Greeley council questions deferred maintenance and cash reserves in 2027 capital plan

Council members raised concerns Tuesday that Greeley’s proposed 2027 Capital Improvement Plan may be deferring too much maintenance while holding back cash in key funds for future debt tied to major projects.

The work-session review covered a proposed five-year capital plan totaling about $203.7 million across 146 projects and 24 funds. Staff told the council the plan is shaped by three large commitments — West Greeley, downtown revitalization and the MERGE highway interchange project — and that fitting those into the city’s financial capacity requires a three-year 25% reduction in annual maintenance and replacement funding, while preserving money for future repayment obligations.

Budget and Policy Deputy Director Kaylin Myers said the city’s most flexible capital funding sources, primarily the food tax and Quality of Life funds, are being squeezed by those long-term commitments. She said staff focused the remaining maintenance money on projects with the greatest operational risk, while other work is being deferred or phased. The agenda packet listed about $43.1 million in deferred needs across 22 items, including Centennial Pool, major irrigation replacements, trail repairs and multiple HVAC and mechanical projects.

Ward III Council Member Johnny Olson said the maintenance backlog has become a growing concern, especially where failures could shut down city facilities. He said he was uneasy with the city “kicking the can down the road” on assets such as the Family FunPlex, Union Colony Civic Center and event facilities, arguing that maintenance should be moved up in the priority list before debt payments on some major projects fully ramp up in later years.

Olson also questioned why the city is carrying cash balances in the same funds that are constraining maintenance spending. Fund forecasts in the capital plan show the Food Tax Fund beginning 2027 with about $2.78 million in available balance and the Quality of Life Fund ending 2027 with about $4.31 million in available cash, both with notes that the city is maintaining positive balances for future debt obligations. Olson said holding back that money instead of spending more of it on needed projects “really bothers me.”

Myers said the reserve approach reflects the uncertainty and timing of major future payments, including West Greeley debt, potential downtown borrowing and later MERGE loan repayments. She said the city is using capitalized interest and delayed repayment structures that reduce near-term pressure but increase obligations in later years, making it necessary to save ahead for those bills. Even so, she said annual forecasts can change with revenue performance and project cash flow, and staff can revisit priorities as those assumptions are refined.

Mayor Dale Hall said the city has been trying to change its budgeting approach after prior budgets drew down reserves and continued deficit spending. Hall said that when he came on board last August, staff concluded the city “could not go through another budget cycle like we’ve done in the past.” He said council could build a cadence of quarterly capital updates and, if revenues are outperforming expectations, discuss bringing back appropriations for additional projects rather than simply letting balances sit.

No formal action was taken on Item 6. The purpose of the session was to gather policy feedback before the capital plan is incorporated into the recommended 2027 budget later this year.