Broomfield officials warn flatter revenues, $6 million property-tax hit and tighter budgets in 2026 draft

BROOMFIELD, Colo. — City and County of Broomfield finance staff on Tuesday told council members the city’s preliminary 2026 budget outlook is “fragile,” with revenue pressures from slower consumer spending, high interest rates and recently adjusted property valuations.

Jeff Romine, the city’s economist, told the study-session meeting that staff now views the outlook more conservatively than earlier this year. “We have moved from stable but fragile into fragile,” Romine said, summarizing the updated revenue outlook.

That shift matters because the general fund depends heavily on three local revenue sources — sales tax, use tax (including vehicle-related use tax) and property tax — which together fund police, library, human services and other core services. Finance Director Graham Clark and Budget Manager Nathan Mosley outlined the department-level process staff are using to align spending with expected revenues.

Why it matters: staff described a near-term revenue pullback for 2025 and 2026 that will change departments’ baseline assumptions and could limit new initiatives. Romine said sales-tax receipts are projected to be essentially flat for 2025 compared with the previously adopted budget, producing what staff characterized in follow-up discussion as roughly a $3 million reduction for the current year. Property-tax collections — which reflect 2024 valuations billed in 2025 — are expected to fall more sharply between 2025 and 2026, with staff estimating about a $6 million decrease tied to legislative changes to assessment rates and recently completed assessor valuations.

Key details from the presentation

- Sales and use taxes: staff said consumer spending is softening and that some localized categories — for example grocery receipts tied to a local King Soopers strike earlier in the year — produced lower-than-expected quarterly returns. Romine said use-tax receipts from vehicle purchases have outpaced building-materials use tax in recent years and that vehicle-related receipts are sensitive to interest-rate changes and tariffs.

- Property tax: staff reported that the assessor’s June 30, 2024 valuations produced an average decline of roughly 5% in Broomfield and that a combination of lower assessment rates (set by the state legislature) and assessed-value declines accounts for most of the roughly $6 million 2026 shortfall projection. Romine emphasized that appeals and later adjustments could change the final numbers.

- Overall revenue picture: Clark summarized staff’s current working estimates as a roughly $3.5 million revenue reduction for the current year and a further roughly $4 million net reduction projected for 2026 after partially offsetting changes in sales and building-related use taxes.

Planned actions and timeline

- Staff told council that departments have submitted base budgets and that supplemental requests are due in mid-May; finance will continue to refine revenue projections and bring updated drafts to council in August, with a preliminary proposed budget expected in early September and formal adoption in October.

- Nathan Mosley, budget manager, said the organization will continue to follow its “bucket” methodology (mandates, obligations, critical needs) and maintain a 20% operational reserve goal while limiting new initiatives where feasible.

- Graham Clark, finance director, said staff will pursue a mix of cost controls, including reductions in travel and training (estimated conservatively at about $1 million in possible savings), reviewing professional services and scrutinizing personnel-related expenses. “The next 24 months will require a lot of financial discipline,” Clark said.

Capital, enterprise funds and other items

- Staff indicated plans to issue bonds, including a general-obligation bond for the police (and related court remodel timing) and two bonds for water and wastewater projects; enterprise fund debt and rate planning are being handled separately through the enterprise budgeting process.

- An enterprise resource planning (ERP) system replacement remains scheduled for implementation planning in 2026; staff described the ERP as an accuracy and transparency investment rather than a near-term headcount savings measure.

Council questions and staff responses

- Council members asked about service-level tradeoffs, vacancy management and workforce and human-services implications if federal or state grant funding were reduced. Staff said they are modeling scenarios, coordinating with department heads and will return with options when revenue impacts are clearer. City and County Manager Hoffman and members of the executive team emphasized that staff are working to address known near-term shortfalls now while preparing for a range of possible federal or state changes.

- Development and recovery: Romine and other staff noted some sources of future revenue improvement tied to planned and approved developments — including work at Flatirons Crossing and other projects that staff expect to begin generating increased receipts in 2026–28 — but said those gains are not guaranteed and are part of a longer-term, conservative forecast.

What staff did not decide tonight

- Council did not adopt any budget or take formal votes on cuts, staffing or bond issuance during the study session. Staff presented projections, asked for council direction about priorities, and outlined next steps for the formal budget process.

Ending

Staff will return with updated revenue forecasts and draft budget proposals later this summer as departments and auditors finalize 2024 actuals and as the city continues monitoring federal, state and national economic developments.