Fort Collins staff propose $15.4 million in general-fund reductions for 2026; managers recommend avoiding layoffs, preserving 2% pay increase

City staff presented a package of recommended reductions on the city’s 2026 general fund on Wednesday as part of a work session, saying a combination of lower revenue and higher costs has produced a $15.4 million budget gap.

The city’s finance team told council it expects $8.7 million in lower revenues, primarily from sales and use tax, and about $6.7 million in higher expenses driven largely by personnel costs and other inflationary pressures. "We are forecasting $8,700,000 in lower revenues," Chief Financial Officer Caleb Weitz said, and staff recommended a set of reductions and policy changes to close that gap without involuntary layoffs.

Staff recommended a mix of citywide personnel measures and service‑area reductions to reach $15.4 million in savings. The package would: preserve a 2% pay increase for 2026; avoid involuntary separations for classified and unclassified employees; eliminate 27 vacant positions; implement a phased release of the hiring freeze; and use a mix of ongoing and one‑time savings. Weitz described the broad elements as "a very difficult conversation" but said the plan is intended to protect jobs while restoring budget balance.

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