Centennial, Colorado reports no net pension liability. It reports no other post-employment benefit liability either. Neither of those is a claim in a budget brochure. They are what the audited statements say, and what they conspicuously do not say: the city's 2025 Annual Comprehensive Financial Report runs 104 pages and the string "OPEB" appears nowhere in it. There is no Schedule of Changes in Net Pension Liability, no Schedule of Contributions, no funded ratio, no measurement date, no discount rate. A government with a GASB 68 defined benefit obligation is required to publish those schedules. Centennial publishes none, because it has none.
It is also the most squeezed city in this ten city study.
What Centennial actually employs
Ninety-two people. The FTE summary in the 2026 adopted budget prints 92.00 for 2024, 2025 and 2026, flat across all three years. Every one of them is in a defined contribution plan. Note 11 of the 2025 ACFR describes a 401(a) money purchase plan administered by Empower that "serves as a substitute for contributions to Social Security under FICA": the city puts in 10% of earnings, the employee must put in 8%. There is a 457 plan on top with an employer match up to 3%. The note is explicit that "there is no liability on the part of the City beyond its annual contribution."
The audited 2025 employer cost of all of that was approximately $865,000 into the 401(a) and approximately $255,000 of 457 match. Both figures are printed by the city's own auditors as approximations, so treat them that way. Call it $1.12 million in total retirement cost for the entire municipal workforce.
Centennial has no police department, no sworn officers and no fire department. Policing is bought from the Arapahoe County Sheriff's Office. Fire is South Metro Fire Rescue, which the ACFR lists under entities that are explicitly not component units of the city. The city appropriates nothing at all for fire.
That is the cleanest version of the structure people describe as the fix. Now look at the bill.
The contract is the budget
One line in the general fund, "Public Safety Contract," is the entire Public Safety department in every year sourced. Adopted basis, general fund, excluding transfers out on both sides:
| Adopted year | Sheriff's contract | GF operating expenditures | Share |
|---|---|---|---|
| 2023 | $34,179,580 | $60,584,510 | 56.4% |
| 2024 | $37,406,265 | $65,509,033 | 57.1% |
| 2025 | $39,569,500 | $69,194,870 | 57.2% |
| 2026 | $43,589,360 | $73,987,220 | 58.9% |
Three years, +27.5%. Year over year the contract ran +9.4%, +5.8%, then +10.2%, a compound rate of about 8.4% a year. On the longest span with a published actual at each end, 2022 actual ($31,352,394) to 2026 adopted, it is +39.0%.
The 58.9% is not a hostile derivation. The city's own general fund infographic prints "Public Safety (59%)" against "2026 General funds total $74 million in Expenditures." Same numerator, same denominator, arrived at independently.
Growth is where it gets uncomfortable. General fund operating expenditures rose $13,402,710 from the 2023 adopted budget to the 2026 adopted budget. The sheriff's contract accounts for $9,409,780 of that, or 70.2%. Everything else the city does, roads administration, planning, courts, communications, capital, shared the remaining 29.8%.
Centennial's 2025 audit adds a small detail that matters. Public safety was one of only three general fund lines that came in over budget in 2025, by $232,539, while total general fund expenditures came in about $5.9 million under. The contract is the line the city has the least control over, and it is the line that missed.
The debt sentence needs correcting, and the city wrote it
The 2026 budget book states, on printed page 34, that "the City currently carries no debt or pension liabilities." The pension half is exactly right. The debt half is the city's framing, and its own audit is narrower.
Note 9 of the 2025 ACFR reports $8,184,871 of long-term obligations outstanding at 31 December 2025 for the primary government. Statistical Table 11 heads that same figure "Total Primary Government outstanding debt," $75 per capita. Table 12 lists all of it as Direct Debt at 100% applicable. The components: $6,970,000 of general obligation bonds issued by three general improvement districts (Antelope $1,470,000, Willow Creek Series 2020 $3,995,000, Foxridge Series 2020 direct placement $1,505,000), $763,889 of bond premiums, $424,940 of software subscription liabilities and $26,042 of leases. The GIDs are blended component units governed by City Council, so the audit consolidates them.
City only direct debt, stripping the districts out, is $450,982, and the general fund paid $374,019 of principal and $3,819 of interest in 2025. The correct sentence is that Centennial has issued no city-wide general obligation debt and funds capital out of cash. "Zero debt" is not what the statements say. "Zero pension and zero OPEB" is.
The revenue side is thin, and the city says so
Sales tax is 60% of general fund revenue on the city's own printed share, at a 2.5% city rate inside a 6.75% combined rate. Property tax is 17%. The 2026 general fund revenue budget is $87,085,700, down about 1.5% from 2025 adopted, while general fund operating expenditures are budgeted up 6.9%. The 2026 sales tax budget of $52,000,000 sits below the 2025 audited actual of $56,282,232, a deliberate markdown.
Property tax is not going to close that. The certified levy for the 2025 tax year, collected in 2026, is 4.982 mills plus 0.094 mills for abatements and refunds, 5.076 total. The ten year table in the ACFR shows the levy sitting between 5.002 and 5.076 every single year since 2016. It has not moved.
The city states the problem itself, in the adopted budget, on printed page 8: "Staff and Council have acknowledged that, without adjustments, the current revenue structure will not keep pace with street and public safety service costs and challenge the City's savings in-lieu-of debt model for capital projects."
Fire repeats the trick one level down
None of this counts what a Centennial homeowner pays for fire, because none of it is in the city budget. South Metro Fire Rescue's certified levy in Arapahoe County went from 9.290 mills for tax year 2024 to 12.250 mills for tax year 2025, collected in 2026, after voters approved Ballot Measure 7A on 4 November 2025. The increase was 3.000 mills stacked on a 9.250 base operating levy; the 0.040 difference is a one year abatement levy that was not recertified. On the Arapahoe County portion alone that levy raises $103,293,462, against $78,449,476 the year before.
A Centennial property owner now pays roughly 2.4 times as much in fire district mills as in city mills, and the city budget records none of it. Any sentence that says "the city budget rose 6.9%" understates what happened to that taxpayer in 2026.
The point this city makes
Centennial ran the experiment. It employs nobody who can generate a pension liability, it participates in no defined benefit plan, it has no OPEB promise, and its retirement spending is $1.12 million a year against a policing bill of $43.6 million. Its balance sheet is close to what pension reformers describe as the destination.
The cost still compounds at 8 to 10 percent a year and now takes 58.9% of general fund operating spending.
The obligation did not disappear. It moved. The deputies who police Centennial are Arapahoe County employees, their retirement sits on the county's books, and it reaches the Centennial taxpayer as a contract price rather than as an unfunded liability. What drives that price is wages, staffing and the market rate for a sworn officer, which is what drives the payroll of every city in the study whether it employs the officer or rents one.
The pension is the tail. The payroll is the dog.
Fact-check notes and sources
- City of Centennial 2026 Adopted Budget, year two of the 2025/2026 biennium, adopted by Resolution No. 2025-R-54. The signed resolution reads 10 November 2025; the City Manager's Message in the same book says 18 November. Two of the three internal references say 10 November and the signed resolution controls. All 2026 figures here are adopted, not proposed and not actual.
- Sheriff's contract, Public Safety (001 511), printed page 101. The 2026 table carries both a "2026 Original" column of $42,450,000, set when the biennium was adopted, and a "2026 Updated" column of $43,589,360. The Updated column is the adopted budget. A reader working from the 2025 book gets the superseded $42,450,000.
- General fund basis. $73,987,220 is the general fund operating subtotal, expenditures excluding $18,000,000 of transfers out ($15,000,000 to the Street Fund, $3,000,000 to the Capital Improvement Fund). The full appropriated general fund in the mill levy resolution is $91,987,220. Against that larger figure the contract is 47.4%, not 58.9%. The 59% the city prints uses the same ex-transfers denominator this article uses. All city funds, excluding transfers, are $156,244,970 for 2026; the "TOTAL USES, ALL FUNDS $303,974,451" line in the financial summaries includes beginning fund balances and is not the budget size.
- The 70.2% is the most basis-sensitive number here. It is adopted to adopted, transfers excluded, 2023 through 2026: $9,409,780 of $13,402,710. Swap the 2023 endpoint to actual and the same ratio is 48.1%. Measure against total appropriation growth including transfers and it exceeds 100%. The ex-transfers adopted basis is the conservative one. 2026 actuals do not exist yet, so a mixed basis is unavoidable and is disclosed rather than hidden.
- 2025 public safety spending has three published values: $39,569,500 adopted, $39,380,270 projected, $39,802,039 audited actual. The article uses adopted for the series and names the actual where it is the actual.
- City of Centennial 2025 Annual Comprehensive Financial Report, year ended 31 December 2025. Note 11 for the 401(a) and 457 plans and the two approximate contribution figures; Note 9 and Statistical Tables 11 and 12 for the $8,184,871 and the $450,982; Note 2 for South Metro Fire Rescue's exclusion from the reporting entity; Table 13 for population, 109,015, a 2025 Census-derived estimate in a table marked unaudited.
- Three assessed valuations exist for the same 2025 tax year and are not averaged here: $3,142,851,639 in the city's levy resolution, $3,169,279,368 in the Arapahoe County final abstract, $3,194,043,968 in the audited ACFR. Different vintages of one year.
- Arapahoe County 2025 and 2024 Abstracts of Assessments and Levies for the certified 5.076 city levy and both South Metro figures. South Metro Fire Rescue 2026 Budget Report for Ballot Measure 7A, the 3.000 mills and the $50.7 million.
- Not published, and therefore not stated here: the intergovernmental agreement itself. The budget documents call it "a multi-year agreement" and never print its term, expiration or escalator formula. What the county books as revenue from Centennial, and whether deputy pension cost is passed through at full cost, is also absent. No per-capita 2026 figure is computed, because the only sourced population is a 2025 estimate.
Related reading
- Colorado and Idaho city budgets: what public safety actually costs: the ten city comparison this article belongs to, and why the share denominators differ in kind between a plain city, a consolidated city and county, and a contract city.
- Colorado and Idaho state budgets, from the taxpayer's side: the state version of the same squeeze, where Medicaid does to the general fund what the sheriff's contract does here.
- Colorado vs Idaho pensions: the funded ratios, discount rates and net pension liabilities Centennial does not have.
- What a paycheck costs an employer beyond wages: the mechanism behind the contract price, since what Centennial rents is a fully loaded employee.
This post is informational, not legal, financial or municipal advisory advice. Budget figures are appropriations as adopted or proposed and change through the year. Mentions of named municipalities, districts and retirement systems are nominative fair use. No affiliation is implied.
