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City of Cheyenne begins discussions of new $74.4M annual budget

City of Cheyenne begins discussions of new $74.4M annual budget

Yahoo06-05-2025
CHEYENNE — Anticipated general fund revenues in the next city budget are up from the current fiscal year, but Cheyenne Mayor Patrick Collins said it's important to proceed with a fiscally conservative budget after the state Legislature passed more laws lowering property taxes for most Wyoming homeowners.
The projected general fund revenues for fiscal year 2026, which begins July 1, 2025, are $74,417,876, up $2,770,229 from FY 2025, or 3.8%.
'Projecting revenues this year was difficult,' Collins told City Council members during a work session Friday. 'We took a very conservative approach in our projections due to the uncertainty stemming from federal tariffs, inflation and the looming recession.'
City Treasurer Robin Lockman said Cheyenne's economy shows promising momentum, but it is important to remain cautious about the potential for an economic downturn. She said the bond market's 10-year yield curve, an historically accurate recession indicator, was inverted from July 2022 to September 2024, the longest period on record.
She said a recession typically begins around six months after the yield curve returns to normal.
According to Lockman, the unemployment rate in Laramie County has risen from 3.7% to 4.4% over the past year, adding that stagnating unemployment growth underscored the need for caution.
In addition, the property tax reductions passed by the Wyoming Legislature, largely in Senate File 69, earlier this year reduced potential city revenues by an estimated $1,775,000, something Collins called an 'opportunity loss.'
SF 69 imposed a blanket property tax cut to residential properties for the first $1 million of a home value. This legislation alone reduced projected revenues by $1.5 million.
A separate long-term homeowner exemption will also decrease assessed valuation for property tax purposes by 50% for qualified individuals. The city projects this will result in an additional $275,000 loss in property tax revenues.
Collins said he would have liked to see those funds go toward hiring more staff for the city's police and fire departments as the city continues to expand.
In the past four years, Cheyenne's land area has grown by 4,637 acres, or 18.24%, in new business parks and neighborhoods, equivalent to 7.25-square-miles.
'Our plans to add more police and fire personnel to keep up with growth must now be postponed. We've made steady progress over the past four budget years in increasing our public safety efforts. And this pause will make our future efforts more difficult,' he said.
However, despite the loss in potential property tax revenue, the projected amount for FY 26 is still slightly higher than FY 25 by $32,433.
This is largely due to rising property values, with a projected 3% increase, and the city's annexation of North Range Business Park in December, which added approximately $1 million in new business property taxes, since SF 69 only applied to residential properties.
Collins said further projected revenue growth is catalyzed by data center development, which is now the city's second-largest revenue source.
According to the proposed budget, franchise fees on natural gas and electricity have grown by $2,652,000, or 48%, in the past year.
'Data centers use an enormous amount of electricity, and that use is reflected in the increases,' Collins said. 'And the great news is we have more campuses and data centers planned for the future.'
Congruent to this is expected growth in revenue from building permits. City officials are projecting an increase of $710,000, or 31%, in building permit revenue in the next fiscal year. The mayor said this is driven by more data center construction and several multi-family housing projects planned.
Lockman highlighted one additional revenue source, the city's investment income. She said the higher interest rates, paired with a strategic portfolio, have nearly quadrupled investment returns from $683,000 in FY 23 to a projected $2.2 million in the current fiscal year on general fund investments. She estimated it at $1,380,000 in the coming year, an increase of $530,841 over FY 25.
However, some other revenue sources are weaker than the previous year. Collins said sales tax collections have been under pressure since January 2024, largely due to less oil and gas activity. The proposed budget suggests sales tax could by down by $904,800, or 3.65%, in the coming fiscal year.
Another anticipated decrease is in lottery proceeds, which have decreased by $208,895 since 2023. It is projected to decrease $100,000 this year to $300,000, down from over $600,000 in 2023.
The city's top three projected revenue sources for FY 26 are sales taxes at 34%, franchise fees at 11.8% and property taxes at 11.6%.
The top 10 projected revenue sources are about 85.7% of the general fund budget, or $65.59 million, and the rest amounts to around $9.8 million.
Employee wages and benefits are once again the city's top expense, at 71.8%, followed by capital projects at 3.7%, and fleet, fuel and labor at 3.4%.
City staff have been working on assembling this proposed budget since December. In the coming weeks, members of the City Council will meet with department heads to hear the details of the requests in their budget proposals and ask any questions.
On Friday, department heads from the mayor's office, Youth Alternatives and human resources presented their budgets. Council members also discussed miscellaneous budget items.
The budget will come before the governing body for first reading on May 12 and will undergo workshopping over the next month to address any issues. It is scheduled to come before the council for third and final reading on June 10.
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