Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: December 4, 2025

Agenda Title Consideration of a motion to adjourn as the Boulder City Council and convene as the Knollwood Metropolitan District Board of Directors; and Consideration of a motion to adopt Resolution 4 appropriating money to defray the expenses and liabilities of the Knollwood Metropolitan District for the 2025 fiscal year beginning January 1, 2025; and setting forth related details and Consideration of a motion to adjourn as the Knollwood Metropolitan District Board of Directors and reconvene as the Boulder City Council

Staff Contact • • •

Krista Morrison, Chief Financial Officer, Finance Joel Wagner, Finance Deputy Director Charlotte Huskey, Budget Officer, Finance

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to adjourn as the Boulder City Council and convene as the Knollwood Metropolitan District Board of Directors; and

Motion to adopt Resolution 4 appropriating money to defray the expenses and liabilities of the Knollwood Metropolitan District for the 2025 fiscal year beginning January 1, 2025; and setting forth related details and Motion to adjourn as the Knollwood Metropolitan District Board of Directors and convene as the Boulder City Council

Executive Summary The purpose of this motion is to appropriate additional funds for the 2025 budget of the Knollwood Metropolitan District (“District”). The original budget adopted by the previous board of directors before the District partially dissolved underestimated legal and other costs related to the limited dissolution of the District.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved, the District will have an adopted budget for 2025 that meets the operating expenses for the District.

Define and adopt a modified motion

Council would need to define any modifications or amendments to the draft motion language and have the motion language perfected before a vote to adopt this item. This may require staff to bring back an amended version.

Deny the motion or take no action

If council does not adopt the resolutions, the district's budget and spending authority will expire, and essential government functions will be jeopardized. Additionally, the budget for the district will not be balanced.

Refer back to staff

If council refers this item back to staff, council will need to define modifications or amendments so that staff is prepared to present modified and amended district budget resolutions at a future meeting.

Alignment with City Plans and City Council History Sustainability, Equity, and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area N/A – the District is a separate legal entity from the City of Boulder and has not adopted the SER Framework. Citywide Strategic Plan N/A – the District is a separate legal entity from the City of Boulder and has not adopted the Citywide Strategic Plan. Staff Notes N/A - this is a standard budget item.

Alignment with Additional City Plans N/A - the District is a separate legal entity from the City of Boulder and is therefore not subject to any additional city plans..

City Council History While this District is separate from the City, the history of the Knollwood Metropolitan District is discussed in the April 17, 2025 City Council Agenda Memo and the November 6, 2025 Knollwood Metropolitan District Agenda memo. The prior board of directors did not operate with formal agenda memos, but the 2025 budget and meeting minutes are included in Attachment A.

Analysis The 2025 budget was adopted by the District’s previous board of directors on December 10, 2024. The approved budget anticipated $13,169 in revenues and $31,605 in expenses, with the shortfall being funded by reserves. The District underestimated legal and other professional services related to dissolution. Prior to dissolution, the former board paid $18,777 in invoices for professional services, including $6,300 to the former Treasurer for bookkeeping services, $8,800 in legal fees, $1,519 for 2024 financial statement review, and $1,426 for printing and mailing related to the dissolution election. After dissolution, city staff received an additional $13,320 in legal invoices incurred between January and May of 2025, and another $1,750 in bookkeeping fees.

City staff, now working on behalf of the District, have incurred approximately $5,200 in staff time and public notice costs related to post-dissolution set up and administration of the District. Finally, city staff have discovered a mistake in the calculations of the District’s beginning fund balance in the prior years’ budget documents. District representatives appear to have been including property taxes receivable in the beginning fund balance in the budget documents, while also including property taxes as revenue in the budget. This resulted in a double-counting of approximately $13,000 in property tax revenue. Staff corrected the beginning fund balance in the summary of the anticipated costs for the District for 2025 in Table 1 below. Table 1 - 2025 Forecast Category

Beginning Fund Balance

26,951

Jan May Actual 14,532

Sources of Funds Property & Ownership Taxes Total Sources of Funds

13,169 13,169

9,494 9,494

3,297 3,297

12,791 12,791

Uses of Funds Consultants Staff Time Other Total Uses of Funds

30,000 1,606 31,605

31,719 2,117 33,836

5,000 200 4,000

31,719 5,000 2,317 39,036

Net Revenue/(Deficit)

(18,436)

(24,342)

(1,903)

(26,245)

Ending Fund Balance

8,515

(9,810)

(11,713)

(11,713)

Adopted Budget

Jun Dec Forecast (9,810)

Total Forecast 14,532

Staff notes that after adjusting for the incorrect beginning fund balance in the adopted budget, the ending fund balance for the District is in deficit. The prior board’s legal counsel has agreed to allow payment of its past due invoices over time so that the district can maintain a positive cash balance until property taxes recover. In total, staff is recommending that the board of directors appropriate an additional $7,431 to balance the 2025 expenditures. Table 2 – 2025 Supplemental Appropriation Category Consultants Staff Time Other Total

Adopted Forecast Supplemental 30,000 31,719 1,719 5,000 5,000 1,606 2,317 711 31,605 39,036 7,431

Equity Analysis N/A – the District is a separate legal entity from the City of Boulder and has not adopted the SER Framework.

Fiscal Note Estimated Fiscal Impact Narrative This action will appropriate sufficient funds so that the District will have a balanced budget for 2025. The correction of the error in beginning fund balance, combined with the reduced mill levy will result in a highly constrained District budget for the next several years, but this action does not impact the District’s ability to satisfy its debt obligations.

Climate, Resilience, and Sustainability Considerations Not applicable - this is a standard budget item.

Community Engagement This is a standard budget item and is necessary to balance the 2025 budget. A public notice was posted in the Boulder Daily Camera as required by law.

Workplan Considerations Adoption of the Resolutions are incorporated into the work of the District’s annual budget process and would not require additional workplan considerations at this time.

Next Steps for City Council Per requirements associated with resolutions, City Council, acting as the District Board of Directors, will consider the District Resolution for one reading, which will take place during the City of Boulder City Council meeting scheduled for December 4, 2025.

Accessibility Statement The City of Boulder is committed to digital accessibility. Some content may not be fully accessible due to technical limitations or issues. For alternate formats or accommodations, please visit Accessibility | City of Boulder or contact accessibility@bouldercolorado.gov.

Attachments A – 2025 Budget and Meeting Minutes B – Proposed Resolution 4