Arvada presents 10-year budget and CIP; sales-tax change, street maintenance and 70 Second Avenue loom

Mr. Archer, a city budget presenter, told the Arvada City Council that staff was presenting 10-year operating and capital financial models as the start of this year’s budget process and that the figures shown were preliminary, not final or recommended. “Tonight, we are here to present to you 2 different sections of our budget. 1 being our operating and 1 being our capital,” he said.

The presentation showed a range of near‑term pressures — slower sales‑tax growth, employee pay and benefit gaps, and rising health‑care costs — alongside planned capital work including the 70 Second Avenue project, ongoing water and wastewater projects and work on bridges, traffic signals and parks. Staff said the end of the 10‑year general fund projection is modestly positive (about $7 million) after adjustments, but earlier changes to revenue assumptions reduced projected receipts by about $14 million versus the previous model.

Why it matters: the sales‑tax outlook drives both the general fund and the city’s capital program. City staff said they reduced the 2025 assumed sales‑tax growth to 1% from roughly 2.1% previously, a change that lowers available operating revenue and the sales‑tax‑backed capital pool used for major projects. That reduction flows through the 10‑year model and affects decisions about staffing, maintenance and whether to issue debt to complete large capital projects.

Key figures and priorities

- Sales tax: staff lowered the 2025 assumed growth rate to 1% (previously ~2.1%), a change that lowers projected general‑fund receipts over the 10‑year horizon by about $14 million. - Ten‑year general fund position: staff reported the 10‑year model now ends roughly $7 million positive after changes and closeout of 2024 actuals. - Salary and benefits: human resources recommended a roughly 4.3% salary range adjustment for next year; the budget currently includes 2% and assumes 100% of eligible step increases. Mr. Archer said the 2% number has been used historically but noted staff is “feeling pressure” on recruitment and retention. - Health care: projections show an 8% increase in health‑care costs; the model currently uses 5% as a working assumption but staff said they expect to refine that and may propose plan design or out‑of‑pocket changes to limit increases. - Street maintenance: staff described ongoing capacity constraints in the Street Maintenance program and said the department estimates it generally needs to add personnel for roughly every $1 million–$1.5 million of additional funded work to manage contracts, inspections and engineering. Council members urged a long‑term plan; staff noted the previous council direction added $2.4 million one‑time and $400,000 ongoing for street maintenance in 2024. - 70 Second Avenue: staff listed an all‑in budget estimate around $97 million for the project and said a current funding gap is roughly $28 million; additional debt issuance is being considered, and staff said any COP issuance originally planned for 2025 is likely to be pushed into 2027 depending on railroad negotiations and project timing. - Water/wastewater: staff noted a planned bond issue around $95 million in 2025 and ongoing work on distribution, pump stations and treatment‑facility replacement. The utilities group will return with rate and system‑development charge updates this fall. - Stormwater and solid waste: stormwater ends the 10‑year model with about $2.9 million available to program; solid waste met fund balance goals and staff tracked a potential cart‑replacement window around 2031–2032 that could be cash‑financed depending on future contracts and potential producer‑responsibility funding.

Council discussion and staff responses

Council members pressed staff for clarifications on health‑care options and the effects of benefit changes on recruitment; Mr. Archer said the city will examine plan design, out‑of‑pocket maximums and coinsurance splits with a benefits consultant. Council members asked staff to separate inflationary growth from unit growth in revenue forecasts; one council member suggested a clearer decomposition of how much revenue growth is attributable to price inflation versus new economic activity.

On street maintenance, council members expressed surprise at the staff estimate that each additional $1–1.5 million in annual work could require new staffing to manage implementation and inspections. Staff said they would revisit the capacity estimate with the street maintenance team and return with clarifying detail.

Parks and public‑safety increments

Parks staff have pushed the parks fund negative later in the 10‑year window (projections move to negative fund balance starting in 2034 without additional action), but staff said recent measures and fee adjustments have delayed that decline. Tax‑increment (TI) funds for police services were reported as above fund balance goals and will be available for programming; evidence‑storage and radio/computer replacements were reported as funded or planned.

Capital program and contingencies

Mr. Archer reviewed the city’s capital plan and the 0.01 sales‑tax set‑aside that flows to debt and capital (referred to in the presentation as “98 1 0 1”), noting that reduced sales‑tax growth trims available CIP dollars. The presentation identified three large CIP commitments tied to bond payments or projects (70 Second Avenue, Ralston Road/Myers Pool and the Arvada Aquatic Center) and said the city is holding reserves to cover those priorities while it finishes design, negotiates with the railroad and plans debt issuance.

Staff said certain federal grants and appropriations are expected but not yet finalized; for one park project staff said they expected to know more in September and that contingency plans are being developed in case grant dollars are delayed or reduced.

Next steps

Mr. Archer said staff expect to deliver the city manager’s recommended budget in August and to return this fall with workshops and readings; staff will refine health‑care and salary assumptions, bring additional detail on CIP priorities and present proposed debt issuance timing. “We just wanna continue to get your input, get your direction, and then, you know, we'll be bringing these budget decisions to you later this fall,” he said.

Votes at a glance

- Council voted to excuse Mayor Simpson from the meeting. Staff recorded six members in support; the motion passed and Mayor Simpson was excused. (Tally recorded in the meeting: yes 6, no 0, absent 1.)