Matters Memo

City of Boulder City Council Agenda Item Meeting Date: July 23, 2026 Agenda Title Consideration of a motion to approve the continued operation of the airport in accordance with Boulder Revised Code 1981 sections 11-4 Airport.

Staff Contact • • •

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

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to approve the continued operation of the airport in accordance with Boulder Revised Code 1981 sections 11-4 Airport.

Executive Summary The purpose of this item is for City Council to conduct a public hearing and make a formal determination on the future of the Boulder Municipal Airport. City Council met on this agenda item in April 2026 during a study session and followed up on May 28, 2026, during a special meeting to establish process expectations for how to establish policy direction. At the May meeting, and through receipt of several airport related hotlines since April, city council requested additional scenarios and analysis of operating the airport under

comparable CIP and funding levels. These scenarios will be reviewed in the analysis section.

Council Action Options Option

Outcome

Approve motion language as drafted

If the motion is approved, staff will plan for the indefinite operations and maintenance of the Boulder Municipal Airport and will seek funds from a variety of sources including FAA grants and entitlement funds.

Define and adopt a modified motion

Council would need to define any modifications or amendments to the draft motion language.

Deny the motion or take no action

If this motion is denied, staff will need to prioritize minimum actions required to meet existing grant assurances and will look first to the Transportation Fund as the main source of funding while also seeing our pertinent alternative sources of funds. Alternate funds, such as CDOT grants, are likely limited in scope.

Refer back to staff

If council refers this item back to staff, the city will need to forgo the FAA’s FY23 AIG of $145K expiring in 09/2026.

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 Details on the how this item aligns with the Citywide Strategic Plan can be found in the April 23, 2026 – City Council Study Session, under the airport discussion item.

Alignment with Additional City Plans Details on the how this item aligns with additional City plans can be found in the April 23, 2026 – City Council Study Session, under the airport discussion item.

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 July 25, 2024 – City Council Meeting, Matters Item April 23, 2026 – City Council Study Session May 28, 2026 – City Council Special Meeting

Analysis During the May 2026 Council discussion, Council requested additional financial scenario analysis to better understand the fiscal implications of alternative airport policy directions. This section summarizes that work; detailed analyses are provided in the accompanying attachments. The scenarios evaluated by staff are summarized below.

Scenario

Indefinite Airport Operation

FAA Funding

CDOT Funding

Scenario 1

Yes

Scenario 2

No – Preserve Future Option Yes

Yes None

Yes None

Yes None None

Yes None eligible Maximum Assumed

Scenario 3A

Scenario 3B1 Yes Scenario 3B2 Yes

The financial scenarios originally presented to Council in July 2024 were developed by Kimley-Horn as part of the Airport Community Conversation. Those scenarios compared continued airport operation with maintaining the option for potential closure after approximately 2040. However, the scenarios also incorporated different assumptions regarding capital investment and discretionary FAA grant funding, making direct comparison of the fiscal impacts more difficult. Specifically, the 2024 operating scenario assumed implementation of the full Capital Improvement Plan together with a

conservative projection of discretionary FAA grant funding, while the closure-option scenario assumed a reduced capital program and no grant funding. Both scenarios projected funding shortfalls requiring support from other City funding sources. For the April 2026 Council discussion, staff refined these scenarios to better isolate the fiscal effects of federal grant participation. Non-critical capital projects were deferred in both scenarios through approximately 2040 while maintaining the fundamental policy distinction between accepting FAA grants and preserving the option to seek airport closure in the future. These refinements were intended to create a more direct comparison of the financial implications associated with continued eligibility for FAA funding. One important distinction regarding Scenario 2, as presented to Council in April 2026, is that the Capital Improvement Plan intentionally differed from Scenario 1. Because Scenario 2 assumed the City would preserve the option to seek airport closure in 2040 and would not have access to FAA grants, staff assumed a more limited capital program focused on maintaining minimum safety and operational requirements. This reflected a higher tolerance for deferring capital pavement investments over the remaining anticipated operating life of the airport in an effort to reduce reliance on other City funding sources. During the May discussion, Council requested we use consistent capital improvement plans across scenarios. The revised scenarios presented in this memorandum respond to that request, allowing the fiscal impacts of different grant funding assumptions to be compared more directly. With Council’s requested additional analysis evaluating indefinite airport operation without reliance on FAA grants, staff have developed three additional scenarios. Scenario 3A assumes indefinite airport operation while accepting both FAA funding and eligible CDOT funding. Scenario 3B evaluates indefinite airport operation without FAA funding and is presented as a range of possible outcomes based on the uncertainty associated with future CDOT participation. The minimum of the range, Scenario 3B1, assumes zero financial support from CDOT, because of the statutorily prohibited funding for activities that are eligible for FAA assistance. Scenario 3B2 illustrates the opposite end of the range, full participation comparable to what we would hope from the FAA in Scenario 3A, which we can be hopeful for, but not guarantee, given the above-related Colorado Revised Statute restrictions, because CDOT does have some discretion in how they view safety-critical maintenance activities. Staff does not presume either outcome will occur; rather, these scenarios are intended to bracket a reasonable range of possibilities and illustrate how varying levels of state participation could affect the airport's long-term financial outlook. Several important caveats apply to all of these scenarios. The original 2024 financial analysis was prepared by Kimley-Horn. To conserve City resources, staff did not retain

consultants to develop the additional scenarios requested by Council. Instead, staff modified the original consultant model using updated assumptions corresponding to the policy alternatives under consideration. While this approach builds directly on the consultant's work, it does not constitute a new independent consultant analysis, and, as such, we acknowledge may include some gaps or imperfect assumptions. Like any long-range financial forecast, these scenarios rely on assumptions regarding future revenues, costs, capital needs, grant availability, inflation, and other factors that cannot be known with certainty. They should therefore be viewed as planning tools rather than predictions, similar to other CIP projects the city embarks on. Their primary purpose is to illustrate the relative fiscal implications of the policy choices before Council, particularly the differences associated with maintaining eligibility for FAA funding, relying on varying levels of potential CDOT participation, or foregoing federal grants to preserve the possibility of future airport closure and land reuse.

Additional questions Council has also posed two additional questions to staff. First, whether the FAA grants that purport to bind the city to perpetual airport operations are required to come to council for approval. It is a question of first impression as generally grant agreements are contractual in nature and thus usually within the city manager’s authority. The city attorney's office has provided council with a confidential memorandum discussing this issue more thoroughly. Without revealing confidential communications, if council wishes to approve grants from the FAA purporting to bind the city in perpetuity, staff would seek such direction from council to draft an ordinance requiring such approved in Boulder Revised Code Title 11 Section 4. Second, separate from the financial analysis provided above, council has asked for clarity on what sources of funds the city would look towards were it not to have sufficient grant or other alternate funding. Certain streams of revenue in the Transportation Fund could be potentially used as an alternative source of funding for the airport. As council is aware, the Transportation Fund is comprised of five different revenue sources: two separate sales and use taxes under B.R.C. 3-2-5(c)(4) (dedicating .15% of the city’s 3.65% of sales and use tax to transportation) and B.R.C. 3-18-1(a)(2) (providing that 0.6% of the sales and use tax attributable to the levy and collection of one cent of sales and use tax be earmarked towards transportation projects generally). and three intergovernmental revenue sources (the Highway User Tax Fund, the FASTER/County Roads and Bridges revenue fund, and revenue stemming from vehicle registration fees which is administered by the county). Staff would not seek to use revenue stemming from the intergovernmental revenue sources as generally speaking, they are intended to

be used for very specific purposes that would not include airport services, maintenance or projects. Conversely, in review of the legislative history, the two dedicated transportation sales tax items are broader in nature and allow for uses that are related to transportation generally, without specific limitations to only road transportation usage. Thus, staff would explore using these revenue streams as an alternative source of funding for the airport. General Fund dollars would be looked at as a last resort to avoid negative impacts to other programs and services funded solely by these unrestricted monies. Staff will, of course, continue to look for alternate funding sources such as revenue generation efforts and grant opportunities from a variety of entities. For clarity, staff believe there are limitations in such efforts as they heard uncertainty in the future of the airport has impacted hanger leases, for example. Additionally, grant dollars from entities like CDOT are not assured and, as we have recently heard, will not cover major aviation related projects.

Anticipated Fiscal and Workplan Impacts Fiscal Note Estimated Fiscal Impact Narrative In the memo and presentation, we have consolidated and simplified information to describe the critical and summary-level information that will help distinguish the scenarios and help frame the policy decision(s). We also are including more detailed projections in ledger form for those who have requested more detail in the assumptions and other underlying information in each of the scenarios we have developed. For detailed financial analyses on each scenario, please see Attachment A – Financial Analysis. Summary information of the fiscal impacts is provided here in summary table form followed by further high-level descriptions below.

Scenario 1 (2024) and 2 (2024) are unchanged from when they were presented in 2024. As noted earlier, the table reflects both scenarios showing a funding shortfall because of different reasons. Scenario 1 projected federal grants conservatively, including entitlement grants at $150K annually and only one discretionary. Thus, despite availability of federal grants in Scenario 1, that scenario still showed a funding shortfall due to capital expenses not being fully offset by the potential availability of federal discretionary grants. Scenario 2 also showed a funding shortfall because of the lack of federal funding altogether but also a more conservative lease revenue projection given uncertainty of long-term airport operation. Scenario 1 (2026) and 2 (2026) were developed to intentionally isolate the federal funding variable such that, for Scenario 1, reasonable pavement surface and, thus, safety-related discretionary grants were assumed to be awarded in the funding projection which offset the projected capital costs. Because of the predicted availability of discretionary grants, our grant revenue over the 14 year time horizon for Scenario 1 shows a fiscal surplus. Predictions about future lease revenues as a result of new development were unchanged for Scenario 1 (2026) and 2 (2026) from the 2024 analysis. Scenario 3 was developed from Council’s requests for indefinite airport operation while utilizing either FAA or only CDOT grants. 3a utilizes FAA grants which is the least costly to the City because with FAA grants, CDOT typically also supports at 5% of project cost to lower the local cost to 5%. Because the availability of CDOT grants is unknown given the statutory prohibition to fund projects that are eligible for FAA funding, we show two

scenarios which define a low and high end of the possible CDOT funding. 3b1 assumes all of our grant opportunities are eligible for FAA funding and therefore would be prohibited to be supported by CDOT and 3b2 assumes CDOT has discretion for all of our grant opportunities. Before the public hearing, staff will be consulting with CDOT Aeronautical division on our presumptions for CDOT grant revenue projections to ensure we are coordinated on how we are accounting for those future unknowns. Until this consultation we consider this memo to be a draft and subject to change. One correction from previous presentations is that staff realized that previous scenarios 1 and 2 (both from 2024 and 2026) assumed that land west of Hayden Lake could be developed for land lease revenue, but we now know that land is Open Space and Mountain Parks purchased. We have removed the possibility of future development from the more recently developed scenarios Current Year Estimated Fiscal Impact Fund(s): Airport Fund Department(s): Transportation & Mobility Program(s): Airport, Capital Improvement Program Item

FY 2026 Budget

Beginning Fund Balance

$0.34M

Total Forecasted Revenue

$0.88M

$0.0M

$0.88M

Total Estimated Expenses

$1.35M

$0.0M

$1.35M

Ending Fund Balance(s) After Reserves

-$0.32M

-$0.32M

FTE

4.0 FTE

4.0 FTE

Three-Year Estimated Fiscal Impact *

FY 2026 FY 2026 Estimated Impact Net Change $0.34M

Item

FY 2026

FY 2027

FY 2028

Total Forecasted Revenue

$0.0M

$1.02M - $3.16M

$1.10M - $4.22M

Total Estimated Expenses

$0.0M

$2.16M - $2.95M

$4.04M - $4.10M

Net Estimated Impact

$0.0M

-$1.93M - $0.21M

-$3.0M - $0.18M

*The above Three-Year Estimated Fiscal Impact table represents the range of scenarios that are represented in the Financial Scenarios Analysis (Attachment A) for City Council Consideration.

Equity Analysis Details on the equity analysis leading up to and during the Airport Community Conversation can be found in the January 12, 2023 – City Council Study Session and August 24, 2023 – City Council Study Session.

Climate, Resilience, and Sustainability Considerations Details on the climate, resilience and sustainability considerations can be found in the April 23, 2026 – City Council Study Session, Matters Item, under the airport discussion item.

Community Engagement Details on the Airport Community Conversation can be found in the August 24, 2023 – City Council Study Session.

Next Steps for City Council Consideration of a motion to approve the continued operation of the airport in accordance with Boulder Revised Code 1981 sections 11-4 Airport.

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Attachments Attachment A – Financial Analysis