Rick Langenberg
With the close of 2025 approaching, the Cripple Creek City Council is preparing for major fee adjustments regarding utility rates and taxes on marijuana sales, based on market realities and projected expenses.
During its Nov. 19 meeting, the council reluctantly okayed a proposed plan, calling for a slight fee increase for residential rates for monthly water and sewer bills. And in an unrelated action, it agreed to lower the current city sales tax on marijuana retail sales and hinted that further reefer fee adjustments may be needed to compete with shops down the Pass.
These proposed changes on the 2026 budget will go into effect in early January.
The utility fee hike generated a fair amount of discussion, with several leaders wavering at the suggestion of upping rates. This plan followed a detailed utility rate study done by an outside consultant. City Administrator Frank Salvato cited major efforts undertaken to improve old and aging lines, along with millions in infrastructure pursuits the city is pursuing with grants. Most of these grants, though, require some type of matching funds.
The recent study, done by the Raftelis company, had recommended a 7 percent-plus hike in overall rates to help foot the bill for these growing expenses.
At its recent meeting, the council proposed a 4 percent increase for residents and 7.5 percent for small commercial users and up to 12 percent for very large commercial customers. The main goal cited by the council dealt with easing the pain for residents. “A rate increase is not something we take lightly,” said Mayor Annie Durham.
Councilman Cody Schwab went further and indicated some discomfort in raising rates, even though it’s quite evident that if the city wants to improve its infrastructure system, it must open up its pocketbook. “It pains me to do this,” said Schwab.
Councilman Jared Bowman, however, reminded his fellow peers that the city currently has some of the lowest rates in the state.
Still, the council expressed concerns about the impact of this move under the current economic climate, with many residents struggling to put food on the table these days. The mayor raised a red flag about getting the word out to residents, prior to them getting a bill with the new hikes. The city staff agreed to provide a fact sheet when the next billing occurs and to post the change on its website and facebook page.
City officials also noted that under the new rate package, the brunt of additional revenue will be paid by commercial users, and not by the residents.
With no dissenters, the council unanimously passed the proposed rate increases.
Marijuana taxes sliced
In another major fee adjustment, Salvato informed the council that the city has taken a hit financially due to the decision by Colorado Springs voters in Nov. 2024 to permit recreational retail sales to occur at licensed medicinal marijuana shops. This has become a game changer for the marijuana industry in the Pikes Peak region, resulting in major budget adjustments for the city of Manitou Springs, the first town in the Pikes Peak region that permitted this retail activity on a limited basis.
Recreational pot sales in the Springs began last April, a scenario that has created impacts for the current towns permitted retail marijuana activity, including Cripple Creek. “We are taking a hit,” announced Salvato.
Cripple Creek currently has one local marijuana dispensary, selling both recreational and medicinal cannabis, High Stakes Leafery, which has been operating for nearly two years. Their shop, located just off the main drag, followed a convincing vote by Cripple Creek residents in 2023 to permit retail marijuana sales to occur within the city limits.
Salvato proposed lowering the current sales tax rate on marijuana products from 12 to 9 percent. He also suggested that leaders continue to monitor the situation, with the possibility of even lower rates, if the market dictates such a move.
Several council members made it clear they didn’t want the town’s sole marijuana retail operator to fail because of unreasonable taxes and fees. “I don’t want them (High Stakes Leafery) to go out of business,” said Durham. She even suggested possibly lowering this tax rate even more. “I don’t want the business to not operate.”
Salvato, though, reminded the council that marijuana sales began initially, at the recommendation of gaming operators, who feared the city imposing a big increase in device fee rates. Retail marijuana outlets were cited at the time as a possible source of additional revenue for the city, instead of relying so much on the gaming industry.” I don’t want to go back to where we were before,” said the city administrator, with the need for a substantial device fee increase to make ends meet.
He also described the Cripple Creek cannabis market as slightly different from that of Colorado Springs, with the vast majority of sales occurring from visitors coming to the area, and not necessarily from locals. “That (the Colorado Springs marijuana businesses) is a different market.”
Currently, the shops there only have a sales tax rate of 5 percent.
In a compromise move, the council on Nov. 19 passed the first reading of an ordinance that would lower the sales tax rate on marijuana retail sales to 9 percent. At the same time, the council opted to review this revenue situation on a quarterly basis.
Salvato told the council that the current operators of High Stakes Leafery were appreciative of the city’s willingness to amend these rates but conceded they have expressed much concern over the tax inequity compared to other local markets and want to remain competitive.
