Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: May 7, 2026

Agenda Title Consideration of a motion to adopt Resolution 1378 approving a Model Metropolitan District Service Plan for use by applicants in the formation of a Metropolitan District within the boundaries of the City of Boulder, Colorado; and setting forth related details

Staff Contact   

Mark Woulf, Assistant City Manager Brad Mueller, Director, Planning & Development Services Sarah Geiger, Senior Counsel

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to adopt Resolution 1378 approving a Model Metropolitan Service Plan for use by applicants in the formation of a Metropolitan District within the boundaries of the City of Boulder, Colorado; and setting forth related details.

Executive Summary This item is the second part of the legislative package designed to establish a local regulatory framework for metropolitan districts (MDs) in the city of Boulder. Following

the “Nod of Five” provided on November 20, 2025, to direct staff to bring forward regulations related to MDs, and policy direction provided by City Council on January 22, 2026, council adopted Ordinance 8748 at the April 16, 2026, meeting. Council provided feedback on Resolution 1378 and the model service plan (Attachment A) and provided direction to make an adjustment to the model service plan to allow for the consideration of compounding interest on developer-issued debt. Staff has revised the model service plan based on that direction.

Council Action Options Option

Outcome

Approve motion language as drafted

Resolution 1378 will be adopted.

Define and adopt a modified motion

Council would need to define any modifications or amendments to the draft motion language. This will likely require staff to bring back an amended version of Resolution 1378.

Deny the motion or take no action

Resolution 1378 would not take effect.

Refer back to staff

If council refers this item back to staff, staff will take the feedback and bring back revised documents at a later date.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area The initiatives outlined in this memorandum align with the Economic Vitality goal area of the SER Framework. Citywide Strategic Plan The establishment of a metropolitan district regulatory framework as a potential economic development tool aligns with Strategy 14 in the Citywide Strategic Plan.

Alignment with Additional City Plans The creation of a regulatory framework for MDs is aligned with the Economic Vitality Strategy and the Boulder Valley Comprehensive Plan.

City Council History Previous conversations with council related to this item include the Advancing Key Economic Development Policy Initiatives item discussed during the City Council Special Meeting on July 24, 2025, and the Economic Development Plan, and Program Enhancements Update: Economic Vitality Strategy Review and Commercial Area Connections and Quality of Life Improvements Update: District Analysis Results and Recommendations items discussed during the City Council Study Session on April 24, 2025. Council reviewed the general purpose of MDs and directed staff to bring forward an ordinance and model service plan to regulate MDs at the November 20, 2025, City Council Meeting. On January 22, 2026, staff presented a policy framework focused on “commercial-only” districts to receive feedback on key policy issues. On April 16, 2026, council adopted Ordinance 8748, enacting Chapter 8-12 related to Metro District. Council provided feedback on Resolution 1378 related to the model service plan.

Analysis Model Service Plan Attachment B will be considered as a separate item accompanied by a resolution at second reading of Proposed Ordinance 8748. A service plan is essentially a “rulebook” that defines exactly what a MD is allowed to build and how much it can tax property owners to pay for those projects. It is the main document that the city reviews to ensure that any proposed district stays within agreed-upon financial limits and remains accountable to the city and the public. The below provides a summary and brief analysis of the significant provisions of Attachment B. Core Governance and Territorial Scope (Articles I - IV) The opening articles establish a district as a quasi-municipal corporation that, while technically an independent unit of local government, is strictly bound by the terms of the service plan and a mandatory IGA with the city. This structure ensures that the district cannot expand its legal or geographic scope without formal city intervention. The

boundaries are strictly defined, and the service plan explicitly clarifies that council's approval of the service plan does not bypass standard city zoning or land-use requirements; developers must still adhere to all Boulder Revised Code obligations independently of a district's formation. Operational Powers and Infrastructure Control (Article V) Article V contains several of the most significant policy constraints, ensuring that a district does not result in the “privatization” of public infrastructure. •

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Infrastructure Dedication: A central requirement is that all public improvements—such as streets, water lines, and utilities—must be dedicated to the city or appropriate public jurisdiction upon completion unless otherwise agreed to by the city. Maintenance Limits: A district is generally prohibited from ongoing operations and maintenance (O&M) of these assets unless specifically authorized by an IGA. Prohibited Activities: The service plan explicitly bans a district from exercising powers related to fire protection, television relay, or golf course construction. Eminent Domain: This service plan stipulates that a district has no power of eminent domain unless City Council grants it through a separate, projectspecific resolution or other document.

Regional Contributions (Article VI) To ensure that localized development also supports city-wide needs, Article VI mandates the imposition of a three mills Regional Improvements Levy. This revenue is collected by the district but paid directly to the city to fund regional infrastructure projects, ensuring that the district contributes to the broader community network beyond its immediate boundaries. Financial Plan and Debt Caps (Article VII) The financial plan is the primary mechanism for protecting future property owners from excessive tax burdens. It establishes hard caps on the district’s ability to generate revenue: •

Maximum Debt Mill Levy: Capped at 50.000 Mills. This is the highest rate allowable for the repayment of borrowed funds.

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Maximum Operations and Maintenance (O&M) Mill Levy: Capped at 15.000 Mills to cover administrative and authorized maintenance costs.

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Aggregate Cap: The total combined levy for debt and O&M is strictly capped at 65.000 Mills.

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Debt Term and Sustainability: All debt must be structured to be fully discharged within 40 years, preventing permanent indebtedness. Furthermore, if a district borrows from a developer (privately placed debt), an independent financial advisor must certify that the interest rates are fair and consistent with market standards.

Transparency, Disclosures, and Reporting (Articles VIII - IX) The model service plan provides high levels of disclosures. A district must file an annual report by October 1 of each year detailing its financial health and construction progress. Most importantly, developers are required to provide a “Notice to Purchasers” to every potential buyer or long-term tenant. This disclosure must explicitly include the Maximum Debt Mill Levy and any rates, fees, tolls, or charges imposed by a district. This ensures that any business or property owner is fully aware of the total cost of taxation and the district's broad authority to collect revenue before committing to a lease or purchase. Intergovernmental Agreement, Material Modifications and Dissolution (Articles XIIXIV) The service plan is designed to be a rigid document. Any “material modification”— defined as a major change to a district’s powers, debt limits, or service area—requires a district to undergo the same formal public hearing and City Council approval process as the original application. Regarding the end of a district's lifecycle, the service plan specifies that the dissolution process and requirements must strictly follow the provisions set forth in Proposed Ordinance 8748. This includes an “Inactivity Clause,” which requires dissolution if no debt is issued within five years, and the mandate that a district must petition for dissolution once its public purpose is fulfilled and its financial obligations are fully discharged. This ensures that the entity does not persist once its infrastructure and financial goals are met. An IGA serves as the primary enforcement tool between the city and a district. To ensure the city maintains immediate oversight, the service plan establishes strict timing requirements: a district is required to execute the IGA with the city at its first board meeting following a district's organizational election. This mandate ensures that a district is legally bound to the city's specific terms—including infrastructure standards and mill levy caps—before it begins any significant financial or operational activity.

Equity Analysis A robust and growing economy is foundational to the city’s overall well-being, and a strong economic base is needed to provide sufficient sales and use taxes, property taxes, and other revenues to fund essential programs and services such as affordable housing, social services, environmental initiatives, public safety, and many others. However, the use of specialized financing tools introduces specific equity considerations that must be proactively managed to prevent disproportionate burdens on diverse populations. Strict caps on mill levies and terms, enforced via a service plan developed from the city’s model service plan, are important mitigation measures. Redevelopment, in general, can facilitate targeted investment and job creation. A primary equity risk is the potential for gentrification and displacement of long-time residents, renters, and local businesses due to the development itself and/or rising property values and rents. Additionally, utilizing the city’s Racial Equity Instrument during the consideration of any specific public financing will help ensure anti-displacement strategies are incorporated to the greatest extent practicable.

Fiscal Note Estimated Fiscal Impact Narrative The proposed ordinance enables the city to accept and review applications for metropolitan district service plans. The associated application fee for review of the applicant’s service plan is intended to recover staff time required to administer the application intake, interdepartmental review, and preparation of materials for City Manager and City Council consideration. Since metropolitan district proposals are expected to occur infrequently—likely less than once per every several years—the fiscal impact to the city is anticipated to be minimal. When an application for a metropolitan district is received by the city, the fee collected will cover the staff time for review. Any third-party costs incurred by the City for legal, financial, or other consulting services related to the review of a metropolitan district proposal will be billed directly to the applicant. As a result, the program is designed to be cost-neutral to the city. Current Year Estimated Fiscal Impact Fund(s): 2120FD

Department(s): Planning & Development Services Program(s): All P&DS Programs Item

FY 2026 Budget

FY 2026 Estimated Impact

FY 2026 Net Change

Beginning Fund Balance

$18,200,885

$0

$18,200,885

Total Forecasted Revenue

$15,179,491

$15,000

$15,194,491

Total Estimated Expenses Ending Fund Balance(s) After Reserves FTE

$17,735,173

$15,000

$17,750,173

$12,646,701

$0

$12,646,701

122.65

0

122.65

Three-Year Estimated Fiscal Impact

Item

FY 2026

FY 2027

FY 2028

Total Forecasted Revenue

$15,000

$0

$0

Total Estimated Expenses

$15,000

$0

$0

Net Estimated Impact

$0

$0

$0

Climate, Resilience, and Sustainability Considerations The expansion of economic financing tools is strongly aligned with the City's Sustainability, Equity, and Resilience (SER) Framework and broader climate goals, and are designed to support a more resilient and sustainable economy. Development or redevelopment in specific areas that align with Boulder Valley Comprehensive Plan

goals and policies can significantly contribute to broader sustainability outcomes by promoting compact, mixed-use development, reducing vehicle miles traveled, and optimizing existing infrastructure. In general, economic development financing tools can be used to encourage projects that demonstrate strong environmental stewardship, including sustainable building practices, reduced energy and water consumption, integration of renewable energy, and support for alternative transportation. MDs can contribute to a more diversified and resilient local economy, better equipped to withstand future environmental and economic shocks, and to advance Boulder's leadership in climate action.

Community Engagement See memo from April 16, 2026, for full analysis of the community feedback. Based on feedback related to the draft model service plan’s prohibition on compounding interest for privately placed developer debt, council directed staff to remove this prohibition if a compounding interest rate is certified by an External Financial Advisor. This change is reflected in Attachment A.

Workplan Considerations The creation of a regulating ordinance and model service plan for MDs is within the current city staff work plan.

Next Steps for City Council No further action is required.

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Attachments Attachment A – Resolution 1378 and Model Service Plan (Clean Version) Attachment B – Model Service Plan (Redlined Version)