Nicole Scott and her husband, Kyle, scrimped and saved for years during the economic recession.

They had a newborn at home, Kyle was just starting his business as a financial adviser and Nicole was working two jobs while going to nursing school full time.

“We worked hard and made sacrifices,” said Nicole, 30. They put off buying a home, “tightened our belts on things like going out to eat and not taking as many vacations. It wasn’t easy but Fort Collins is such a great town; it was worth it.”

The Scotts, both Fort Collins natives, say they are much better off than they were five years ago. Now with two kids, Kyle’s business is stable, she is director of nursing at a skilled nursing facility and they bought a home two years ago.

“Now that we are more secure and I have gone back to work, we splurge on vacations and going out to eat,” Nicole said.

Still, they’re putting money away knowing the economy is cyclical and life offers no guarantees. “There may be a time when the stock market changes, when the economy changes,” she said. “We have to know we are safe if things change in the future.”

The city, like the Scotts, are doing much better financially. Fort Collins has experienced 27 consecutive months of growth in sales tax revenue, one of the broadest gauges of economic well being. Housing prices are up, construction is booming and the population is growing.

Half of Foothills leased with 8 months to go

Sales tax revenue grew by more than 8 percent from 2013 to 2014, which means people are spending more on everything from necessities to frills.

But as Fort Collins basks in its success, wages remain stagnant, household incomes have declined and families continue to struggle.

“The community is growing but that growth hasn’t necessary trickled down or benefited everyone across the board,” said Martin Shields, Colorado State University’s regional economist. “On average, people might be better off but there are certainly a lot of people who aren’t.”

So, how can Fort Collins lift its economy when wages and household income are not keeping up?

The answer may rest in some combination of consumer confidence, job security, population growth and declining unemployment.

As more people went back to work, sales tax revenue started to grow year over year. Voters in 2010 passed a 0.85 sale tax increase that went into effect in February of 2011. That brought in more revenue from taxes paid on everything from groceries to vehicles to dinners out, but residents also started to up their spending.

From November 2010 through January, sales tax revenue dropped only once — in March 2012 — while Larimer County’s unemployment rate dropped from 7.4 percent at the end of 2010 to 3.1 percent in December, suggesting more people have gone back to work and are confident they’ll keep their jobs.

“If people are spending more, it suggests they’re not very fearful about losing their jobs,” Shields said.

Nationwide and statewide “most of the economic growth over the last 15 years has gone to upper income households,” Shields said. “We have no reason to think Fort Collins is different. So wages can be pretty flat but still have substantial income growth because people make money in other ways.”

The impact won’t show up in median household incomes, but it is more money spent in the economy, he said.

City has plans for windfall

Sales tax growth netted the city of Fort Collins nearly $6 million in unanticipated revenue, the result of conservative budgeting, said Mike Beckstead, the city’s chief financial officer.

Because the city budgets conservatively, annual sales tax revenue is generally more than what has been budgeted.

“If revenue were to come in under forecast, we would be looking to make spending reductions halfway through the year,” he said. “By budgeting conservatively, we can budget spending with confidence knowing that revenue that comes in above budget will flow to the fund balance and be available for use in future budget discussions.”

Of the $5.9 million in unanticipated revenue, $2.5 million goes to dedicated funds such as Keeping Fort Collins Great, natural areas and capital projects, Beckstead said. The remaining $3.4 million was forecasted in the middle of last year and earmarked for various programs and priorities in the 2015-2016 biennial budget, he said.

The city does not track what specific projects are funded from additional revenue, he said, because the money goes into the general fund and is earmarked from there.

Where are we spending?

Beneficiaries of increased spending are grocery, convenience and liquor stores, restaurants and vehicle purchases, according to revenue figures.

Diners last year spent $27.1 million more on meals at local restaurants than they did in 2013, sending overall restaurant revenue up 7.7 percent.

Fort Collins has always been a city that eats out a lot, but customers upped their discretionary spending at restaurants by $85 million, a 29 percent increase, from 2010 to the end of last year.

After a few lean years during the recession, restaurants roared back, helping fuel healthy sales tax growth.

Auto dealers also benefited and showed a 14.3 percent increase in total sales last year, racking up $221.4 million in sales, up from $194 million the year before.

People wait in line at Trader Joe’s before the store’s grand opening Friday, Feb. 27, 2015 in Fort Collins, CO. (Photo: , Morgan Spiehs/The Coloradoan)

What changed?

Twenty years ago, Fort Collins had a handful of high-tech companies that employed thousands in high-paying jobs. The regional economy grew along with the tech industry but risked becoming too dependent on a bubble that would soon burst.

When that happened, companies disappeared, downsized, outsourced, off-shored or moved. Highly paid employees who had worked at the companies for years, sometimes decades, were suddenly unemployed and unable to find work at similar pay.

While new names moved in, they didn’t bring the same number of jobs or income levels lost prior to and during the recession.

Today, growth of retail and service jobs that largely pay less than a living wage are outpacing those high-tech, high-wage jobs of the past.

Last year saw the creation of about 1,000 new retail and restaurant jobs with the opening of Costco, Sierra Trading Post, Dunkin’ Donuts, Conn’s and Trader Joe’s.

Another 1,000 retail jobs will be created when redevelopment of Foothills Mall is complete later this year.

With service and retail jobs replacing higher-paying jobs lost during the recession, and with pay, benefits and hours cut during the downturn slow to come back, more residents are finding themselves trying to hang on to a city that has become home.

Mike Weber left Fort Collins for six years but returned in 1997 to raise his children here. The city’s high quality of life make it a place people want to be despite their struggles, he said.

“We have encountered many struggles and successes over the years, but we are much better off than we were six to eight years ago,” Weber said in a Facebook post.

“At that time, we were barely making it and looking through household goods to see what we could sell to pay the next bill. The desirability of our town creates a difficult situation, much like many of the mountain resort towns. Many folks are willing to work for low pay and pay high housing costs in order to live in a desirable location.”

Others don’t feel as fortunate.

Tori Hofferber said in a Facebook post that the cost of living in Fort Collins keeps going up, yet wages do not. “They’re building new houses and townhomes in the $300,000 to $400,000 price point that people can’t afford.”

She and her husband make “decent money” yet are forced to live with family because the cost of living is too high.

“The cost of living doesn’t leave much room for extra bills to pop up,” she wrote. “If you’re making it, you better hope you don’t have an emergency bill pop up, and by the time rent, utilities and groceries are covered there is not much money or time left to enjoy and relax from all the hard work people put in.”

Faith Fuller added “It’s really hard to make it here. I think with the average income you have to sacrifice and give up a lot of things. Kids that should feel middle class feel poor because in order to pay rent, pay utilities and buy groceries often there is nothing left.

“Families are working harder to survive and having less time to enjoy life and their families.”

Spending in Fort Collins

A look at consumer spending in some of Fort Collins’ largest economic segments over the past five years:

* sales tax increased

Source: City of Fort Collins