Vail Town Council to get its first look at capital projects budget

The Vail Town Council will get its first look at the town’s capital projects budget on Tuesday, a plan that proposes $47.5 million in funding in an effort to prioritize the town’s housing and environmental initiatives.

Capital projects and municipal services account for the bulk of the town’s annual budget, but unlike municipal services, capital projects can see major shifts year to year. In 2025, the town’s $78.8 million capital projects budget accounted for about half of the town’s total budget, but that will be significantly decreased for 2026.

Vail Town Manager Russ Forrest, in a memo published Friday, called the capital projects budget sustainable and strategic, in accordance with town budget philosophies.

“The capital budget funds reflect sustainable budgets with ongoing annual capital maintenance costs funded within the normal annual revenue streams,” Forrest said.

While the town has spent down its massive balance of reserve funds considerably over the last few years, it will not have to rely as heavily on reserves for 2026, Forrest said.

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The town’s reserves had reached approximately $174 million in 2023 before large spending plans in 2024 and 2025, which will bring that balance down to something closer to $55 million by the end of the year, with approximately $54 million in reserves spent during 2025. The majority of those reserve funds are being used for the ongoing Dobson Arena redevelopment in the town core and the Southface housing project on the North Frontage Road.

During 2026, the town is projected to spend a combined net $776,500 of available capital fund, real estate transfer tax, and housing fund reserves, Forrest said.

“In order to maintain a balanced, sustainable plan, reserves are only proposed to fund one-time and non-routine budget requests,” Forrest said.

Approximately $37 million has been proposed for new or enhanced assets in 2026, with $23.4 million tied to housing initiatives, much of it related to the town’s ongoing investment in the Timber Ridge redevelopment. The town has committed $25.5 million toward purchasing units in that project, with $13.9 million budgeted next year and an additional $8.5 million set aside in the Internal Employee Housing Fund for units to be rented to town staff.

Another $3 million would go to Habitat for Humanity to help acquire Timber Ridge units for homeownership opportunities.

The 2026 budget also proposes scaling back the town’s annual contribution to the Vail InDEED deed-restriction program, reducing the transfer from $2.5 million to $1 million. Over the past four years, InDEED spending has averaged about $353,000 per year, leaving unspent funds that will roll forward into 2026.

Environmental sustainability is the second-largest category of new spending, with $9.9 million planned. That includes $9.1 million for an energy efficiency upgrade package featuring geothermal heating at the Vail Public Library and Dobson Arena.

The town also plans to continue investments in parks and public facilities through the real estate transfer tax fund, with $10.5 million in expenditures proposed. That includes $750,000 for reconstruction of the North Recreation Trail near Red Sandstone, $590,000 toward rehabilitation of the Ford Park tennis courts and $425,000 for improvements to Donovan Park Playground.

Vail’s capital plan is supported primarily by the town’s 4% general sales tax, a 0.5% housing sales tax, construction use taxes, real estate transfer tax revenues and tax increment financing from the Vail Reinvestment Authority.

Sales tax collections for 2026 are projected at $42.3 million, with $16.1 million of that allocated to the capital projects fund. Real estate transfer tax revenues are forecast at $7.8 million, which is down 5% from 2025 projections.

Town staff will seek council feedback on the proposed priorities at the Town Council’s regular meeting on Tuesday, which is set to begin at 9 a.m.

The formal presentation of the town manager’s budget is set to be presented Oct. 21, with budget ordinance readings scheduled for Nov. 4 and Nov. 18.