Agenda Memo_Revised

City of Boulder City Council Agenda Item Meeting Date: October 9, 2025 Agenda Title Introduction, first reading, and consideration of a motion to order published by title only Ordinance 8719 adding a new Section 8-2-26, “Transportation Maintenance Fee,” B.R.C. 1981, implementing a fee to offset the cost of maintaining transportation infrastructure and facilities within the city; and setting forth related details.

Staff Contact • •

Chris Hagelin, Principal Project Manager, Transportation & Mobility Blythe Bailey, Director, Transportation & Mobility

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to introduce and order published by title only Ordinance 8719 adding a new Section 8-2-26, “Transportation Maintenance Fee,” B.R.C. 1981, implementing a fee to offset the cost of maintaining transportation infrastructure and facilities within the city; and setting forth related details.

Executive Summary The purpose of this item is to introduce an ordinance to enact a Transportation Maintenance Fee to collect revenue for underfunded and unfunded transportation maintenance needs. A Transportation Maintenance Fee (TMF) is an annual or monthly fee paid by residential and commercial property owners (including non-public schools, quasi-public building uses and religious uses) to cover the cost of transportation maintenance activities such as pavement management and filling potholes, safety asset

and marking replacement, multiuse path and sidewalk maintenance, bridge repair and bus stop maintenance. Options exist for how the fee is collected, and the collection method will be determined in the next phase of the project. As the city’s transportation system has expanded and matured, the cost to maintain and operate it has grown beyond the city’s annual dedicated sales tax revenue and budget. Unfunded and underfunded capital maintenance results in deferred maintenance which ends up costing more over time. Cost escalation and price inflation for materials and labor also contribute to diminishing purchasing power and the need to secure additional revenue. To support the city’s Long-Term Financial Strategy, of which revenue stability, sufficiency, and diversity are core principles, the city is advancing a TMF as part of the city’s 2026 Budget to cover the cost of a select array of the most critical underfunded and unfunded transportation maintenance needs. A TMF provides a predictable, reliable and scalable source of funding that is not subject to economic variability. Over the last 15 years, the city has analyzed a variety of potential funding mechanisms. This intensive community process culminated in two separate community working groups identifying the TMF as the most viable revenue mechanism. In February 2020, Boulder City Council directed staff to conduct a nexus fee study for the TMF. Council then prioritized the creation of a Long-Term Financial Strategy at its April 2024 retreat. Staff initiated TMF scoping later that summer and procured a consultant for the nexus fee study in fall 2024. Staff updated the Transportation Advisory Board in May 2025 and the city’s Financial Strategy Committee (FSC) in June 2025. Over the last few months, the city finalized the fee’s nexus study to determine rates that property owners would pay based on a person-trip methodology to establish the legal nexus for such a fee structure to comply with state law and concurrently initiated focused stakeholder outreach. As proposed, the TMF would raise as much as $6.2 million annually for underfunded and unfunded maintenance needs in its first full year of collection. Fees will be adjusted annually based on budget needs and increase as residential units or new commercial floor area are constructed. The fee study uses a person-trip methodology to allocate the fair share of transportation maintenance costs based on a property’s trip generation. Under the current design, single family detached residences would pay $54 per year and multi-family attached residences would pay $42 per year. To mitigate the impacts on low-income residents, a program with discounted rates for qualifying residents could be implemented similar to existing city relief programs, like the Food Tax Rebate Program. The amount that non-residential property owners, including owners of nonpublic schools, quasi-public building uses and religious uses would pay depends on their land

use category and size with rates ranging from $11 to $160 per 1,000 square feet. Federal and state institutions, like the University of Colorado and the Boulder Valley School District are not required to pay city fees but could make a contribution through Intergovernmental Agreements. Institutions such as private schools will be assessed a per student fee ranging from $7-$10 per student. To implement the fee, two new ordinances, 4-20-78 (fees) and 8-2-26 (originating) are required. The fees ordinance is moving forward as part of the 2026 Budget process. The purpose of this item is to introduce 8-2-26 which outlines the TMF purpose, rates property owners would pay, and operational aspects related to fee collection.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved then a new ordinance, Section 8-2-26, will be added to the Boulder Revised Code, authorizing the implementation of a transportation maintenance fee on the owners of improved properties in the city.

Define and adopt a modified motion

Council would need to define any modifications or amendments to the draft motion language, then move to adopt the modified ordinance.

Deny the motion or take no action

If this motion is denied, the fee will not be assessed, and city staff will need to reconsider strategies for investment in underfunded and unfunded transportation infrastructure maintenance needs.

Refer back to staff

If council refers this item back to staff, further edits or refinements to the proposed ordinance language will be incorporated based on council’s feedback and direction. Then staff would return to council again in the future for reconsideration of the implementation of a transportation maintenance fee.

Alignment with City Plans and City Council History Sustainability, Equity, and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area The establishment of TMF is consistent and aligned with the following SER goal areas:

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Accessible and Connected: This fee will provide revenue for underfunded and unfunded maintenance of our transportation system, including the maintenance of pavement, sidewalks, multi-use paths, safety treatments, bridges and bus stops. A well-maintained system is foundational for providing a safe, accessible, connected transportation system for residents, employees, businesses, and visitors. Economically Vital: A well-maintained transportation system is critical to economic vitality. The safe and efficient movement of goods and people is central to a thriving local and regionally connected city. This fee will provide additional funding for pavement maintenance to ensure safe and efficient freight delivery and transit service, and improved conditions for our city’s growing number of non-resident employees. Environmentally Sustainable: Well-maintained multimodal infrastructure is critical to reducing vehicle trips and mobile greenhouse gas (“GHG”) emissions. As the city’s multimodal system of roads, sidewalks, bike lanes, multiuse paths, and bus lanes has expanded over the years, the need for additional revenue to maintain the system has also increased. This fee will provide revenue to better maintain the city’s multimodal system and encourage more residents, visitors and employees to use multimodal travel options to reduce congestion and emissions. Healthy and Socially Thriving: A safe multimodal transportation system is an important component of a healthy and socially thriving city. A multimodal system that provides opportunities for active transportation and exercise leads to a healthier community. A multimodal system that provides safe and convenient access for individuals and families to social gathering places, commercial areas, and entertainment is advantageous to forming and growing a thriving community for all. Livable: The city faces many issues around affordability, and this fee will increase costs for residents, property owners, and businesses. A TMF is an effective funding mechanism to fairly allocate and spread the cost across the community. The TMF will have a favorable return on investment by reducing the long-term cost of capital maintenance. A well-maintained multimodal system is an important component in the development of accessible and connected 15minute neighborhoods. Responsibly Governed: The city’s transportation infrastructure is one of the most valuable assets the city is responsible for maintaining, operating and improving. Currently, the city must defer maintenance which negatively impacts the effectiveness and efficiency of our transportation system. Over time, deferred maintenance will end up costing the city more in the future. The city’s Transportation & Mobility dedicated sales tax is unable to keep up with maintenance costs and needs and it is the responsibility of the city to identify and

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secure a source of reliable, predictable and scalable funding to help maintain our transportation infrastructure now and in the future. Safe: A well-maintained transportation system is safer for all users and directly related to reducing traffic-related injuries and meeting the city’s Vision Zero goal. This fee will provide additional revenue to ensure that our infrastructure is safe and will be specifically allocated to maintain Vision Zero assets and markings. A well-maintained, resilient and reliable transportation system is a critical element in the city’s level of preparedness during emergencies and natural disasters.

Citywide Strategic Plan The TMF will contribute to the following strategies in the Citywide Strategic Plan: •

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Strategy 2. Advance efforts to enhance regional disaster prevention, preparedness, and response that leverage existing partnerships and prioritize city investments. Strategy 4. Strengthen equity-focused programs that help meet community members’ basic needs, including mental, physical, and behavioral health, financial assistance, and access to services. Strategy 6. Define and establish Boulder’s 15-minute neighborhood model. Strategy 7. Invest in and maintain a transportation system with an array of multimodal choices to reduce vehicle miles traveled and greenhouse gas emissions. Strategy 9. Increase community and ecosystem resilience to the current and future impacts of climate change. Strategy 10. Continue advancement toward the city’s goal of an eighty percent reduction in emissions and the community’s goal of a seventy percent reduction by 2030. Strategy 12. Implement organizational and financial best practices to continuously improve asset management, customer experience, and project and program performance. Strategy 14. Enhance collaborative efforts to support an inclusive, healthy, sustainable, and resilient local economy that builds on core economic strengths, promotes economic mobility, and aligns with community values and priorities.

Staff Notes Having a well-maintained transportation system contributes to many of the city’s SER framework goal areas and citywide strategic plan strategies. The TMF is a funding mechanism that can provide additional revenue for critical underfunded and unfunded maintenance needs. It provides a reliable, predictable and scalable source of funding. It uses a methodology to fairly allocate costs and spread the cost across the community to maintain lower rates for all.

Alignment with Additional City Plans The TMF is also aligned with other city plans and the Boulder Valley Comprehensive Plan (BVCP) •

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The BVCP calls for a safe, sustainable, accessible and connected multimodal transportation system. A foundational need to have such a system is a long-term strategy to maintain infrastructure. To maintain a transportation system over time, a reliable, predictable and scalable funding mechanism is necessary. In particular, the BVCP calls for the prioritization of investments in programs, services and facilities that align with the plan’s vision for a sustainable, accessible and equitable transportation system. Beginning with the 2008 Transportation Master Plan (TMP) through the current plan, transportation funding has been a key element of long-range planning. The 2014 TMP, which was initiated in 2012, specifically called for the city to diversify and increase transportation revenue, particularly for maintenance. As part of that TMP update process, the Transportation Advisory Board (TAB) lead a funding task force of community stakeholders which concluded that a TMF should be pursued. Since then, each and every TMP update has called for a long-range financial strategy which includes a TMF to provide additional revenue for unfunded and underfunded maintenance needs.

City Council History The city has been studying and vetting the Transportation Maintenance Fee as a mechanism to raise revenue for capital maintenance needs for over 17 years. The need to raise revenue and diversify transportation revenue sources was first identified in the 2008 Blue Ribbon Commission (BRC) report. The BRC report identified a variety of funding sources including a TMF. Following the BRC, the TMF and other potential transportation-specific mechanisms were studied, and the findings were published in the 2009 Transportation Funding Report In that report, it was determined that the TMF was likely one of the most viable and effective mechanisms to increase and diversify funding for maintenance and possibly transportation operations, improvements, programs and services. Following the funding report, staff continued to analyze the TMF and other potential mechanisms. From 2010 through the end of 2011, the idea of using TMF was consistently included in transportation funding updates, citywide budget updates and summarized in at the Transportation Study Session on November 9, 2010. At the January 24, 2012 Study Session, staff presented council with additional information on the maintenance fee and requested approval from Council to form a community task force led by the Transportation Advisory Board. In 2012, staff initiated

the update to the 2008 TMP which specifically highlighted the need to increase funding due to declining purchasing power and the growing financial impact of deferred maintenance. On December 18, 2012, staff presented the findings of the TAB lead funding task force to council which outline the principles to guide the design of a TMF. At the April 9, 2013 Study Session, staff shared for council consideration a proposed TMF design including estimated rates, optional revenue levels, and key policy decisions. However, following that study session, council was presented with another option during the citywide budget process, which was to transfer a $0.15 sales tax from Open Space and Mountain Parks to Transportation. On August 20, 2013, at its third reading, council officially transferred the sales tax from OSMP to Transportation. This sales tax is scheduled to revert to the general fund on December 31, 2029. The impact on Transportation & Mobility’s annual budget from this sales tax reverting to the general fund is estimated at $7.7 million starting in 2030. In 1967, voters passed a dedicated sales tax of $0.60 for transportation which is permanent. The increase from the $0.60 dedicated sales tax to $0.75 with the additional $0.15 tax transferred from OSMP, enabled the Transportation Department to fund additional maintenance, operations and enhancements. However, by the time of the TMP update that begin in 2018, increased costs and declining purchasing power again began to impact the city’s ability to maintain its transportation infrastructure, and a decision was made to rekindle the TMF work effort. As part of the 2019 TMP, the Funding Working Group (FWG) was formed to reanalyze funding options, including the TMP. With information provided by a comprehensive Transportation Funding Needs Assessment, the FWG identified a tiered approach to funding mechanism options with the TMF at the top of the list. The TMF had the highest level of consensus among the diverse stakeholder representatives of the FWG and was considered the best mechanism to provide reliable, predictable and scalable funding for transportation maintenance. The finding of staff’s work with the FWG was summarized for council on June 18, 2019. Following additional research into the TMF and the legal requirements to establish the fee, on February 4, 2020, staff requested Council support to initiate a fee study to establish the legal nexus and fee methodology with consultant support. Unfortunately, the TMF work effort was paused for several years following the COVID-19 pandemic. Despite the pause, the TMF remained included in budget conversations and was discussed at council’s 2021 Midterm Retreat as part of the Financial Strategy Study Committee’s work. Council also discussed the need to pursue new fee revenue at council’s 2024 retreat as part of its prioritization of the citywide Long Term Financial Strategy effort.

After a nearly 4-year hiatus, staff were asked to bring the TMF back to the forefront in late 2024. Staff, with support from TAB, initiated the nexus fee study and evaluated the inclusion of the TMF into the 2026 budget process. For the Overview and Update on the Long-Term Financial Strategy to council on April 3, 2025, the TMF was included in the list of new finance mechanisms under consideration. At the end of May, the first draft of the Nexus Fee Study was delivered to staff. In June 2025, the TMF was included in the city’s Long Term Financial Strategy and 2026 budget process. On June 18, 2025, staff presented the initial findings of the fee study and plans to include the TMF into the Long-Term Financial Strategy and 2026 budget to the council’s Financial Strategy Committee

Analysis The Colorado Supreme Court upheld TMF’s as a legal financing mechanism in the 1989 case of Bloom v. City of Fort Collins, 784 P.2d 304 (Colo.1989). The Court held that such a fee “is reasonably related to the expenses incurred by the city in carrying out its legitimate goal of maintaining an effective network of city streets.” In ruling in the city’s favor, the Court noted the following characteristics of a fee versus a tax: •

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Unlike a tax, a special fee is not designed to raise revenues to defray the general expenses of government, but rather is a charge imposed upon persons or property for the purpose of defraying the cost of a particular government service. The amount of special fee must be reasonably related to overall costs of governmental services being supported.

To design a TMF appropriate for the city of Boulder, Tischler-Bise was hired to conduct the required fee study that establishes the legal nexus between use of the transportation system and the fair share of costs for residential and non-residential property owners. Attachment B provides the final Transportation Maintenance Fee Study report which outlines the fee design and methodology. The methodology is based on person-trip generation. The desired revenue amount is based on identified underfunded and unfunded maintenance needs for which a legal nexus can be established. Projected revenue takes into account projected growth in population and employment and development projections by land use. During the next 10 years in Boulder, residential development projections indicate a population increase of 6,870 persons in 3,387 housing units. Nonresidential development projections indicate an employment increase of 7,871 jobs in approximately 3 million square feet of floor area. Table 1 below summarizes projected changes in land use over the next ten years.

Table 1: Boulder Projections Summary Boulder, Colorado

Population Housing Units Single Family Multi-Family Total Employment Industrial Retail Office & Other Services Institutional Total Nonres. Sq. Ft. (x1,000) Industrial Retail Office & Other Services Institutional Total

10-Year 2025 2026 2027 2028 2029 2030 2035 Increase Base Year 1 2 3 4 5 10 106,951 106,957 107,793 108,647 109,489 110,253 113,821 6,870 25,917 26,808 52,724

25,918 26,809 52,727

26,121 27,019 53,140

26,328 27,233 53,560

26,532 27,444 53,976

26,717 27,635 54,352

27,581 28,530 56,111

1,665 1,722 3,387

13,847 20,056

13,991 20,265

14,115 20,445

14,206 20,577

14,291 20,699

14,373 20,819

14,794 21,428

947 1,372

48,021 48,520 48,951 49,268 49,561 49,846 51,305 33,179 33,524 33,821 34,040 34,243 34,440 35,448 115,103 116,299 117,332 118,091 118,793 119,479 122,974

3,284 2,269 7,871

8,820 9,447

8,912 9,545

8,991 9,629

9,049 9,692

9,103 9,749

9,156 9,806

9,424 10,093

603 646

14,742 10,949 43,958

14,896 11,063 44,415

15,028 11,161 44,810

15,125 11,233 45,100

15,215 11,300 45,368

15,303 11,365 45,629

15,751 11,698 46,964

1,008 749 3,006

Person Trip Methodology Based on consultant input, a person-trip methodology for the TMF was identified as the most appropriate for Boulder. The other options included a vehicle trip generation and vehicle miles of travel approach. Local data from the Boulder Valley Employee Survey and the Modal Shift Report were used to estimate person-trip generation for different residential and non-residential land uses. The person-trip methodology is fully described in the Transportation Maintenance Fee Study provided in Attachment B on pages 14-24. The calculation takes into account estimated vehicle trips generated by land use types, mode share and vehicle occupancy to determine total person-trip generation. Once annual average weekday person-trip rates by residential and non-residential land uses are calculated, the estimated annual maintenance costs are used to determine the average cost per trip. TMF rates are determined by the cost per trip multiplied by the average person-trip demand factor for each land use and the estimated annual cost of the underfunded or unfunded maintenance needs.

In summary, the person-trip methodology used to establish annual TMF rates by land use is based on trip generation and statistically significant local transportation data to estimate use of the system and a property’s fair share of the cost to maintain the transportation system. Underfunded and Unfunded Maintenance Needs Based on a needs assessment, the total annual underfunded or unfunded need for maintenance activities included in the fee methodology is approximately $6.4 million per year in the first full year of fee collection. Annual underfunded and unfunded needs will change over time dependent on material and labor costs. Each year, TMF rates will need to be adjusted to account for cost escalation and budget needs. Table 2: Annual Unfunded or Unfunded Need by Maintenance Activity Annual Underfunded Maintenance Activities or Unfunded Need Pavement and Street Safety Asset Management $4,229,000 Bridge Asset Management $813,000 Sidewalk Repair $434,000 Multiuse Path Capital Maintenance $380,000 Roadway Markings Maintenance $296,000 Bus Stop Maintenance $271,000 Total $6,423,000 Administrative costs Administrative costs have been incorporated into each maintenance activity underfunded or unfunded needs. A total of $500,000 per year in administrative costs are incorporated into and spread proportionately across the listed maintenance activities. These costs are explained further in the Fee Revenue Collection subsection, below.

TMF Rates The amount a property owner pays is determined by the property-type’s typical use of the transportation system based on person-trip generation. The amount of person-trips generated on average by the property is used to calculate the owner’s fair share of the costs of maintaining the transportation system. Under the current fee design, the proposed rates for residential properties divided between attached and detached residential land uses and non-residential land uses are provided in tables 3 and 4 below.

Table 3: Annual Residential TMF Rates Residential Land Use Type Detached (fka Single-family) Multi- or attached (fka Multi-family)

Unit Dwelling Dwelling

Table 4: Annual Non-Residential TMF Rates Non-Residential Land Use Type Unit Commercial 1,000 Sq Ft Office 1,000 Sq Ft Institutional 1,000 Sq Ft Industrial 1,000 Sq Ft Research and Development 1,000 Sq Ft Warehouse Facility 1,000 Sq Ft Non-public university* Student Non-public elementary school* Student Non-public middle school* Student Non-public high school* Student *as defined by Colorado law

Annual TMF Rate $54 $42

Annual TMF Rate $160 $71 $97 $32 $72 $11 $7 $10 $9 $8

Annual Rate Adjustments Each year, the city adjusts fees through the annual budget process. If enacted, the TMF rates for residential and non-residential properties will also be adjusted annually. As stated earlier, one of the key aspects of a TMF is that it is scalable and can be adjusted to account for increased maintenance costs over time. Essentially, there are two ways to annually adjust TMF rates. The first is to adjust the fee based on inflationary indexes, like the Colorado Construction Index (CCI), so that the fee rate adjustments are in line with the cost of construction materials. The other option is a budget-driven approach, in which as part of the annual budgeting process, adjustments are made based on expected revenue and estimated maintenance costs. In this case, inflationary indexes can be part of the revenue need calculation along with other factors. Staff recommend using a budget-driven approach with annual TMF rate adjustments made as part of the annual budget process. This allows for the CCI to influence the rate adjustment and provides increased flexibility based on actual budget needs. The budget-driven approach ensures that the fee amount more directly matches a given year’s maintenance needs.

Revenue Projections The ten-year revenue projection included in the fee study considers anticipated growth in population, employment and new development. The estimated ten-year revenue projection by land use is provided in Table 5 below. Table 5: Projected Annual TMF Revenue by Land Use

Year Base Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

SingleFamily

MultiFamily

Comm.

Office

Instit.

Indust.

$54 per unit

$42 per unit

$160 per KSF

$71 per KSF

$97

$32

per KSF

per KSF

Hsg Unit 25,917 25,918 26,121 26,328 26,532 26,717 26,898 27,075 27,248 27,417 27,581

Hsg Unit 26,808 26,809 27,019 27,233 27,444 27,635 27,823 28,006 28,185 28,360 28,530

KSF 9,447 9,545 9,629 9,692 9,749 9,806 9,866 9,920 9,972 10,037 10,093

KSF 14,742 14,896 15,028 15,125 15,215 15,303 15,396 15,481 15,562 15,664 15,751

KSF KSF 10,949 8,820 11,063 8,912 11,161 8,991 11,233 9,049 11,300 9,103 11,365 9,156 11,435 9,212 11,497 9,262 11,558 9,311 11,634 9,372 11,698 9,424 10-Year Total Revenue

Yearly Revenue $6,423,000 $6,463,700 $6,518,438 $6,564,295 $6,607,940 $6,649,181 $6,691,546 $6,731,138 $6,769,565 $6,812,957 $6,851,786 $73,083,546

While the TMF will shore up funding for selected critical maintenance needs, it will only cover a portion of the city’s overall transportation funding needs. Transportation funding in the city comes from a variety of sources, including local sales tax as well as external, competitive regional, state, and federal grants that supplement this limited local funding to realize Boulder’s transportation goals and climate commitment. The TMF will allow the city to have flexibility in meeting core maintenance needs while continuing to work on the long-term, overall transportation funding strategy. State and Federal Institutions; School District. State and federal institutions and the local school district, including the University of Colorado, the Boulder Valley School District and the federal labs (NIST/NOAA) are not required to pay city fees. To determine each property’s fair share of transportation maintenance costs based on their proportion of person-trip generation, those state and federal institutions and the school district are included in the methodology so that their fair share of costs is not borne by residential and commercial property owners. Since

they are not required to pay but are included in the methodology which calculates expected revenue, the actual revenue collected by the city will be lower. As in past outreach and engagement efforts, staff is currently working with state and federal institutions and with BVSD to see if a voluntary contribution towards the maintenance of city transportation infrastructure can be negotiated through Intergovernmental Agreements (IGAs) that can be finalized at any time prior to or after citywide implementation of the fee. The estimated annual revenue contributions by the largest institutions that are not required to pay the fee are: • • •

BVSD: $100,000 Federal Labs: $90,000 University of Colorado, Boulder: $270,000

Snow and Ice Maintenance Under the current fee design, snow and ice response is not included in the list of maintenance activities because the focus for fee revenue of the previous staff efforts, and the work of the 2019 Funding Working Group (FWG), was capital maintenance rather than operational maintenance. At that time, the highest priority for the fee was street repair and pavement capital maintenance. Capital maintenance activities are focused on maintenance, repair and replacement of infrastructure. Operational maintenance activities, like snow and ice response, were a lower priority and were not considered a critical maintenance activity for additional fee revenue at that time so were not included in the study. Given the increased focus on snow and ice response in our community today, council may wish to consider whether the TMF could also support added activities such as snow and ice response, which we suggest could be done through a 2026 or future work plan item to bring forth an update to the ordinance. This would allow staff to perform the required legal analysis around such an inclusion into an updated Transportation Maintenance Fee ordinance and revise the fee nexus study before the ordinance update can be brought forward for council consideration. Including snow and ice response into the list of maintenance activities supported by the transportation maintenance fee will, in turn, increase rates paid by property owners and the projected revenue of the fee. City staff estimate the underfunded need for snow and ice response is $800,000 annually to maintain current level of service. This would increase the total amount of revenue generated from $6,423,000 to an estimated $7,223,000, thereby resulting in modest increases to the rates paid by property owners. For example, the annual rate for the detached residential land use type is estimated to

increase from $54 to $60, and from $42 to $47 for the multi- or attached residential land use type. In addition to the above, the November 2025 ballot language for the permanent extension of the Community, Culture, Resilience, and Safety (CCRS) Tax will have the ability, if passed, to also supplement snow and ice maintenance. Fee Revenue Collection There are options for how the city collects fee revenue from residential and nonresidential property owners. One option is to modify the current utility billing system to add the TMF as an additional line item on the city utility bills. Another is to use the existing utility billing system but send the TMF out as a separate bill. Both options would require significant investment in system upgrades and require additional staff to implement, manage the billing system and provide customer service for a new city fee. A third option is to identify another billing system to collect the fee from property owners. One possible system is Workday, which the city currently uses to manage HR and Finance functions, purchase orders, and invoicing. Platform components can be added to Workday to send out invoices to property owners and manage collections. If the TMF maintenance fee is enacted through ordinance adoption, staff work effort will focus on identifying the most cost effective and efficient collection system and proceed with the required modifications and updates to implement the fee program. It is estimated that fee collection could begin as soon as mid-year 2026.

Equity Analysis City staff used the Racial Equity Instrument to evaluate the potential impacts of the TMF on vulnerable or underrepresented populations in the city. A well-maintained transportation system benefits the entire community and the TMF will have a positive return on investment by keeping long-term maintenance costs lower with adequate annual maintenance expenditures. A well-maintained multimodal system is also safer, provides increased access and connectivity, and reduces vehicle trips and emissions for a healthier community. Person-trip methodology of the fee spreads the cost out across residential and non-residential properties keeping rates as low as possible for all, including lower-income residents. The equity analysis impacted the design of the fee especially in regard to residential land uses and the choice of using the person-trip methodology. Under the person-trip methodology, non-residential property owners contribute roughly two-thirds of the total revenue with residents contributing the other third so equity populations experience a lesser impact.

Furthermore, the fee design differentiates between single-family detached properties and multi-family attached properties. In general, families living in detached properties have higher household incomes compared to attached multi-family units. Attached multi-family properties also, on average, produce less trips and therefore have a lower rate based on their lower proportional use of the system, according to Institute of Traffic Engineers (ITE) trip generation data which is used in the fee study. In addition, under the current fee design, manufactured, mobile homes are exempt from the fee. Staff considered adding a size component to the residential categories that would increase rates for larger residences who produce more trips according to ITE trip generation data, and, in general, are associated with higher household incomes. However, residential unit sizes of the more than 40,000 residences in the city are not readily available and the time and cost to include that data in the current fee design was deemed too great to include at this time. However, the fee study consultants have included a rate structure based on residential unit size that could be incorporated into the fee design in the future to further mitigate the impact on low-income households. To further reduce the impact of this added fee on low-income populations, rate reductions and/or discounts can be integrated into the fee collection process like programs currently offered by the city, such as the Food Tax Rebate program. Staff recommend that any rate reductions or discounts be included during the implementation process to the extent possible based on available data.

Fiscal Note Estimated Fiscal Impact Narrative If the proposed TMF is implemented mid-year in 2026, staff estimate an additional $2.3 million in 2026 revenue. In the first full year of collection in 2027, staff estimate a revenue increase of approximately $6.2 million. In addition, not reflected in the below three-year fiscal impact tables through 2027, the 0.15% dedicated transportation sales & use tax will shift to the General Fund beginning in 2030. While currently programmed to continue to support transportation capital maintenance, the 0.15% shift to the General Fund will un-dedicate the currently dedicated funding for transportation purposes and will be subject to annual city budget proposal processes and council approval – a process that is aligned with the Blue Ribbon Commission’s recommendations as well as the city’s Long Term Financial Strategy goals. In order to proactively ensure we continue to maintain flexibility and sufficiency of funding for transportation maintenance, current levels of service and state of good repair of the transportation system, and continue addressing critical maintenance backlogs on the system and as the city continues adding new safety improvements, the city will rely on both the 0.15% sales tax and Transportation Maintenance Fee revenue into the future.

Current Year Estimated Fiscal Impact Fund(s): Transportation Fund Department(s): Transportation & Mobility Program(s): Transportation Maintenance, Transportation Operations, Transportation Planning and Transportation Capital Improvement Program

FY 2025 Budget

FY 2025 Estimated Impact

FY 2025 Net Change

Beginning Fund Balance

$19.3M

$0

$19.3M

Total Forecasted Revenue

$56.1M

$0

$56.1M

Total Estimated Expenses

$69.6M

$0

$69.6M

Ending Fund Balance(s) After Reserves

$1.4M

$0

$1.4M

FTE

95.3

0

95.3

Item

Three-Year Estimated Fiscal Impact

Item

FY 2025

FY 2026

FY 2027

Total Forecasted Revenue

$0

$2.3M

$6.0M

Total Estimated Expenses

$0

$2.3M

$6.0M

Net Estimated Impact

$0

$0

$0

Climate, Resilience, and Sustainability Considerations A TMF will provide additional revenue for underfunded and unfunded transportation maintenance needs. Well-maintained transportation infrastructure is fundamental to having a safe and convenient multimodal system that provides viable travel options and reduces vehicle trips and emissions. It is also critical to have a well-maintained transportation system when reacting to emergencies and natural disasters for the safe and fast deployment of first responders and evacuation of residents. Adequately maintaining our transportation infrastructure is central to responsible governance and contributes to long term financial and economic sustainability.

Community Engagement Since 2009, city staff have analyzed and vetted the TMF and clearly established the need to increase funding for maintenance in the face of rising costs and declining purchasing power. The TMF was evaluated by two separate community and stakeholder working groups with representatives from the business community, the Boulder Chamber, major employers, state and federal institutions including University of Colorado, Boulder Valley School District, the federal labs, and citizen representatives. Both working groups concluded that the TMF was the top choice to address Transportation & Mobility’s underfunded and unfunded maintenance needs. The methodology fairly allocated costs based on a person-trip generation related to land use and, in the case of non-residential uses, size of the structure. The TMF spreads the cost to maintain the system across residential and non-residential property owners to minimize the fee amount paid by any single land use type. For the most recent work in 2025, staff are using an “inform” level of engagement given the previous amount of analysis and engagement conducted over many years. Staff have conducted focused engagement with state and federal institutions and BVSD who are not required to pay city fees but could make voluntary contributions through Intergovernmental Agreements (IGAs). Engagement meetings have been conducted with the University of Colorado, and Boulder Valley School Districts Additionally, city staff have partnered with the Boulder Chamber to identify and reach major employers, members of the development community, and business leaders for focused engagement. If Council authorizes this TMF through the proposed ordinance, then staff will conduct additional engagement efforts to inform residential and non-residential property owners of the fee, its purpose, the rate methodology, and use of revenue. Transportation Advisory Board Since the formation of the TAB-led Funding Task Force in 2012 to their participation in the 2019 Funding Working Group, TAB has consistently supported the TMF. At their

September 2025 regular meeting, TAB passed the following motion supporting the TMF and encouraging council to enact the fee, which was contained in a letter to council issued via email on September 9, 2025. Staff presentation and TAB feedback on adding a new Section 8-2-26, “Transportation Maintenance Fee,” B.R.C. 1981, implementing a fee to offset the cost of maintaining transportation infrastructure and facilities within the city. The Transportation Advisory Board (TAB) endorses the City of Boulder's proposed Transportation Maintenance Fee (TMF), recognizing that: •

The TMF provides a stable and predictable source of funding for essential transportation maintenance.

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The TMF ensures that both residential and commercial properties contribute fairly, based on person-trip generation.

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The TMF will free up a portion of existing sales tax revenue to provide the required 20% local matching funds for federal and state transportation grants, enabling investment in Core Arterial Network projects, Vision Zero safety initiatives for all modes, and comprehensive multimodal system improvements throughout the community.

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Equity considerations, such as exemptions or reduced rates for low-income households, are an important part of implementation.

Therefore, TAB supports City Council and staff advancing the Transportation Maintenance Fee for inclusion in the 2026 budget.

Workplan Considerations Implementing a TMF program will primarily involve Transportation & Mobility, Finance, and Utilities and is currently included in each department’s 2026 workplans. Staff will reevaluate timing and specific workplan priorities based on the implementation and fee collection method that is selected.

Next Steps for City Council Second reading of the ordinance is scheduled for October 23, 2025.

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Attachments Attachment A: Proposed Ordinance 8719 Attachment B: Transportation Maintenance Fee Study