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Montrose officials advance preliminary 2025 budget after debate over utility rate increases and street funding
Summary
City of Montrose staff and councilors discussed proposed utility rate increases to close budget gaps, debated whether to make a larger immediate hike or incremental changes, weighed reallocating LGA for parks, capital and street work, and voted to advance the preliminary budget while staff completes arbitrage and county-certification checks.
City of Montrose staff told councilors that projected 2025 expenditures and maintenance needs for utilities and streets will outpace current revenues, prompting discussion of utility-rate increases and shifts in local government allocations.
Staff presented revenue and expenditure scenarios for stormwater and water utilities and said that at the current stormwater rate (referenced in the discussion as "775" per month) the city would face a projected shortfall; a 5% increase (to "814" in the discussion) narrows but does not eliminate the gap, staff said. Staff also flagged that individual stormwater ponds will eventually need dredging that could cost "20 $30,000" apiece and noted there are roughly 29 ponds to maintain. The presentation tied those maintenance forecasts to the city’s overall budget projections for 2025 and reserve planning.
Council debate centered on two approaches to rates: some members favored a larger, immediate increase to avoid repeated shortfalls, and one councilor urged the body to "rip the bandaid off now" so the city can "get ahead of it," arguing a bigger increase now would reduce repeated future shock to customers. Others warned a larger simultaneous increase across multiple rate categories could prompt significant customer complaints and preferred smaller, phased increases.
Beyond utilities, staff proposed keeping a similar Local Government Assistance (LGA) split as this year — roughly $140,000 to parks, $136,000 to capital and the remainder (about $459,000) to the general fund — and asked the council whether to reallocate. Councilors discussed using increased LGA or reserves for a larger streets program; one councilor suggested a $300,000 starting point for street work while acknowledging some needs could be $500,000–$600,000. The capital improvement plan currently lists $100,000 per year for streets, a level councilors said is unlikely to meet needs.
On debt management, staff cautioned against spending about $340,000 from a 2021 bond that is currently unused and under arbitrage review, saying the city should wait for an arbitrage report expected in the next two to three weeks before determining availability.
Councilors also considered a highway lighting project estimated at about $144,000 and discussed park surfacing (ADA-compliant wood chips versus rubber surfacing), which affects cost and maintenance. Several councilors supported shifting portions of LGA to cover capital needs, including lighting, trails and equipment for park maintenance, while trying to preserve routine park funding.
At the end of the session a councilor moved to advance the preliminary budget and the motion passed; the transcript does not record the exact wording of the motion. Staff will return with follow-up clarifications, including the arbitrage report and confirmation of how the county will treat any changes to certified budget amounts.
The council did not adopt final rates or a final budget in the discussion recorded here; the decision advanced the preliminary package so staff can complete the outstanding technical reviews and bring finalized figures back for a later vote.
