Fort Collins staff describe 9.3% bill increase for four-utility households

Fort Collins staff described a 9.3% combined utility-bill increase, about $18.90 a month, for an average residential customer on all four city utilities outside a separate water district. The 2027-28 budget has a public hearing set for Oct. 20.

Council members signaled they wanted to explore a higher natural-gas franchise fee rather than make other proposed cuts, leaving open a mid-year grocery rebate supplement if needed. The budget presentation estimates a 2% fee would bring in about $500,000 in new annual revenue, compared with about $1.1 million at 3%. If passed through to customers, it estimates a residential monthly franchise fee of $1.16 at 2% or $1.75 at 3%. Those represent estimated annual increases of $6.48 and $13.56, respectively, over the current fee.

Staff presented the higher fee as a possible way to pay for Municipal Court, the Grocery Sales Tax Rebate Program or Human Services grants. The budget presentation lists $200,000 to restore the rebate and $50,000 for the grants — $250,000 a year beyond the recommended budget. The fee revenue would go into the unrestricted General Fund without a direct tie to future spending unless the council created one, staff said. Even without the fee, one-time money would be available next year for the rebate or grants, staff said.

Mayor Emily Francis questioned where the fee revenue would go and what it would mean for household bills over time. “I feel a little uncomfortable just adding it to the general fund,” Francis said. A council member said a 3% fee could be acceptable if additional revenue went toward affordable housing or fee relief, but wanted further study. Melanie Potyondy said she also wanted a plan for the revenue and favored using it to offset everyday costs such as groceries.

The city’s grocery rebate pays $81 per person in 2026 to ease city sales tax on food for low-income residents. Residents in city limits or the Growth Management Area qualify at household incomes up to 60% of area median income, with automatic enrollment. Options to cut costs included lowering the rebate to $65 or less or limiting eligibility to city residents, among other changes. Staff said a redesign might not return to council for approval before the 2027 program and that it would aim to have changes in place by Jan. 1.

The city manager’s recommended adjustment adds about $250,000 for Municipal Court needs identified after the original budget recommendations. Proposed offsets cut landscaping contracts at the Gardens on Spring Creek and drop a planned recreation business-support position for the Southeast Community Center, among other changes. Without that position, Recreation would cover the center’s business-support needs with existing staff, staff said. Francis said she supported the court funding: “I think the reductions are a good identification of where to find those ongoing funds.”

Council members indicated support for adding $250,000 for Municipal Court and using the proposed offsets. Staff said it would prepare the appropriations ordinance for Nov. 3 on that basis. Staff also said it would try to bring information on the gas fee and assistance programs for discussion at the next work session. The budget schedule lists an Oct. 20 hearing, a possible Oct. 27 work session, and first and second readings on Nov. 3 and Nov. 17.