Trinidad Faces Significant Utility Budget Shortfalls, Rate Increases Proposed
The Trinidad City Council spent its Oct. 27 work session reviewing a draft 2026 enterprise fund budget that shows operating deficits across utilities, substantial capital needs, and proposed rate increases. Local residents may see higher utility bills and should expect ongoing council deliberations through November and December as officials seek grants, loans, and reserve use to maintain services.
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Trinidad city staff presented a working draft of the 2026 enterprise fund budget at the Oct. 27 council work session, framing it as a living document ahead of a first reading on Nov. 18 and final adoption on Dec. 16. The review underscored a common theme, rising operational costs and aging infrastructure are creating shortfalls in the city electric, water, gas and sewer funds that will require a mix of modest rate adjustments, grant pursuit, and reserve spending to bridge.
The Power and Light Fund shows projected revenues of $12.6 million against expenses of $13.27 million, leaving a shortfall of $651,054. That gap is driven in part by planned capital purchases, notably a $300,000 bucket truck to replace a 2003 model and a required city match of $266,666 toward an estimated $4 million ARPA grant for substation upgrades. The draft budget includes a commercial electric rate increase of 7.5 percent and a residential increase of 4 percent under an annual adjustment plan. A new solar lease is expected to yield roughly $20,000 per year.
Water faces the largest pressure of any fund. Operating revenues are projected at $3.63 million while operating expenses are $4.41 million, creating an operating gap of $785,879 before capital costs. Staff traced a 38 percent revenue decline in 2025 to a wet year and continued conservation restrictions, and the draft includes a 5 percent rate increase for 2026 while signaling additional rate work may be necessary. Planned water projects include replacement of an aging tank, Old Sopris Road improvements, a $257,255 Phase II Monument Lake expansion study, and distribution line upgrades. City staff said grants and State Revolving Fund loans will be pursued, but reserves will likely be needed to fund immediate work.
The Gas Fund is budgeted for $4.69 million in revenue and $5.09 million in expenses, an approximate $399,696 deficit largely tied to a roughly $600,000 connection to the Walsenburg line intended to boost pressure for the industrial park. Staff noted growing demand in the system as a fiscal pressure point. The Sewer Fund remains the most stable of the enterprise funds, but shows a small operating loss with $2.65 million in revenues against $2.88 million of expenses, and faces major capital needs including a $250,000 wastewater master plan and headworks replacement.
Council members also received updates on capital projects that affect daily life. Southside ball field drainage work continues, with a new grate and bathroom renovations planned. New audible pedestrian signals have been installed at multiple downtown intersections, and staff are adjusting volumes to meet accessibility needs without startling drivers. Alley A improvements are about one third complete by cost and are forecast to reach 50 to 60 percent completion soon, with final decorative elements scheduled in the coming months.
City staff emphasized Payment in Lieu of Taxes and interfund service reimbursements as tools keeping the general fund balanced. For residents the immediate implications are clear, utility reliability will depend on timely capital investment, and some rate increases and reserve use appear likely. The council process through November and December will determine the final mix of rates, grants, loans, and reserves, making upcoming meetings a key venue for public scrutiny and civic input.
