Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: April 2, 2026 Agenda Title Introduction, first reading, and consideration of a motion to order published by title only Ordinance 8748 enacting Chapter 8-12, “Metropolitan Districts,” B.R.C. 1981; 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 introduce and order published by title only Ordinance 8748 enacting Chapter 8-12, “Metropolitan Districts,” B.R.C. 1981; and setting forth related details

Executive Summary This item serves as the first reading of a 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, Proposed Ordinance 8748 (Attachment A) and a model service plan are being brought forward to ensure that any future MDs align with city goals regarding economic vitality, infrastructure sustainability, and financial transparency.

Proposed Ordinance 8748 (enacting Chapter 8-12) establishes the application and review criteria for the formation of MDs, while the Draft Model Service Plan (Attachment B) provides a standardized set of operating guidelines, including strict debt limits and asset control requirements. The Model Service Plan will be considered with an accompanying resolution at second reading and potential adoption of Proposed Ordinance 8748 on April 16, 2026. However, analysis of both Proposed Ordinance 8748 and the Model Service Plan are provided in this Memorandum. Staff has posted both the Proposed Ordinance and the Draft Model Service Plan for public comment through March 13th. Staff has incorporated public comments, when supportable, into the Proposed Ordinance, but continues to work on reviewing and analyzing comments received with respect to the draft model service plan.

Council Action Options Option

Outcome

Approve motion language as drafted

Council will hold a public hearing and consider adoption of Proposed Ordinance 8748 at its April 16 city council meeting.

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.

Deny the motion or take no action

Proposed Ordinance 8748 would not proceed to second reading.

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.

Analysis MDs are quasi-municipal corporations and political subdivisions of the state of Colorado, frequently used to finance public infrastructure. While governed primarily by Title 32 of the Colorado Revised Statutes, the City of Boulder maintains the authority to impose stricter local requirements. On January 22, 2026, staff presented a policy framework focused on “commercial-only” districts and financial guardrails. Council provided feedback emphasizing the need for asset dedication, high non-residential thresholds, and limitations on debt. This feedback has been directly incorporated into Proposed Ordinance 8748 and the draft Model Service Plan. Ordinance 8748

Legislative Intent, Purpose, and Policy Preferences The primary intent of Proposed Ordinance 8748 is to leverage MDs as a strategic tool for enhancing the community’s economic vitality and overall quality of life. By establishing a formal framework for funding necessary local and regional public improvements, the ordinance ensures that development projects yield long-term, sustainable benefits. Specifically, these districts are intended to catalyze job creation, foster the expansion and attraction of diverse industries, and provide enhanced public infrastructure and high-quality public spaces essential for the city's continued economic and social well-being. Importantly, Proposed Ordinance 8748 codifies the requirement that at least 90 percent of a district’s assessed value and total square footage consist of non-residential uses, ensuring that MDs are utilized as targeted tools for commercial and industrial infrastructure rather than residential development. Process for Consideration of a Service Plan The model service plan will serve as the standardized template for the formation and operation of any proposed MD. The primary regulatory functions include: •

Standardization: It establishes a uniform form and content that all petitioners must substantially follow, ensuring consistency across different districts.

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Regulatory Guardrail: It provides a baseline of the city’s expectations. While petitioners may request deviations, they must provide a detailed rationale and justification for each one.

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Preservation of Authority: The existence of a model service plan does not limit the City Council’s ultimate discretion. Council retains the sole authority to approve, disapprove, or condition any plan, regardless of its alignment with the model.

The proposed Service Plan submittal process is designed to ensure a rigorous administrative review before reaching the City Council. 1. Concept Review Before a formal application is accepted, unless otherwise agreed to by the city, petitioners undergo a conceptual review. •

Timing: A concept letter and fee must be submitted at least 45 days before the proposed formal filing.

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Requirements: The letter must include a summary of the development, the public benefits provided, a description of services, an area map, and any anticipated deviations from the model plan.

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City Feedback: The city provides non-binding, preliminary feedback within 30 days. This review is valid for 12 months.

2. Administrative Review and Determination If undertaken, once the concept review is completed, the petitioner may file the formal service plan. •

Deadlines: o

November Elections: Submission is due by April 30 (exception for any service plans submitted within the first six months after Proposed Ordinance 8748 is enacted).

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May Elections: Submission is due by October 31 of the preceding year.

The filed plan undergoes a comprehensive interdisciplinary evaluation. •

Departmental Analysis: Relevant city departments and the City Attorney’s Office review the plan for compliance and financial viability.

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Refinement: The city may request additional information or meetings with the petitioner’s legal and financial consultants to address specific comments.

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City Manager Determination: Following a written report, the City Manager determines if the plan is “ready for consideration.” If deemed ready, the city manager schedules the item for a City Council meeting.

3. Final Council Determination City Council exercises sole discretion over the final outcome. Proposed Ordinance 8748 establishes a clear framework for City Council’s oversight of MD formation, categorizing the review process into mandatory, discretionary, and conditional actions: •

Mandatory Disapproval Criteria: The City Council is required to disapprove of a service plan unless the petitioner provides satisfactory evidence of four key conditions: 1. A demonstrated and projected need for the organized services. 2. The inadequacy of existing services to meet present and future needs. 3. A district’s capability to provide services in an economical and sufficient manner.

4. The financial ability of a proposed district to reasonably discharge its intended indebtedness (i.e. realistic and sustainable plan to pay back any debt). •

Broad Discretionary Authority: Beyond the mandatory criteria, the council maintains the ultimate authority to approve, disapprove, or approve with conditions a service plan based on any information or criteria it deems relevant, provided the decision is not arbitrary or capricious.

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Conditional Approval and Modification: Council may grant conditional approval, requiring the petitioner to submit additional information, modify the plan, or enter into specific agreements with the city. Final approval remains contingent upon meeting these specified conditions.

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Postponement: Council may postpone or continue the consideration of a service plan to a later date as necessary to ensure a thorough review.

Compliance and Reporting Proposed Ordinance 8748 establishes rigorous ongoing requirements to ensure that MDs remain accountable to the city throughout their lifecycle. These provisions cover infrastructure, legal agreements, transparency, and dissolution. •

Intergovernmental Agreement (IGA): Following formation, every district is required to enter into a formal IGA with the city. This agreement serves as a binding legal commitment that the district will adhere to every term, condition, and limitation set forth in its approved service plan.

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Infrastructure Dedication and Standards: A central requirement of the framework is that districts do not maintain private control over public infrastructure.

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Mandatory Dedication: Districts must dedicate all public improvements (roads, utilities, etc.) to the city or the appropriate public jurisdiction unless otherwise agreed to by the city. Operation and maintenance by the district are only permitted for specific assets as outlined in an IGA.

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City Construction Standards: To ensure long-term sustainability, all improvements must be designed and constructed to the city’s adopted standards and specifications. No work may begin until the city has approved civil engineering and other plans and issued the necessary permits.

Transparency and Public Disclosure: To protect future property owners and businesses, Proposed Ordinance 8748 mandates high levels of transparency:

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Notice to Purchasers: Districts must ensure that all property buyers receive written notice regarding the “Maximum Debt Mill Levy” and a district's authority to collect fees. This notice must be filed with the city before any debt is issued.

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Public Access: Each district must maintain a transparency website with electronically accessible information as required by state law.

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Annual Reporting: By October 1 of each year, a district must file a comprehensive annual report with the city manager and city clerk to document its financial and operational status.

Modifications and Unauthorized Departures •

Material Modifications: Any “basic or essential” change to how a district operates or what it builds requires a formal petition and a new round of City Council approval, similar to the original application process.

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Sanctions for Violations: Any departure from the approved plan (excluding minor technical or mechanical adjustments) is considered a violation of the city code and subjects a district to formal sanctions.

Dissolution Requirements: Proposed Ordinance 8748 ensures that districts do not exist indefinitely if they are inactive or have completed their mission. •

Inactivity Clause: If a district fails to issue debt within five years of its creation, it must begin dissolution proceedings unless the City Council grants a specific extension.

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Final Dissolution: Once the City Council determines that a district’s purposes have been fulfilled, the district must petition for dissolution. However, it cannot dissolve until all outstanding debts and financial obligations have been fully discharged or paid.

Enforcement and Sanctions Proposed Ordinance 8748 establishes a comprehensive enforcement regime to ensure MD compliance. Should a district engage in an unauthorized material modification or fail to adhere to its approved service plan, the City Council (or the city manager, if delegated) is empowered to impose the following sanctions: •

Permit and Operational Blocks: The city may withhold permits, project authorizations, or general cooperation, effectively halting a district's construction or service delivery.

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Legal and Injunctive Actions: The city may seek court orders (injunctive relief) to stop prohibited activities and exercise any legal remedies available under the Special District Act.

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Contractual Enforcement: The city may enforce all legal remedies provided under the terms of an IGA that a district is required to sign upon formation.

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Cumulative Remedies: The city’s enforcement powers are cumulative and nonexclusive, meaning the city may pursue multiple avenues of redress simultaneously rather than choosing only one option.

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Cost Recovery: The burden of enforcement costs falls entirely on the noncompliant district. A district is required to reimburse the city for all fees and costs incurred in the enforcement process, including reasonable attorney’s fees. This provision ensures that the costs of correcting district non-compliance are not borne by the general taxpayers of the city.

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.

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Maintenance Limits: A district is generally prohibited from ongoing operations and maintenance (O&M) of these assets unless specifically authorized by an IGA.

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Prohibited Activities: The service plan explicitly bans a district from exercising powers related to fire protection, television relay, or golf course construction.

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Eminent Domain: This service plan stipulates that a district has no power of eminent domain unless City Council grants it through a separate, project-specific 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 ta 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 XII - XIV) 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

$17,735,173

$15,000

$17,750,173

Ending Fund Balance(s) After Reserves

$12,646,701

$0

$12,646,701

FTE

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 At the January 22, 2026, City Council meeting, City Council directed staff to solicit feedback from the development community on Proposed Ordinance 8748 and model service plan. Proposed Ordinance 8748 and draft model service plan were made available publicly on March 3 and comments were solicited through the drafting of this Memorandum. The city received comments from four firms or individuals on the proposed ordinance and draft model service plan. Staff is analyzing comments submitted to the city. Most of the comments were pertaining to the draft service plan. Staff will provide an overview of those comments and a staff response as a part of the April 16 meeting packet. As it relates to the proposed ordinance, one area of comments focused on some language in the purpose of the ordinance that could be interpreted to limit the type of infrastructure improvements allowable by MDs. Staff has removed this language in the Proposed Ordinance 8748 to help clarify this point. Another area of comments on the proposed ordinance related to feedback on the calculation of determining the 90% commercial threshold, including a request to look at total square footage of residential versus commercial within proposed buildings. Staff believes that a calculation of projected assessed value and square footage of lots size is easier to calculate administratively. The last substantive area of feedback on the proposed ordinance was on the five-year dissolution timeline. Staff believes that it is an important guardrail to include the automatic dissolution trigger if an MD has not issued debt within five years of the approval of the its service plan, unless City Council grants an exception. Other feedback associated with the draft model service plan will be analyzed as a part of the April 16 packet.

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 The second reading and public hearing of Proposed Ordinance 8748 and the Model Service Plan are scheduled for consideration on April 16, 2026.

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Attachments Attachment A – Proposed Ordinance 8748 Attachment B – Draft Model Service Plan Attachment C – Model Intergovernmental Agreement Attachment D – Model Property Owner Notice