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Commerce City reports third-quarter gains; sales and use tax up amid one large permit
Summary
Finance staff told council that third‑quarter revenues are trending positively: sales and use tax rose 13.2% year‑to‑date (9.6% excluding a one‑time $2.5M construction permit). Expenditures are generally on track, ARPA reappropriation and timing of debt payments will alter year‑end results.
Finance Director Teresa Wilson presented the third‑quarter 2025 financial report to the City Council, saying general fund revenues and expenditures are largely tracking as expected and highlighting several near‑term items that will affect year‑end results.
Wilson reported that, through the end of the third quarter, “sales and use tax revenues have increased by 13.2% over ’24,” while noting that without a single large construction permit that produced roughly $2.5 million in use tax the increase would be about 9.6%.
Licenses and permits are above budget largely because of that one large, out‑of‑the‑ordinary building permit, Wilson said, and intergovernmental revenues reflect ARPA reappropriation as the city spends those funds through next year. She flagged that investment earnings are conservative and subject to market adjustments at fiscal year end.
On the expenditure side, Wilson said most categories are where the city would expect them to be at the quarter point; she called out a modestly ‘wonky’ debt‑service profile owing to the timing of certain COP payments in August and December. Year‑to‑date general fund expenditures are slightly under budget, which staff monitors to avoid tying up funds unnecessarily.
Council members asked whether marijuana tax declines are linked to legalization in other states; staff said medical marijuana revenues fell when retail legalization expanded elsewhere and that Colorado’s initial spike during COVID has normalized. Staff also reminded council that, under current tax code, incentive refunds are processed after taxes are remitted and recorded.
Wilson said the popular annual finance reports (ACFR and related publication) will be delivered following the preliminary audit and the statutory audit next spring, with the '25 ACFR expected in mid‑2026.
Council and staff noted the financial picture creates an opportunity to reassess fee and tax competitiveness to better attract small businesses while maintaining service levels.
Next steps: staff will continue quarter‑to‑quarter monitoring, provide anticipated fourth‑quarter adjustments and return with any policy options council requests related to incentives or fee‑setting.
