OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

City Council Budget Work Session: Review of Mayor's Proposed 2026 City Budget - October 15, 2025

City Council — Wednesday, October 15, 2025
BodyColorado Springs, Colorado
SessionCity Council
DateWednesday, October 15, 2025
StatusFILED
Video Record
0:00 / 4:10:35

Transcript — Verbatim
0:19

Good morning.

0:20

Welcome to the city council budget work session.

0:23

We are now in session, and I would like to have the clerk please roll call the roll.

0:31

Councilmember Bailey.

0:33

Here.

0:33

Councilmember Iverson.

0:34

Here.

0:35

Councilmember Donaldson.

0:38

I'm here.

0:39

Councilmember Gold.

0:41

Excused.

0:44

Councilmember Henjam.

0:46

Present.

0:46

Councilmember Williams.

0:49

Here.

0:50

Councilmember Linewever.

0:52

Excused.

0:55

Councilmember Rainey.

0:57

Excused.

0:58

Councilmember Misley.

1:00

Here.

1:04

There we go.

1:07

Six members present, three members excused.

1:10

I will now turn it over to Sheree McDaniel, the chief financial officer for the city, um, to start our budget work session.

1:18

Great.

1:18

Thank you so much.

1:19

Um, good morning, honorable members of city council.

1:22

Thank you so much for being here.

1:24

And as we move through the 2026 budget process, and I wanted to uh first just introduce the staff that we have here from the finance department.

1:37

We have Carly Coates in the budget office, Cindy McLaughlin, she's the city's grants writer, but is supporting us here today, and Jen Vance grants, I'm sorry, budget manager.

1:47

Who taking you back?

1:49

Um, so I want to say thank you for them to be here today.

1:52

And obviously, we have a lot of other uh city staff here supporting uh through the budget process, and you'll be hearing from a number of them.

2:02

I also want to just um thank City Council for the extra time and meetings that we've had through uh this budget process and being able to talk through various subjects at your council lunches.

2:15

I really appreciate the time that uh you've allowed for that.

2:19

I think uh for me it's been very helpful, and I hope it has for you as well.

2:23

And I hope that then as we move through this, we will have you know the backup and context around uh some of those conversations as we move through the budget process.

2:33

So thank you for that.

2:34

I appreciate it.

2:37

So, what are we gonna do today?

2:39

Our plan today is we will have um, I will present an overview of the budget.

2:45

So I'm gonna be talking about revenue expenditures, grants, special funds to give you a little bit of context and information about the bigger picture and the funds that will be included in the budget that you'll be um asked to appropriate approve and appropriate.

3:02

Then we will hear from the police department and the fire department and what they're and then in the afternoon we'll have a break for lunch, and then the afternoon we're gonna hear from parks, recreation, cultural services, and then public works.

3:13

And so what we've asked them to do, and you'll see a very similar format for each of these presentations.

3:20

They're gonna talk about their department as a whole, uh, all of their funding sources, the positions, what changed from last year to this year, to give you the uh kind of global view of each of those departments, and then kind of what are their priorities coming into 26, what are they going to be able to do in 26 for your information and context as we then move through the approval process.

3:46

And we'll talk about uh what happens after today as we move through as well, which is today we have um, I'm sorry, I'm gonna back up a little bit.

3:59

I wanted to give a little bit of information on the budget development process as a whole, so that you just have a little context on you know where are we in the process, what has come before, where do we go from here?

4:13

And we start the budget process in about April or May.

4:18

And what we're doing in uh the budget office is putting together kind of the guidelines for the department that the departments will follow as we move through the budget process and any expectations that we may have even early in the year as far as what it's gonna look like as we move through the current year and as we start budgeting into the next year.

4:39

We do have a capital improvement program, RCIP.

4:43

We have a prioritization committee, so all of the departments that have capital projects participate in a committee where they're bringing forward their highest priority capital projects.

4:55

Those are getting prioritized.

5:00

And then as we have funding available or not, we are able to include the uh include the high priority items through the general fund and then obviously other funding sources, and we're gonna talk about that.

5:12

In June, we have the departments tell us what are their uh budget needs for additional funding.

5:18

We call those unfunded budget requests, and that is what do they need uh additional budget for, what would they like to have additional budget for, their priorities in each department.

5:29

We go through a prioritization process at the end of July with the departments, and so in years uh where we're like 26 where we have less money, it's actually not prioritizing new things, it's prioritizing what's the most important thing to try to either keep or uh try to protect as as we move through a sort of city priorities that we want to impact the least, and the then we have that kind of conversation rather than what can we do with additional money.

6:01

We're talking about how do we accommodate less money.

6:06

And we have had um starting in July is when we started the meetings with the council and going through into August and September and even um into October, and we then ideally at the end of August, sometimes like this year, beginning of September, we are on the administrative side uh coming to a balance on the budget.

6:27

So considering are there any unfunded budget needs that are priorities that we have to fund?

6:33

We have a lot of unavoidable expenditures that we have to include insurance um benefit changes, pension changes, and then we come to a balancing, and then we uh had we had the council mayor retreat, and then we start having uh the preview meetings with the city council, and we you know can are communicating obviously with the departments about what's in, what's not in, and then um we lock the budget team in their offices and they prepare the document that you see before you and that you all have.

Discussion Breakdown — Share of Meeting
Budget Equity Analysis█████████████████████████████████████████████45%
Public Safety███████████████████████23%
Parks And Recreation████████8%
Personnel Matters██████6%
Procedural████4%
Fiscal Sustainability████4%
Technology and Innovation███3%
Economic Development██2%
Transportation Safety█1%
Summary of Proceedings

City Council Budget Work Session: Review of Mayor's Proposed 2026 City Budget - October 15, 2025

On October 15, 2025, the Colorado Springs City Council held a special budget work session to review the Mayor's proposed 2026 city budget. The session began at 9:00 AM and included a morning overview by Chief Financial Officer Charae McDaniel, followed by presentations from the Police and Fire Departments. After a lunch break, the Council heard from the Parks, Recreation, and Cultural Services Department and the Public Works Department. Six council members were present; three were excused. The meeting focused on revenue projections, expenditure reductions, department priorities, and the process for finalizing the budget.

Discussion Items

Budget Overview and Revenue Forecast

  • CFO McDaniel presented the general fund revenue forecast, highlighting a 1.4% increase in sales tax from the 2025 end-of-year estimate (from $247.7M to $251.7M), but a budget-to-budget decrease of $9.8M from the 2025 original budget. Total general fund revenue decreases by $11M.
  • Property tax revenue is projected to decrease by $2M, with a total mill levy credit of 1.27 mills to refund $3M collected in excess in 2024 and keep 2026 under the TABOR cap.
  • Councilmember Risley expressed concern about projecting an increase from 2025 actuals, advocating for a flat budget, citing conversations with local business owners and the government shutdown. Councilmember Rainey echoed concerns, referencing flat revenue projections from the regional building department.
  • Councilmember Donaldson supported the CFO's estimate, noting her use of Bloomberg, CBO, and University of Michigan forecasts, and stated he was satisfied with the 1.4% increase. He emphasized the city's healthy fund balance (projected at 19.8% of 2026 expenditures, above the GFOA standard of 16.67%) and the importance of putting funds to their highest use.
  • CFO McDaniel clarified that the 1.4% increase was based on national consumer spending indicators and professional judgment. She noted that the fund balance could serve as a contingency if revenues fall short, but the administration prefers to adjust expenditures rather than draw on reserves.
  • Councilmember Bailey raised interest in exploring outcome-based budgeting or zero-based budgeting. CFO McDaniel explained that a transition would require a consultant and system changes, but the city uses a modified zero-based approach. Councilmembers Hincham and Donaldson discussed the mayor's authority over budgeting processes.

Compensation and Benefits

  • The 2026 budget does not fund market movement or pay-for-performance for civilians, but provides up to 2% pay progression for eligible employees below the market average. Sworn personnel in police and fire receive step increases (1.3% average for fire at $662k, police at $1.5M).
  • The city absorbed a 6.2% medical cost increase ($2.4M) to avoid passing costs to employees. Chief Human Resources Officer Myra Romero expressed concern about retention but noted a softening job market.
  • Unavoidable expenditure changes total $8.5M for compensation and benefits, offset by $12.9M in departmental reductions, resulting in an overall $11M decrease in general fund expenditures.

Police Department (Chief Adrian Vasquez)

  • Total 2026 all-funds budget: $179.9M (82% general fund, 15% PSST, 3% grants). Authorized sworn strength is 839, but budget reflects 829 (10 paid by airport). 13.75 civilian positions are frozen.
  • Reductions include RIFs of two crime lab chemists (testing moved to CBI), consolidation of fleet and facilities (6.75 positions transferred), and elimination of one photo enforcement technician. Overtime is being scrutinized, especially in community engagement, while minimum staffing for safety is maintained.
  • Department priorities: staffing (target of 1,000 officers), technology (Axon, drone as first responder), alternative fees (alarm registration, records fees, a proposed public safety technology surcharge on citations), and balancing public safety with community sense of safety (e.g., homelessness issues).
  • Councilmembers questioned the delay of police academies; Chief Vasquez confirmed three academies in 2026 are still planned but started two months later to save costs.

Fire Department (Chief Randy Royal)

  • Total 2026 all-funds budget: $108.9M (95% salary/benefits). Non-labor budget reduced by 28% ($1.4M) to $3.5M.
  • Reductions include elimination of one training academy (saving $1.6M), attrition/furloughs ($500k), and transfer of fleet/facilities ($900k). A $1.7M recovery from the 2024 reduction was restored.
  • Department priorities: new fire stations (needs four, starting with two near Highway 94/24 and Banning Lewis), apparatus replacement ($15M need), staffing (100 additional sworn for new stations), advancing the tiered response model, wildfire response, and health screening (cancer detection costing ~$150k/year), partially funded by community foundations.
  • Chief Royal noted PSST funds are maxed out for operations and cannot support new capital. Councilmembers expressed concern about the canceled academy; Chief Royal said a smaller academy may be possible in late spring if revenue improves.

Parks, Recreation, and Cultural Services (Director Britt Haley)

  • Total all-funds budget: $64.6M (enterprise operations 34%, general fund 26%, TOPS 13%, conservation trust 10%, etc.). General fund portion is $17.1M, reduced by $3.18M.
  • 34.75 FTE positions eliminated, including closure of Meadows Park Community Center (7.5 FTE) and loss of Harrison School District 2 contract (25.25 FTE). Aquatics facility repair funding for Portal Pool and Wilson Ranch Pool was eliminated.
  • Capital projects funded by enterprises ($4.18M for Pikes Peak America's Mountain improvements) and TOPS ($2.53M for Fishers Canyon trails, La Feyere Trail). No general fund or conservation trust capital funds were allocated for 2026.
  • Council discussed the impact of the Harrison School contract loss on before/after school programs and the lack of funds for Cragmor neighborhood park improvements, though a mining reclamation grant may be available in 2027.

Public Works (Director Richard Mullady)

  • Total all-funds budget: ~$370M (general fund $53.2M, PPRTA $114M, grants $74M, stormwater $31.5M, etc.). General fund portion reduced by $738k in operating and $3.9M in capital (by finding alternative match funding).
  • 5 filled positions eliminated (3 general fund, 2 grant-funded at Mountain Metro Transit). 10.75 positions remain unfunded, but unfilled vacancies in 2025 (36) are being reduced to maintain infrastructure.
  • Budget reductions achieved through keeping positions unfilled, furloughs, and operating cuts. Capital projects are preserved via alternative funding.
  • Department priorities: minimize staff impacts, provide resources for pothole filling, snow plowing, road/bridge maintenance, deliver capital projects, maintain current service levels for Mountain Metro, stormwater, and parking, and keep the city clean and urban forestry healthy.
  • Councilmember Donaldson expressed appreciation for the work of public works operations and maintenance.

Key Outcomes

  • This work session was informational; no formal votes were taken.
  • The public hearing on the 2026 budget will be held at 5:30 PM on a future date (likely October 22 or 27, 2025), followed by a budget markup session on October 29, 2025, where council members can propose changes. Proposed changes must be submitted by October 24 to allow consolidation.
  • Changes made at the markup session will be incorporated into the budget ordinance, which will be voted on at the regular council meetings on November 10 and November 25, 2025 (two readings).
  • CFO McDaniel requested that any proposed additions be offset by identified funding reductions to maintain a balanced budget.
  • The city will also bring forward a proposed public safety technology surcharge and changes to alarm registration fees for council approval at the October 27 work session.
  • Councilmember Bailey requested that enterprise funds (e.g., airport) be included in future lunch briefings to provide equivalent scrutiny.

Meeting Transcript

Good morning. Welcome to the city council budget work session. We are now in session, and I would like to have the clerk please roll call the roll. Councilmember Bailey. Here. Councilmember Iverson. Here. Councilmember Donaldson. I'm here. Councilmember Gold. Excused. Councilmember Henjam. Present. Councilmember Williams. Here. Councilmember Linewever. Excused. Councilmember Rainey. Excused. Councilmember Misley. Here. There we go. Six members present, three members excused. I will now turn it over to Sheree McDaniel, the chief financial officer for the city, um, to start our budget work session. Great. Thank you so much. Um, good morning, honorable members of city council. Thank you so much for being here. And as we move through the 2026 budget process, and I wanted to uh first just introduce the staff that we have here from the finance department. We have Carly Coates in the budget office, Cindy McLaughlin, she's the city's grants writer, but is supporting us here today, and Jen Vance grants, I'm sorry, budget manager. Who taking you back? Um, so I want to say thank you for them to be here today. And obviously, we have a lot of other uh city staff here supporting uh through the budget process, and you'll be hearing from a number of them. I also want to just um thank City Council for the extra time and meetings that we've had through uh this budget process and being able to talk through various subjects at your council lunches. I really appreciate the time that uh you've allowed for that. I think uh for me it's been very helpful, and I hope it has for you as well. And I hope that then as we move through this, we will have you know the backup and context around uh some of those conversations as we move through the budget process. So thank you for that. I appreciate it. So, what are we gonna do today? Our plan today is we will have um, I will present an overview of the budget. So I'm gonna be talking about revenue expenditures, grants, special funds to give you a little bit of context and information about the bigger picture and the funds that will be included in the budget that you'll be um asked to appropriate approve and appropriate. Then we will hear from the police department and the fire department and what they're and then in the afternoon we'll have a break for lunch, and then the afternoon we're gonna hear from parks, recreation, cultural services, and then public works. And so what we've asked them to do, and you'll see a very similar format for each of these presentations. They're gonna talk about their department as a whole, uh, all of their funding sources, the positions, what changed from last year to this year, to give you the uh kind of global view of each of those departments, and then kind of what are their priorities coming into 26, what are they going to be able to do in 26 for your information and context as we then move through the approval process. And we'll talk about uh what happens after today as we move through as well, which is today we have um, I'm sorry, I'm gonna back up a little bit. I wanted to give a little bit of information on the budget development process as a whole, so that you just have a little context on you know where are we in the process, what has come before, where do we go from here? And we start the budget process in about April or May. And what we're doing in uh the budget office is putting together kind of the guidelines for the department that the departments will follow as we move through the budget process and any expectations that we may have even early in the year as far as what it's gonna look like as we move through the current year and as we start budgeting into the next year. We do have a capital improvement program, RCIP.

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