Gunnison council advances tentative 2025–26 budget, opens truth-in-taxation process and advertises city water-lease

The Gunnison City Council on May 7 advanced its tentative fiscal year 2025–26 budget, opened the truth-in-taxation process that could capture recent property-tax growth, and authorized advertisement of a three-year lease of city water rights the city acquired earlier this year.

Council members voted to approve bills totaling $234,003.42 and to advertise a proposed water-user lease. The council also moved to adopt Resolution 2025-06 to publish the tentative budget and begin required public-notice steps for truth-in-taxation; the final budget remains subject to further revision and must be adopted before Sept. 1.

The items matter because the tentative budget sets the framework for the city’s revenue and reserve plans for the coming year, including a new meter-replacement reserve and a potential property-tax capture that would increase average household costs if the council chooses to keep newly available tax revenue. The advertised water-lease, meanwhile, would make excess water shares available to other users under a three-year agreement provided the city does not need the water for municipal uses.

Council members and staff said the tentative budget was prepared by City Manager Dennis with assistance from finance staff including Gary Hennington and that the council spent several hours in a work session reviewing details before the meeting. As presented, the budget includes a $75,000 line-item described as a meter-replacement reserve intended to begin funding future wholesale replacement of aging water meters. Staff told the council the city is tracking a long-term replacement need that they estimated could total about $1.2 million over a multi‑year horizon; council members noted the replacement schedule would likely be spread out rather than a single simultaneous failure of all meters.

On the property-tax discussion, staff explained the mechanics of truth in taxation: the city operates from a baseline property-tax dollar amount (discussed in the meeting as about $250,000 in the current example) and may elect to request the baseline plus recent ‘‘new growth’’ dollars that otherwise would lower the tax rate if the city leaves its request unchanged. Capturing the recent new-growth dollars in the current proposal was presented as the reason the council is considering a truth-in-taxation notification now. Council discussion included an estimate that the additional capture under the proposed approach would equate to roughly $6 per month on average per household (the actual impact varies by assessed value) and repeated cautions that the final figure will depend on the council’s choices before the final budget.

Council members discussed timing and process: if the council determines there is a possibility of adopting truth-in-taxation, state rules require a public-notice timeline beginning before June 1 and a public hearing (anticipated at an early June meeting) before the council can finalize any tax decision. Staff noted the final budget adoption deadline is before Sept. 1 and that the council can continue to revise the tentative document after the public hearing.

Separately, the council reviewed a draft water-user agreement for leasing excess water shares the city purchased in January 2024. Staff said state law prevents the city from selling municipal water rights but permits leasing excess shares that are not needed for city service; the proposed contract is drafted as a three-year agreement that would deliver water only when it is surplus to city needs. The council voted to advertise the proposed lease so interested parties may submit bids or inquiries.

Actions at the meeting included multiple procedural votes. The council voted to pay the bills presented, approved advertisement of the water-lease, adopted the tentative-budget resolution for public notice, and closed the public hearing on the tentative budget to move to deliberations. The council did not adopt a final tax increase at the May 7 meeting and left the matter open for further public comment and adjustment before the final budget vote.

The council’s next steps include a public hearing on the tax proposal in early June (notice required if the council proceeds with truth-in-taxation), further budget refinements between now and the final-adoption window this summer, and the open advertisement period for the water-lease. Staff said they will provide detailed line‑item backup and any updated meter-cost projections requested by council members.

Votes at a glance: - Motion to pay bills ending 05/02/2025 totaling $234,003.42 — motion moved and seconded; recorded board assent during the meeting, outcome: approved. - Motion to advertise a three-year lease of excess city water rights (water-user agreement) — motion by Councilman Crane, second by Councilman Warner; recorded yes votes: Childs, Warner, Crane, Kiel; outcome: approved. - Motion to adopt Resolution 2025-06 (tentative FY2025–26 budget) and initiate required truth-in-taxation notice — motion moved by Councilman Crane; action taken to publish and schedule public hearing; outcome: adopted for public-notice purposes (final adoption pending).

Context and next steps: the council emphasized that the tentative budget is a work-in-progress and that the truth-in-taxation notification does not by itself finalize a tax increase. Staff and council members urged residents to review the budget documents and attend the scheduled public hearings when notice is published.