Matters Memo

City of Boulder City Council Agenda Item Meeting Date: April 23, 2026 Agenda Title Airport Discussion

Staff Contact • • •

Blythe Bailey, Director, Transportation and Mobility Eric Vences, Airport Manager, Transportation and Mobility Luis Toro, Senior Counsel, City Attorney’s Office

Executive Summary The purpose of this study session is to provide updates to the city council regarding the current operations and financial state of the Boulder Municipal Airport (BDU or BMA) and seek feedback regarding its future direction. The future of BDU has two potential paths: whether to maintain indefinite operation of the airport (Scenario 1) or to retain the option for its future lawful closure and potential reuse (Scenario 2). The intended outcome of this item is policy direction that can inform future airport budgetary decisions. Beginning in 2022, the City initiated an Airport Community Conversation to establish a foundation for this decision. The city engaged nearby residents, airport users, and the broader community across a wide spectrum of perspectives, surfacing both the perceived value of the airport (economic activity, emergency response, and aviation services) and key concerns (noise, leaded fuel, and land use opportunity cost). In July 2024, staff presented City Council with these findings alongside an initial framing of financial and regulatory constraints. At that time, Council deferred a decision, in part due to a near-term ballot initiative that would have posed the question to voters, and in part due to active litigation with the Federal Aviation Administration (FAA). The ballot initiative was later withdrawn, and related litigation has since been dismissed (see Attachment C), bringing the city to a renewed moment for consideration.

By making the operational decision since 2020 not to accept federal grants that would extend grant assurances beyond approximately 2040, the City has preserved a potential—though not guaranteed—pathway to closure and reuse at that time. However, the absence of grant funding has significant financial implications. Importantly, the court outcome indicates that a definitive determination regarding the City’s ability to close and repurpose the airport is unlikely before 2040, meaning current financial pressures will persist in the interim. Under Scenario 2—where the future of the airport remains uncertain until no sooner than 2040—the City will need to subsidize the airport fund at a minimum to sustain federally required safety and operational standards, requiring trade-offs with other programs and investments. Under Scenario 1—where the City commits to indefinite airport operations—eligibility for federal funding is restored as an operational option for staff, substantially reducing long-term financial exposure and potentially eliminating the need for ongoing subsidy. In essence, Scenario 2 preserves some possibility of long-term optionality at a measurable near- and mid-term cost, while Scenario 1 forecloses that option but provides greater financial stability and access to external funding. The impacts of the policy direction include potential land value, ongoing operational cost, and trade-offs from other City resources.

Questions for Council 1. Does Council have any questions regarding the information presented on existing or future operation of the airport? 2. Does Council require further information or support for addressing the policy question of whether or not to operate the airport indefinitely or to continue to target the future possibility of re-use of the land as soon as lawful to do so? 3. Does Council support scenario one (indefinite operation of BMA) or two (maintain closure opportunity)?

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area This item connects to the safe, accessible and connected, responsibly governed, and economically vital SER goal areas.

Citywide Strategic Plan Safe: This item meets the safe SER goal area through strategy 2 advance efforts to enhance regional disaster prevention, preparedness, and response that leverage existing partnerships and prioritize city investments.

Accessible and Connected: This item meets the accessible and connected SER goal area to achieve a multimodal transportation system that connects people with each other and where they want to go. Responsibly governed: This item meets the responsibly governed SER goal area through strategy 12 implement organizational and financial best practices to continuously improve asset management, customer experience, and project and program performance. Economically vital: This item meets the economically vital SER goal area through 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.

Alignment with Additional City Plans The following references show the wide range of background and context in the form of references to the airport in currently adopted, past plans. Summaries of the excerpts and/or citations are shown below each sub-heading. Boulder Valley Comprehensive Plan - 2017 Update – Section 6.23 “...The airport will continue to ensure it meets the needs of the community by providing a safe environment for aviation business and business-related travel, scientific and research flights, recreation and tourism, flight training and vocational education, aerial fire-fighting, emergency medical flights as well as flood and other disaster-related support for the city and county. The city will seek to mitigate noise, safety and other impacts of airport operation while assuring that new development in proximity will be compatible with existing and planned use of the airport. At the time of the next Airport Master Plan, the city will work with the community to reassess the potential for developing a portion of the airport for housing and neighborhood-serving uses.” DRAFT: Boulder Valley Comprehensive Plan – 2026 Draft Update – Policy 76 “The city continues to maintain the BMA as a safe environment for aviation business and business-related travel, scientific and research flights, recreation and tourism, flight training and vocational education, aerial fire-fighting, emergency medical flights, and disaster-related support for the city and county. The city will help manage and mitigate noise and other impacts of airport operations via land use controls and partnership with the State and fuel providers to offer unleaded fuel. The city is also forward-looking as aircraft electrification becomes reality. The city will continue to build relationships that allow the airport to be a valuable resource for a wider range of people in the Boulder community. The city will coordinate with the county to provide consistent regulations, where possible.” East Boulder Subcommunity Plan (2022) References to the Airport from the most recent plan are as follows: Description: “This is a general aviation airport that began operating in 1928. The airport serves business, private, recreational and emergency aviation services to the City of Boulder and

surrounding communities. The airport facilities include runways, underground fuel storage tanks, hangar space and tie-down space for aircraft. The City’s relationship with the Federal Aviation Administration (FAA) and the BMA includes periodic access to grant funding from the FAA and the Colorado Department of Transportation (CDOT) for capital funding or for the historic purchase of land at the airport. Contracts with the FAA and CDOT for capital funding requires a legal agreement to keep the airport open for the useful life of the improvements, designated as 20 years. If actions were taken by the City which denied the public access to the airport, then the contract requires that the City must repay the FAA or CDOT for the unused useful life of the funding on a pro-rata basis.” Policy M6: “Redevelopment in East Boulder will be done in accordance with the city’s Airport Influence Zone and FAA rules that guide safe and compatible development near an airport.” M16: “Project Explore updates to the Boulder Revised. Code to align the updated BVCP land use map with FAA requirements for the BMA. Code updates may include a revised airport influence zone and consideration of avigation easements for redevelopment in the subcommunity.” A6 Project: “Increase the amount of public art in East Boulder by considering city owned sites for future permanent and/or temporary artwork installation. Today, there are three public art installations in East Boulder. The city may consider the following city-owned locations as potential sites for future installations, using the percent for art allocation during capital improvements: 48th Street Vehicular Bridge over Goose Creek, Valmont City Park, BMA, the future Flatiron Greenway and the future Eastern City Campus.” B7 Project: “Create incubator space at city-owned sites. The city owns significant sites in East Boulder, including the municipal services center (site of the future Eastern City Campus) and the BMA. As these sites evolve in the future, the city should consider programming incubator space to offer local entrepreneurs’ affordable commercial space.” Transportation Master Plan Description: “The city will ensure the BMA continues to meet the needs of the community by providing a safe environment for aviation business and business-related travel, scientific and research flights, recreation and tourism, flight training and vocational education, aerial firefighting, emergency medical flights as well as flood and other disaster-related support.” Action Plan: “Airport: Update the Airport Master Plan and work with the public airport to broaden its value to the community and prepare for any Advanced Mobility opportunities that may utilize it for passenger or freight delivery.” Airport Master Plan -2007 The most recently adopted Airport Master Plan update identified many of the same core issues that remain relevant today, including long-term financial sustainability, community impacts of airport operations, and the need to and cost of maintaining aging infrastructure. Many of the plan’s recommendations have been implemented, but the longer term questions about land use and the airport’s ultimate role are issues that remain for consideration today. Due to limited

funding and current City policy on the question being considered under this agenda item we project not initiating the work of a new master plan until updated policy direction is received.

City Council History The item previously came before Council on the following dates:

January 12, 2023 – City Council Study Session August 24, 2023 – City Council Study Session February 1, 2024 - City Council Information Item Materials July 25, 2024 – City Council Meeting, Matters Item

Analysis Staff is seeking Council direction on the long-term future of the BMA in light of two primary drivers: (1) the legal outcome of recent litigation with the Federal Aviation Administration (FAA), and (2) the airport’s projected financial performance under different operating assumptions. Independent of long-term direction, the City has continued to advance operational and community-responsive improvements at the airport. These include: •

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Noise mitigation: Reestablishment of a technical noise committee, expanded regional coordination, and ongoing refinement of the Voluntary Noise Abatement Program (VNAP), including advocacy that resulted in adjusted regional flight patterns. Unleaded fuel transition: Implementation of an unleaded fuel strategy, including nearterm grant funding and potential long-term infrastructure investments contingent on operational certainty. See Attachment B for the full plan. Rules and regulations updates: Efforts to clarify and strengthen expectations for airport users and tenants. Targeted capital maintenance: Securing state grant funding to support critical airfield maintenance (e.g., seal coat), reducing local fiscal exposure while maintaining flexibility related to future federal obligations.

These efforts respond directly to themes raised in the community conversation and are not dependent on a specific long-term policy decision. However, because costs to maintain the airport are outpacing revenue to support it and with the legal decision now behind us, staff is requesting discussion and policy direction at this time. City staff have refined the July 2024 financial analysis presented to city council to focus on two primary scenarios: Scenario 1, representing commitment to indefinite operation as an airport, and Scenario 2, representing a commitment to maintaining potential flexibility of airport closure and land reuse post-2040. To isolate the fundamental financial difference between indefinite operation and potential closure, we have updated both scenarios based on current information and to enable clear comparison between their short- and long-term fiscal impacts.

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Scenario 1 (Indefinite Operation): The City commits to continued airport operations, enabling full participation in FAA and other grant programs. A revised version of this scenario (Scenario 1) assumes a constrained capital program and increased likelihood of external funding. Under these assumptions, the airport is projected to operate with minimal or no ongoing subsidy. Scenario 2 (Potential Closure / Reuse Post-2040): The City maintains the option to pursue airport closure and land reuse at the earliest potential point (~2040), foregoing most federal grant funding in the interim. Under this scenario, the City projects a cumulative subsidy of approximately $9 million through that period to maintain minimum safety and operational standards.

The refined analysis isolates the key variable between scenarios—access to federal funding— while planning for capital improvements in a way that is commensurate with the presumed availability of funding. Further highlights about the fiscal analyses of both scenarios are included below in the Anticipated Fiscal and Workplan Impacts section. Legal Context Recent litigation was dismissed on the basis that the case is not yet ripe; as in, the City has not yet experienced a present-day injury. Importantly, this outcome does not affirm the City’s ability to close or repurpose the airport at that time; rather, it defers that determination. FAA policy and precedent suggest that approval of airport closure is subject to significant federal discretion. Policy Trade-Off The decision before Council reflects a fundamental trade-off. Scenario 1 provides financial stability and full access to external funding but forecloses the option of future land reuse. In addition to the additional access to external funding, the increased stability and predictability of long-term operation increases confidence in potential existing and future tenants, providing an advantage to the long-term fiscal outlook. Scenario 2, on the other hand, preserves a potential pathway to reuse in approximately 15 years, while requiring ongoing local subsidy and accepting legal uncertainty. While the scenario 2 parameters likely require subsidy from other city funding sources and potential for further legal challenges and costs, if successful in our post-2040 effort to close the airport and reuse the land, the potential for opportunity and future land value is a potential benefit for consideration. Council is asked to provide direction on the City’s long-term approach to the BMA in light of the trade-offs outlined above. Specifically, does Council wish to pursue a path that commits to the indefinite operation of the airport, enabling access to federal funding and greater financial stability, or to continue preserving the potential—though uncertain—option to seek closure and land reuse no earlier than 2040, accepting the associated fiscal costs and legal ambiguity in the interim? This direction will guide near- and mid-term operational, financial, and strategic decisions related to the airport.

Anticipated Fiscal and Workplan Impacts Financial Analysis (2024 and Current)

A recently completed airport financial analysis, presented alongside the Airport Community Conversation in July 2024, provides important context on the long-term implications inherent between the two scenarios. The recent analysis highlighted tensions between the airport’s revenue model and projected operating and capital needs. While the airport generates revenue through leases and user activity, it faces increasing costs associated with maintenance, regulatory compliance, and eventual capital reinvestment that are exacerbated by the implications of scenario 2 in which the City wouldn't utilize federal grants that extend our grant assurances past 2040. FAA grant programs can significantly offset capital costs but if grant assurances extend past 2040 accepting such grants extends the time in which possible reuse could be considered. Conversely, declining to accept such funding preserves our options but shifts a greater share of financial responsibility to other City funding sources. Staff have updated these prior analyses with actuals from 2024 and 2025 as well as new capital project timelines and grant revenue assumptions. The 2024 analysis scenario 1 presumed only one federal discretionary grant in the time horizon until 2040, representing a conservative revenue analysis, while our updated analysis includes additional discretionary grant revenues that staff believe are realistic to expect. In addition to updated revenue projections, we have updated both scenarios with current information about our timeline for upcoming critical capital improvement-related maintenance projects. From these recent updates we highlight some highlevel differences between the scenarios, as follows. The updated Scenario 1 assumes access to reasonable discretionary and entitlement grants totaling approximately $26M between now and 2040, while scenario 2 assumes no availability of federal grant revenues. Regarding scenario 1, given recent unpredictability of federal grants, it’s important to highlight that while funding is not guaranteed, we believe it is realistic to expect in the future, for two primary reasons. One, because the Airport and Airways Trust program is user-funded it is therefore more likely to be self-sustaining than tax-revenue funded programs. And, two, the national political landscape has not signaled an expectation to pull support for aeronautical funding like they have for other initiatives. As noted, scenario 1 plans for a practical capital improvement plan which includes full reconstruction of pavement surfaces once across the next fourteen years, whereas scenario 2 only identifies preventative maintenance (seal coating) of those surfaces in that span of time. The difference in projected capital costs from scenario 1 ($28m) to scenario 2 ($12M) reflects those differences. It is important to highlight a trade-off risk under scenario 2, which is that, because the pavement reconstruction work is not accounted for in its capital plan between now and 2040, if the FAA or court ruling at that time requires indefinite airport operations thereafter, the City would face a significant expense in deferred maintenance equivalent to the future cost of reconstructed pavement, which would be over and above the projected $9M shortfall cited earlier. In addition to considerations of pavement maintenance that highlight differences between scenario 1 and 2, there are other non-maintenance considerations and risks to consider after 2040. At that time, if the City is permitted – through FAA concurrence or court ruling – to close the airport and reuse the land, we would need to develop a robust plan, including engaging outside technical expertise, to develop a refined estimate of costs associated with that reuse,

which would likely include brownfield environmental mitigation, professional real estate fees, and legal fees (if a lawsuit is required to achieve a court ruling over the current position of the FAA), among other costs. Predictions of those future costs can vary widely, but, for mitigation, for example, which would be necessary because our airport site would be considered a brownfield, we have compared other similar projects throughout the country to get a sense for the wide range of future costs. Based on preliminary research we would assume mitigation costs in the range of $10-30M on the low end, but if we discover, after more analysis and testing, that the extent of brownfield work is moderate or complicated, this range of costs could be as much as three to five times this amount, possibly over $100M. The potential land value counterbalances our expectation of costs to prepare the site for reuse, and to that end, staff have contracted with a local professional realtor to produce a Broker’s Opinion of Value which was not ready to share at the time of publishing of this memo but that we hope to share during our presentation. In addition to long-term fiscal impacts, the short-term snapshot also highlights some of the differences between scenario 1 and 2. Airport leadership identified a 2025 CDOT grant to help offset most of the necessary costs associated with a runway seal-coating project that would not compromise our assurances past 2040. These expenses could have been incurred in 2025 at full cost to the City which would have fully used all of the available airport reserves, but this grant enabled us to save $450M of local funds for a much-needed seal coat we expect to complete later this year. These savings are applicable in either scenario, because we have been operating conservatively since 2020 in not pursuing federal grants that could extend our assurances past 2040. However, in 2027 we plan to sealcoat the remaining paved surfaces of the facility at a cost of almost $750k. The availability of federal grants under Scenario 1 versus Scenario 2 makes all the difference in 2027 as we project to go into the negative then under Scenario 2 but not Scenario 1. From an even more short-term view, there are fiscal implications to the timing of the current year because of the availability of soon-to-expire entitlement grants, many of them still available from the 2020/21 pandemic. A summary of immediately available COVID era grants that have been awarded and some of which expire as soon as 09/2026 have been listed below. This summary is intended only to show the current time-sensitivity of a policy decision and as such does not include any potential future discretionary grant applications/awards. Policy direction to pursue indefinite operation of the airport would allow the City to utilize about $900k for eligible reimbursements and expenses. The below table represents general availability of grants that have not been pursued so as not to eliminate the possibility of scenario 2. Grant Name

Amount

Expiration Date

AIG 2022

$159,000

09/2025 (expired)

AIG 2023

$145,000

09/2026

AIG 2024

$144,000

09/2027

AIG 2025

$137,000

09/2028

AIG 2026

$137,000

09/2029

CARES 2020

$30,000

09/2024 (expired)

CRSSA 2021

$13,000

09/2025 (expired)

AARPA 2022

$32,000

09/2026

CDOT BDU (BMA)-23-01

$146,667

(reprogrammed)

CDOT BDU (BMA)-24-01

$333,334

(reprogrammed)

NP2024 (entitlement)

$14,925

09/2027

NP2025 (entitlement)

$150,000

09/2028

NP2026 (entitlement)

$150,000

09/2029

Total Expired/reprogrammed

$682,001

Total Available

$909,925

As noted above, considering both operating and capital expenses, the airport’s short-to-longterm fiscal impacts to the City are contingent on policy direction. There are short-term fiscal opportunities still available that will expire soon if we continue under a scenario 2 situation. And looking into the next few years, based on the policy decision, we can foresee our fund going into the negative under scenario 2. Long-term, under the as-described Scenario 1, staff believe the airport can be operated with a negligible or zero average annual deficit, and with increased confidence, there are opportunities to operate with a balanced budget and possibly even restore airport reserves. Under the as-described Scenario 2, staff believe the ongoing costs to maintain without availability of federal grants that extend our grant assurances past 2040, will require a cumulative subsidy of about $9 million, varying up and down each year, with more costs to consider at the time of potential closure.

Equity Analysis The following summary of our equity analysis applies to the work completed during the recent Airport Community Conversation. The communities surrounding the airport score a 5 on the Equity Index, the highest priority on the City of Boulder Equity Index. Accordingly, the following engagement (and other strategies) were used in the Airport Community Conversation to mitigate unintended consequences for people of color, specifically the communities surrounding the airport, including San Lazaro and Vista Village manufactured home communities within which live a large number of multilingual and Spanish-speaking families. The Community Conversation process was deliberately thorough related to equity, including, but not necessarily limited to, Community Working Group (Spanish and English language) meetings, paid or compensated participation for community connectors, open house events, targeted outreach to communities proximate to the airport, and public materials in Spanish.

Climate, Resilience, and Sustainability Considerations Common environmental concerns heard both during the Community Conversation and in an ongoing way through various public feedback platforms include those from persistent noise as well as low lead aviation fuels. Independent of the discussion item at hand, airport staff and leadership, as noted earlier in the Analysis section, are working on both issues through better reporting systems and funding for unleaded subsidies and infrastructure. BMA has implemented a voluntary noise abatement plan (VNAP) which intends both to overcome the challenges of communicating to transitory participants of flight schools as well as create a clear communications loop from community feedback to pilots, whom the City of Boulder is prohibited from regulating on this issue. Our VNAP and other efforts to mitigate noise issues include quarterly local technical noise committee meetings, advocacy at other area airport VNAP meetings such as one that Rocky Mountain Metropolitan Airport hosts, and referencing VNAP in leasing documents and other communications with BMA users. The other common concern communicated by nearby residents pertains to the prevalence of lead from aviation fuels for piston powered aircraft. In contrast to the automotive industry, shifts to unleaded fuels has been slow due to aeronautical performance and safety requirements. In recent years there have been breakthroughs in the development of unleaded alternatives and for that matter, City Council recently approved a request to accept a grant for incentivizing wider adoption of unleaded fuels. Additionally BMA finalized its unleaded transition plan as of January 2026 which includes a goal of eliminating leaded fuel use by 2030. In addition to the unleaded fuel subsidy grant, our airport Capital Improvement Plan includes funding to permanently replace fueling infrastructure to support long term needs. It is worth noting in light of the decision and discussion that our plan includes the transition to permanent unleaded fuel infrastructure regardless of the policy decision of scenario 1 or 2, but that in scenario 1, grants would be available for which BMA would be eligible that would significantly reduce local costs by several million dollars.

Community Engagement Airport Community Conversation (2023) In 2023 the City of Boulder launched the Airport Community Conversation to better understand community aspirations for the future of the BMA. The process was intentionally designed as a broad, multi-format engagement effort that included open houses, online questionnaires, stakeholder interviews, and a Community Working Group (CWG), alongside targeted outreach to directly impacted and historically underrepresented populations. The engagement revealed a wide range of perspectives with no clear consensus. Some participants emphasized the airport’s value as a community asset—supporting business activity, emergency response, and aviation services—while others raised significant concerns related to aircraft noise, the continued use of leaded fuel, and the opportunity cost of maintaining approximately 140 acres of land in a high-demand housing market. Through the conversation, the City summarized a spectrum of four future scenarios, which generally fell into the two categories that align closely with the scenarios presented earlier in this

document. Aligning with Scenario 1 were a spectrum of considerations that proposed maintaining the airport as an operating facility, with variations that included maintaining current conditions, enhancing aviation uses, or introducing complementary community-serving elements. Aligning with Scenario 2 were a spectrum of considerations pertaining to retaining flexibility for possible decommissioning and repurposing of the site. As noted there was no consensus developed as each scenario revealed meaningful trade-offs as well as potential benefits and no one scenario fully resolved all of the community priorities. Additional information and resources are compiled at the linked project page shared in the title Airport Community Conversation, above. Input from the communities identified in the Equity Analysis section ranged from concerns about noise from aircraft, air pollution, leaded aviation gasoline, and concerns about impacts of traffic and noise if the airport were to be reused for development of affordable housing. Community ideas/requests by San Lazaro and Vista Village included increased community involvement in airport activities, better communication between the community and airport pilots and tenants, and air quality and soil testing for lead. Additionally, we heard requests for covered picnic areas with views of planes, aviation acrobatic shows, a place for community art to be displayed at the airport, teen programming at the airport, and the possibility of an onairport café/coffee shop. Also, through this process of engagement, issues we consistently hear were further reinforced, such as a desire to see more unleaded fuel usage, deployment of electrified airplanes and infrastructure, and real-time information about flights/airport activities. Initiatives to make facility improvements and enhance public programming, such as many of the above ideas heard during the process are more challenging to implement fiscally in scenario 2 as opposed to scenario 1. Complementing this effort, an online questionnaire generated approximately 961 responses through broad outreach channels. Results reflected mixed views: about 50% of respondents indicated that some or major improvements are needed at the airport, 23% indicated no changes are needed, and 16% expressed a preference to cease operations. These results, consistent with other engagement efforts, reflect a wide range of perspectives and underscore the need to weigh competing priorities and trade-offs.

Next Steps for City Council There are no planned subsequent agenda items related to this topic at this time, as our next steps are dependent on policy direction from the Council.

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Attachments Attachment A CDOT 2025 Economic Impact Study Attachment B Aviation Unleaded Fuel Transition Plan Attachment C Court Ruling