Lafayette City Council Study Session – June 23, 2026: Economic Outlook, Bond Projects, and Council Norms
Lafayette City Council Study Session – June 23, 2026
The meeting focused on a financial outlook presentation, an update on capital bond project implementation, potential policy updates to the investment policy and purchasing procedures, and a discussion on council meeting norms to improve efficiency. No formal votes were taken; decisions were reached by consensus.
Economic & Revenue Update
- CFO Heather Balzer presented national and state economic indicators: U.S. unemployment slightly higher than Colorado; employment growth slowing; household savings declining to about 3.6%; credit card and other delinquencies rising; inflation in the Denver area between 4–5% in June 2026; nominal retail sales in Colorado lagging the U.S. due to employment contraction and suppressed tourist activity.
- Colorado economic growth has slowed; personal income is projected to increase, but consumer confidence is down; debt and delinquencies rising; property tax growth stabilizing; retail sales post-COVID are flat or slightly negative.
- Revenue projections for 2026 are conservative due to uncertainty; recession risk is moderate. Council expressed concern about the structural imbalance where expenses (especially personnel and benefits) have grown faster than revenue for five consecutive years, with personnel costs rising from 57% of general fund expenses in 2022 to 65% in the 2026 budget.
- Council questioned the sustainability of using fund balance (the gap between revenue and expenses) and asked for a clearer breakdown of structural vs. one-time deficits.
- Staff noted that property tax revenue is expected to decline in 2026 and 2027 due to state law changes, and the city must seek revenue diversification (e.g., lodging tax, head tax, user fees).
Capital Bond Project Implementation
- Megan (project manager) provided an update on the $74 million bond projects approved by voters in November 2025. The implementation is split into two phases: Phase 1 covers the Bob Burger Recreation Center (BBRC) and the Service Center; Phase 2 covers the Civic Center.
- The project management team includes Artaik (program management), Davis Partnership Architects for BBRC design, and D2C Architects / BBD for the Service Center design-build.
- Community engagement for BBRC will start with a survey launched this week, with public forums on July 22, 2026.
- The Service Center design-build team is beginning programming and facility tours; neighbor engagement will follow.
- Maddie (bond advisor) outlined the bond issuance timeline: a parameters ordinance for first reading in September 2026, a competitive sale anticipated in October 2026, closing before year-end. The first series of about $40 million will fund the BBRC and Service Center; the remaining $34 million expected about a year later.
- Current market rates are estimated at 4.17% (tax-exempt), well under the 5% maximum assumed in the ballot question. The city’s existing AA+ rating is expected to hold.
- The mill levy for the bonds will be certified in December 2026 for taxes paid in 2027.
Investment Policy & Purchasing Procedures Updates
- Staff proposed updating the 2018 investment policy to clarify language, remove antiquated references, and allow greater flexibility, including language on sustainability goals (ESG considerations). Council generally supported but asked for more specific guidance from the Sustainability and Resilience Advisory Board (SRAB) on exclusions (e.g., oil and gas, firearms).
- Mary Donovan (investment advisor) explained that ESG scoring can be used to assess corporate bond issuers, and the policy could include issuer restrictions. Council agreed to split the update: approve the cleanup language soon, and return with SRAB input on sustainability specifics later.
- For purchasing procedures, staff proposed removing the $100,000 limit that requires council approval for contracts already within the adopted budget, citing the need for timely bond project execution. Council expressed interest in a middle ground—perhaps a higher threshold (e.g., $500,000 or $1 million) or a reporting requirement—rather than complete elimination. Staff will research what other cities do and bring back options.
Council Meeting Norms Discussion
- Councilors led a discussion on why meetings have run late and proposed potential norms. Consensus was reached on several initial steps:
- Hold questions until designated question slides during staff presentations (unless for clarification).
- Set internal time estimates for agenda items and an overall end-time goal (targeting 10:30 PM; no regular business after 10:30 PM without a vote to extend).
- Limit executive sessions to an agreed time (e.g., 45–60 minutes) and avoid starting late—prefer scheduling earlier when possible.
- For presentations, limit council questions to two rounds (two bites at the apple) per item, with flexibility.
- Keep proclamations on the regular agenda (not consent) but keep remarks brief.
- Public comment length and residency considerations were discussed but not changed; it was agreed to see how other norms impact meeting length before revisiting.
- A subcommittee (Councilor Gianola and Mayor Pro Tem Barnes) was formed to develop a draft set of council working norms.
Key Outcomes
- Council agreed to implement the following immediate meeting norms:
- Hold questions until the designated question slide in presentations.
- Aim to conclude regular business by 10:30 PM; no new business after 10:30 PM without a council vote.
- Limit council questions to two rounds per agenda item (with flexibility).
- Keep executive sessions to a planned time limit and avoid starting after the meeting has run late.
- Staff will update the investment policy (cleanup language) for council action in July 2026; sustainability/ESG specifics will be developed after SRAB input.
- Staff will research purchasing threshold alternatives and bring back a proposal for council approval of contracts—revising the current $100,000 limit to a higher amount or implementing a reporting mechanism.
- A subcommittee of two councilors will draft working norms to be presented at a future meeting.
- Council expressed appreciation for staff's work, notably on the cemetery issue, and acknowledged the need to balance public input with meeting efficiency.
Meeting Transcript
So you go to CMO. National Down. And then we have some um Colorado and U.S. labor market indicators, so unemployment rates. Um US is um slightly higher than Colorado, and then same as well in terms of the employment growth, which is um slow moving forward. Real how US household savings are declining. You can see this into 2026 um averages and then where we are right now, looking at about 3.6%. And then credit card delinquencies are rising nationwide. So you can see credit card student loan auto. Um over time, those have been um increasing into 2026. And then additionally, real US household savings are declining. Oops, did I go back? Sorry about that. Um and then inflation. Uh so the two percent Fed target were significantly higher than that. Um and this was in January and February data, so um even now in um June, um, that's closer to between four and five percent in terms of inflation um for the the Denver area. And then nominal sales in the retail trade sector. So you can see here the US is um doing much better in terms of um their retail tax um as what and sales um as compared to Colorado, um, and that's largely due to um the state's employment contraction, again, slow growth and suppressed tourist activity, which I assume is due to drought and some other things. Um so a summary here um in terms of Colorado economic growth, strong growth compared to the rest of the US over the last 15 years. However, in the last few years, this gross growth has been slowing. Personal income is projected to increase in Colorado, and we continue to see consumption. Um however, confidence is down, debt and delinquencies are rising along with inflation. Um property taxes after years of continued growth, home prices are showing signs of stabilizing with much slower growth. And then in terms of retail sales, which is um the largest percentage of our revenue, significant increase post-COVID has gone flat or slightly negative in the last few years, and even optimistic forecasts only show slow growth, um two to three percent over the next few years. So in terms of economic uncertainty, um our revenue projections for 2026 are conservative. There's still a lot of uncertainty again regarding prices, wages, and future consumption patterns. Um recession risk is moderate, but again, that slow employment growth, high inflation, and rising household debt signal the economies in a precarious position. And no one including the city can be certain of what will happen, and therefore we're we're being very cautious as we move forward um in terms of our finances. So any questions on that kind of national Colorado piece. And we have Maddie and we have um Mary Jonovan with Insight, who's our investment advisor here, so they could jump in as well if they have any uh they want to add anything to any of your questions. Thank you, Mayor. Uh if I understand correctly, savings are dropping, but uh and debts going up. Um in Colorado in particular, is that why we're a little nervous? Uh one of the big indicators. Yeah, I mean, I think inf inflation's rising, employment growth has slowed. So I think there's just a concern, and then ultimately that affects consumption patterns, and that's you know, our revenue sources sales tax. So I that's just it's a it's a big concern. And I have to say I've been continually surprised that we continue to consume the way we do in between inflation and delinquencies and things like that. So I it's you know, is is the reckoning coming? I don't know, but um I don't know if you guys want to add anything. No, I th I think spending patterns in general are not matching the uh on a US basis or for the most part spending patterns are not matching what we're really what the expectations would be and not matching what we would see given the economic climate. So to Heather's point, I think we anticipate at some point that has to come to a head. We just don't know when. I mean, I think folks have been saying there's gonna be a recession you know, pending for the last two years, and it just hasn't hit yet. So we just don't really know. I was just making sure because I believe the last time we spoke, this was what was happening. Yep, yeah. And again, I I'm continually shocked that people are continuing to consume the way they do. I that's why I I continue to think there's uh so we'll see. And and the best way to brace for this is you'll you'll get to that.
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