Agenda Memo

City of Boulder City Council Agenda Item Meeting Date: October 23, 2025 Agenda Title Consideration of the following pertaining to the 2026 budget of the City of Boulder University Hill Commercial District Fund (formally known as the University Hill General Improvement District) Fund: Consideration of a motion to adjourn as the Boulder City Council and convene as the University Hill Commercial District Board of Directors; and 1. Consideration of a motion to adopt Resolution 231 concerning the City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) adopting a budget for the fiscal year beginning January 1, 2026; and setting forth related details; and 2. Consideration of a motion to adopt Resolution 232 establishing the 2025 City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) Property Tax Mill Levy for payment of expenditures, in part, of the district during the fiscal year 2026, beginning January 1, 2026; and setting forth related details; and 3. Consideration of a motion to adopt Resolution 233 appropriating money to defray the expenses and liabilities of the City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) for the 2026 fiscal year beginning January 1, 2026; and setting forth related details; and Consideration of a motion to adjourn from the City of Boulder University Hill Commercial District Board of Directors and convene as the Boulder City Council

Staff Contact •

Charlotte Huskey, Budget Officer, Finance Department

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motions: Motion to adjourn as the Boulder City Council and convene as the City of Boulder University Hill Commercial District Board of Directors; and 1. Motion to adopt Resolution 231 concerning the City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) adopting a budget for the fiscal year beginning January 1, 2026; and setting forth related details; and 2. Motion to adopt Resolution 232 establishing the 2025 City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) Property Tax Mill Levy for payment of expenditures, in part, of the district during the fiscal year 2026, beginning January 1, 2026; and setting forth related details; and 3. Motion to adopt Resolution 233 appropriating money to defray the expenses and liabilities of the City of Boulder University Hill Commercial District (formerly known as the University Hill General Improvement District) for the 2026 fiscal year beginning January 1, 2026; and setting forth related details; and Motion to adjourn as the City of Boulder University Hill Commercial District Board of Directors and convene as the Boulder City Council.

Executive Summary The purpose of this item is to adopt and appropriate the 2026 budget for the University Hill Commercial District Fund (formally known as the University Hill General Improvement District) (“UHGID”) Fund as well as set the 2025 UHGID property tax mill levy. These resolutions (Attachments A-C) adopt the 2026 budget, establish the 2025 property tax mill levy and appropriate funding presented to council in the City Manager’s 2026 Recommended Budget for UHGID. The City Manager’s 2026 Recommended Budget for the University Hill Commercial District Fund was proposed at $562,684. To comply with Article X, Section 20 of the Colorado Constitution, commonly known as TABOR, a mill levy credit of 3.512 mills is necessary. Based on TABOR calculations, staff is recommending the following mill levy: Base Mill Levy 4.984

Less: Mill Levy Credit (3.512) Net Mill Levy 1.472

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved the University Hill Commercial District will have an appropriated and adopted budget for the 2026 fiscal year.

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 will 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.

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 second reading.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area The city develops the annual budget through the lens of the overarching SER Framework, which serves as the foundation to budget decision-making and resource allocation. The 2026 University Hill General Improvement District Recommended Budget continues to align and uplift investments supporting Livable and Economically Vital through investments in the University Hill General Improvement District.

Citywide Strategic Plan The annual budget development process represents a key pillar of the annual workplan for the city’s Budget Office, which focuses on forecasting, budgetary and fiscal planning with departments and in support of the organization, and alignment of the city’s resources to the city’s SER Framework and continued work in outcome-based budgeting. Staff Notes N/A - this is a standard budget item.

Alignment with Additional City Plans N/A - this is a standard budget item.

City Council History In past years, council has asked for additional information related to UHGID revenue limitations. There are two State laws limiting revenue collections in Colorado. They include state statute 29-1-301, C.R.S., known as the “5.5%” revenue limit and Article X, Section 20 of the Colorado Constitution, commonly known as the “Taxpayer Bill of Rights” or TABOR. The TABOR limit for revenue is a formulaic limitation on the annual growth of district revenues, meaning TABOR limits the amount of revenue that may be kept in any particular year (including taxes and fees) under a rigid revenue cap, and requires a refund of excess revenue received in any particular year absent voter approval to keep the excess. Voters in local municipalities and districts can remove these limits, by majority approval of a ballot issue in a November election. Entities doing so can remove both limits with a single ballot measure. No ballot measures have been introduced to remove either limitation for UHGID. TABOR includes two limitations on the amount of property taxes that UHGID can collect. The first sets a cap on the amount of mills levied at the prior year amount unless increased by voter approval. The second limits revenues to prior year revenue collection levels plus inflation and growth, the rigid revenue cap mentioned above. Each entity (including GIDs separately from the city) must meet both requirements (the “nesting” effect of TABOR). When assessed property values increase so that the revenues UHGID collects exceed the combination of growth and inflation in the district, the mill levy must be adjusted downward to ensure revenue collections stay within TABOR limits. In so doing, the new mill levy cannot be increased to the previous number without voter approval (this is called the “ratchet down” effect of TABOR). To avoid this, a mill levy credit, rather than a permanent reduction, has been applied. The credit is considered temporary (one year only) so has the effect of reducing revenue collections by applying a lower mill levy for the next year, without permanently reducing the cap on

the amount of mills levied for future years. As shown above, this credit is calculated annually when setting the mill levy for UHGID, in order to ensure compliance with TABOR.

Analysis Equity Analysis The city develops the annual budget using the SER Framework, which leads with decision-making as aligned to the goal areas and objectives underneath the sustainability, equity, and resilience umbrella. While these three pillars represent the overarching goals for the city, equity considerations are embedded throughout the annual budget development process, including the city’s efforts to shift from a traditional increment-based budgeting approach to outcome-based budgeting, focusing more on the outcomes of our investments and how those align to the greater SER Framework.

Fiscal Note The 2026 Recommended Budget presented for City Council consideration proposes a total budget of $521.0 million, including a $407.7 million Operating Budget and $113.3 million Capital Budget. Within the 2026 Recommended Budget online budget book, the Budget in Brief and Budget Highlights provide a comprehensive summary of the significant fiscal changes included within the budget, including fiscal spending plans across all funds, departments, and programs areas in the city’s budget. The attached resolutions represent the spending level appropriation and property tax mill levy proposed to City Council as part of the University Hill Commercial District Fund 2026 Budget.

Climate, Resilience, and Sustainability Considerations The city develops the annual budget through the lens of the overarching SER Framework, which serves as the foundation to budget decision making and resource allocation. The 2026 Recommended Budget continues to align and uplift investments supporting resilience and sustainability, including in areas such as wildfire resilience, flood mitigation, and city facility renovations and infrastructure projects that will result in reduced building energy consumption and built with sustainably sourced materials.

Community Engagement The University Hill Commercial Area Commission unanimously recommended City Council, serving as the board of directors for the University Hill General Improvement District, adopt the City Manager’s 2026 Recommended Budget appropriating money to defray expenses and liabilities pertaining to the University Hill General Improvement

District fund. They also stated, "Given that the 2025 UHCAMC priorities include the near-term and long-term fiscal resiliency of the UHGID fund, we urge city council to consider in future years reinstating the General Fund transfer to UHGID as the only way to maintain fiscal resiliency for the district."

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

Next Steps for City Council N/A - this is a standard budget item.

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Attachments Attachment A - Resolution 231 Attachment B - Resolution 232 Attachment C - Resolution 233