City seeks $10M for Halligan mitigation credits, delays CIS go‑live and proposes modest 2026 utility rate increases

City utilities staff briefed council on two 2026 budget revisions and a rates package tied to capital and operating needs. The first revision requested a $10,000,000 appropriation from water fund reserves to purchase additional environmental mitigation credits needed for the Halligan reservoir and dam work (wetland and stream impacts) so the Army Corps of Engineers can approve the mitigation plan and issue a Record of Decision. Utilities staff said those reserves would be replenished via a low-interest Colorado Water Conservation Board loan and later revenue bonds as part of the project’s funding stack.

On the customer information system (CIS), staff said the new billing software’s go-live date has been pushed from Oct. 2025 to May 2026. "This is not an increase in software cost or project cost for our new system," staff clarified; the requested revision would pay to continue legacy-system operations until the new system is ready.

Finance staff summarized proposed 2026 rate changes—electric about +6%, water about +9%, wastewater about +8% and stormwater about +6%—driven by higher O&M and capital-replacement needs (purchase power wholesale costs and water/wastewater capital projects). Staff emphasized utility affordability tools: income-qualified reduced rates (up to 25% off), one-time payment assistance, conservation and partnership programs to reduce bills, and planned outreach and ordinance introduction Nov. 3 if council approves the package.

Council asked whether purchased mitigation credits are legitimate; staff stated the two mitigation banks named are regional and Army Corps-approved and noted oversight from EPA and U.S. Fish and Wildlife Service. Council also discussed water-main replacement backlogs (staff said current replacement rates are below a 1% benchmark and may be near 0.5%) and confirmed the city will use debt structuring to smooth rate impacts for large capital projects.