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Pueblo presents 2026 budget with $11.9M projected fund-balance decrease; personnel and capital priorities outlined
Summary
City finance staff presented the proposed 2026 budget work session, showing a revised projected fund-balance decrease of $11.9 million, assumptions including a 1% sales‑tax decline and 5.8% health‑insurance increase, proposed pay adjustments and a mix of cuts and reclassifications for nonprofit contracts and positions.
Finance staff led a 90‑minute work session Monday to walk the council through the proposed 2026 budget and the underlying assumptions.
Heather Graham Mayer said the updated B1 reduces the projected deficit from $12.5 million to $11.9 million after accounting for staffing and classification changes. Key assumptions include a projected 1% decline in sales tax revenues, a 5.8% increase in health insurance costs (about $1.4 million), and use of interest from the half‑cent sales‑tax account to cover two large items (City Annex payment and PMJC HVAC), which staff said will not hit the general fund.
On personnel, staff said there will be no net new positions for 2026; five community‑service officer (CSO) positions were added earlier in 2025 and five sworn officer positions were frozen (unfunded) for the 2026 proposed budget, accounting for a roughly $600,000 change in funded police positions. The administration proposed a 3.25% pay increase for appointed management and other negotiated increases for police and fire. Several grant‑funded positions and a non‑profit compliance coordinator were identified for abolishment or reassignment as part of the rebalancing.
Staff also reviewed non‑departmental contractual changes, an increase in CSAC funding (matched by the county to $1.1 million total), and a proposed capital plan that relies on several revenue streams (highway user trust fund, lottery/conservation trust funds, enterprise funds) with approximately $4 million for resurfacing and $21 million in enterprise projects for stormwater and wastewater. Staff noted roughly $3.5 million in annual interest generated from the half‑cent sales‑tax interest that can be applied to capital projects.
Council asked many technical questions about line‑item allocations, vacant budgeted positions (staff reported 106 vacancies citywide as of Oct. 2025, 40 of them police positions), contract renewals moving to three‑year terms, and whether lodging‑tax projections are sustainable (staff cited recent increased compliance and collections). A public hearing on the budget is scheduled for Oct. 27; first reading of the budget is set for Nov. 10 and final adoption Nov. 24, unless council requests additional work sessions.
