Grand Junction is implementing significant changes to its financial operations, restructuring how city services are funded, reallocating expenses, and consolidating operations. This multi-year effort, led by City Manager Mike Bennett and the Grand Junction City Council, aims to address a structural budget deficit that has developed over several years.
The city entered the 2026 budget process facing a $6 million structural deficit, meaning the cost of maintaining existing services exceeded projected recurring revenue. City Manager Mike Bennett emphasized the need for fiscal discipline during an Oct. 5 budget workshop, stating, "We have to live within our means, and we have to adjust our expenses to our revenues."
Since 2021, city revenues have increased approximately 30 percent, while expenses have grown 53 percent. This imbalance is attributed to rising labor and health-insurance costs, expanding public-safety demands, and financial commitments from previous investments in infrastructure, facilities, and development. Some past investments have not generated as much revenue as expected, leaving the city with substantial debt payments drawing from the general fund.
The new approach focuses on aligning recurring expenses with recurring revenues, moving away from reliance on speculative future growth or reserves to cover existing commitments.
One significant change involves shifting approximately $2.1 million in labor expenses from the general fund to the city’s capital fund. According to Bennett, this addresses a practice where employee time spent managing or completing certain capital projects was paid through the general fund rather than included in the projects’ costs. He noted this change improves the general fund’s position while adding cost to the capital fund, reflecting a financial management best practice.
Additionally, the city proposes ending the use of general-fund money to reimburse its water and sewer utilities for connection fees waived on qualifying affordable-housing developments. The City Council had previously approved eliminating general-fund reimbursements for other categories of affordable-housing impact fees. The new recommendation extends this approach, with utilities absorbing the lost connection-fee revenue. A recently approved 48-unit Rural Homes development in the Salt Flats project, for example, would have approximately $593,340 in water and sewer connection fees, illustrating the financial scope of this policy.
Two prominent local organizations will see reductions in general-fund support. The recommended budget includes a $500,000 reduction in an annual city contribution to the Downtown Development Authority (DDA). According to Grand Junction Chief Financial Officer Jay Valentine, this reduction would come from a contribution associated with debt payments for the Las Colonias development and Two Rivers Convention Center improvements, not from the DDA’s existing tax increment financing arrangements. Valentine indicated that discussions with DDA Director Brandon Stam confirmed the organization's long-term financial plan remains "very sound" even with the adjustment.
Visit Grand Junction is also preparing for the elimination of approximately $864,000 in annual general-fund support, associated with the city’s former vendor-fee arrangement. This reduction is being phased in, with its full effect expected by 2028. City Manager Bennett clarified that lodging-tax revenue dedicated to tourism marketing will remain available to Visit Grand Junction, with the reduction affecting only the additional general-fund contribution. Visit Grand Junction Director Elizabeth Fogarty acknowledged that reducing marketing expenditures could impact visitation and tax revenue but stated the organization is adjusting its strategy to minimize effects. Bennett noted that Grand Junction is nearing the practical limits of its existing hotel capacity, with occupancy rates sometimes close to 80 percent, suggesting that additional marketing without new hotel development would have limited effectiveness. Visit Grand Junction is now emphasizing attracting new hotel development to expand lodging-tax collections and create a more sustainable funding source.
Operational changes are also proposed to reduce staffing and facility expenses. This includes moving activities from the city-owned senior center into the new Community Recreation Center, where officials say more programming and meeting spaces are available. Bennett stated this consolidation would allow the city to better utilize the recreation center instead of operating overlapping facilities.
The city is also proposing to close City Hall to walk-in traffic on Fridays, while still offering phone, online, and appointment-based services. Bennett said maintaining existing counter hours would otherwise require an estimated $500,000 to $800,000 in additional staffing expenses. The budget also proposes eliminating 13 positions, including 10 vacant and three filled roles, though officials indicated some affected employees might transfer to other city jobs. Bennett stated these reductions were selected strategically.
Despite these reductions, personnel and benefit expenses continue to increase. The recommended budget includes $3.1 million across city funds for compensation adjustments following a classification and compensation study. The city is also proposing changes to its self-insured employee health plan, including adjustments to copays and out-of-pocket limits, which are expected to save between $2 million and $4 million annually. Public safety remains a major financial challenge for the city.
