover near‑term shortfalls.

The conversation, held as a staff luncheon/work session, focused on how to balance immediate operating needs and required capital work while rebuilding reserves that staff said have been drawn down substantially in recent years. Staff emphasized that the city is facing both one‑time capital costs and new, ongoing administrative expenses tied to state meter mandates and several large water and sewer projects.

Why it matters: Gunnison faces a mix of mandated engineering and reporting work, rising personnel and vehicle costs, and a stretched reserve position. Staff said those pressures make it likely the city will need a combination of fee increases, transfers from enterprise funds and limited use of reserves while seeking grants and partner funding.

Key details

Irrigation meters and new administrative costs: Staff said the city is in the final stages of installing metering hardware for pressurized irrigation. Beyond the capital cost of the meters themselves, staff highlighted a slate of operational changes required by state rules: monthly informational bills, an online customer portal, and a mandated tiered rate structure tied to metered usage. Staff estimated the city’s long‑term meter replacement obligation at about $1.2 million over roughly 15 years and said the tentative budget sets aside $75,000 per year toward a meter replacement reserve.

Staff also described near‑term irrigation fund allocations in the tentative budget: $25,000 toward the Dupont Springs building transition, $10,000 to start purchasing water rights, and $30,000 toward reserve funds for a future irrigation expansion. The proposed $12 monthly irrigation increase appears in the tentative figures as the largest single new household fee shown in the meeting discussion.

Truth in taxation and household impacts: The tentative budget includes a $75,000 “truth‑in‑taxation” request that staff said would translate to only a few dollars per household annually when spread across the city’s assessed base. In combination with the irrigation increase and other fee adjustments (staff estimated roughly $6 from property tax changes and $12 from irrigation), staff said the changes likely mean a roughly $18 per month increase for a typical household this year, depending on household billing specifics and which development or penalty fees apply to individual users.

Reserves, transfers and sustainability concerns: Staff and council members said the city has used significant reserves in recent years—largely to buy water rights and to cover capital projects—and that the tentative budget relies in part on transfers from the water and sewer enterprise funds to the general fund.

Specific transfers discussed included a $300,000 transfer planned from the sewer fund this year and a $50,000 transfer from the water fund into the pool fund along with $160,000 expected to come from water for park or skate‑park work. Council and staff repeatedly cautioned that repeated reliance on transfers to balance operations is not sustainable and said restoring reserves should be a priority.

Major capital projects and grant status

Tar Canyon water project: Staff said the city has state funding available of approximately $5.5 million (state DFCM funds) for elements of the Tar Canyon water project and is awaiting federal Rural Development (USDA) funding decisions that could add roughly $5 million. Staff said timing and scope will depend on how the state and federal pieces align and urged caution about starting work that would obligate grant funds the city might not be able to match.

Sewer pond and collection system: Staff said the city expects a multi‑year effort to repair and replace significant sections of sewer piping and the sewer pond infrastructure. The tentative budget contains placeholders for the work; staff said final costs will be clearer after an estimate expected next week and that the most likely course is staged spending over multiple fiscal years.

Pool, parks and other capital: The tentative budget holds $35,000 as a placeholder to evaluate pool options (including roof and mechanical work) and lists a larger parks capital line of roughly $489,000 that combines trail design, a community sign project and the sport‑court project. Staff said they have applied for several grants (state and private) to reduce the city’s share of those costs.

Public safety and fire: The draft budget assumes a small, $1 monthly increase in the local fire service fee that staff estimated would generate about $8,000. Staff also said the fire district plans to draw roughly $50,000 from its reserves this year and is pursuing a county partnership and grant funding for a brush truck that could reduce local capital pressure.

Other fee and service changes: Animal‑control fees would be amended to recover actual boarding costs; department staff emphasized that reclamation fees will be adjusted to include boarding and other pass‑through expenses. The budget also reflects rising employee benefit costs (including a one‑time URS payout in the current year) and a modest 2% cost‑of‑living adjustment for employees.

Process and next steps

Staff characterized the draft as the city’s tentative budget; the council must adopt a tentative budget to trigger required public‑notice steps and—if the council decides—the truth‑in‑taxation process. Staff said work will continue to refine department budgets (police was singled out for additional review), to firm up grant outcomes, and to present a final budget later this summer after public hearings and any required tax‑notice steps.

Council and staff repeatedly returned to a single practical point: Gunnison must rebuild enterprise and general‑fund reserves after heavy spending on water purchases and capital projects in prior years. Several council members urged blunt public messaging to explain why modest rate and tax changes are being considered now rather than deferring those costs until reserves are exhausted.

Ending

Council members and staff agreed to continue refining the tentative budget, hold the public hearing required for tentative adoption, and revisit department budgets (including a planned police board review) before the final adoption. Staff said they will continue to pursue grant funding to reduce the city share of major water, sewer and parks projects and will return to council with updated cost estimates and a refined revenue plan.