Matters Memo

City of Boulder City Council Agenda Item Meeting Date: May 14, 2026

Agenda Title Ballot Measures Study Session

Staff Contact • • • • •

Scott Carpenter, Principal Budget Analyst, Finance Charlotte Huskey, Budget Officer, Finance Krista Morrison, Chief Financial Officer, Finance Michele Crane, Deputy Director, Facilities and Fleet Joanna Crean, Director, Facilities and Fleet

Executive Summary The purpose of this item is to provide City Council with information and recommendations for November 2026 tax ballot measures, including: 1. Review the list of potential 2026 tax ballot measures and staff recommendations on items to proceed to polling. This includes scenarios and an approach to address the priority building infrastructure needs demonstrating how projects may be accomplished over time utilizing existing funding and potential funds raised by proposed ballot measures. 2. City Council Charter Committee recommendations for matters to be brought forth this election cycle. 3. Provide an update on city petitions that are circulating for signature. 4. Report on potential ballot items for the state and region.

Tax Ballot Measures At its March 12, 2026 study session council reviewed a spectrum of ballot measure options and prioritized four potential tax ballot measures to explore further: 1. Parks and Public Improvement Mill Levy (1.352 mills) or Expansion Only 2. Second Homes (Residential Vacancy) Excise Tax 3. General Fund Debt Authorization (No tax increase) 4. “Public Realm” Sales Tax (consolidation of existing dedicated funds) At its April 9, 2026 study session, council reviewed the significant facility funding needs of the city, including recreation centers, and prioritized seeking solutions for a mix of facilities to address the most critical 15 buildings in the portfolio, including recreation centers, and to prioritize a short-term funding strategy for underfunded critical maintenance just to keep facilities operational. Based on those two study sessions and additional analysis, staff is recommending to council a multi-pronged approach to a 2026 ballot measure strategy to address these critical capital and operating needs, and conducting statistically valid polling to inform a future decision on potential ballot items: 1. Exploring an increase to the current permanent parks & recreation property tax mill levy from .90 mills to 2.252 mills (increase of 1.352 mills) to become the Parks & Public Improvements Fund and expanding the use of those funds to support park, recreation, public safety and general operations and maintenance. 2. Exploring up to a $200 million general obligation bond issuance, funded through a 20-year temporary property tax increase that will expire when the bond retires, to help fund key facility renovation and replacement projects, such as recreation centers and/or public safety facilities. 3. Exploring an amendment to Charter Sec. 97 to change the city’s debt limit from 3% of assessed valuation of the taxable property within the city to 3% of the actual value of the taxable property in the city, which will permit higher dollar range capital improvement projects. On March 12 council expressed interest in further exploring a second homes (Residential Vacancy) Excise Tax. This would create an excise tax on vacant residential property. Properties are deemed to be vacant if they are not inhabited for 183 days during the year, consecutively or non-consecutively. The intent of this tax is to incentivize property owners to sell, rent, or improve their vacant residential properties. As proposed, the revenue from this tax would be used for general purposes. Staff is seeking direction from council on this potential tax, and if it should be included in the 2026 polling efforts.

Charter Committee Items The charter committee is recommending two potential charter changes: 1. Sec. 130 regarding boards and commissions, similar to the change that was on the 2024 ballot that narrowly failed. Charter committee members are interested in polling tis change, especially if it is described as allowing flexibility on terms and criteria changes and does not include any changes to the removal language. This would advance the recommendations of the Boards and Commissions Assessment. 2. Sec. 167 regarding purposes of open space land to explicitly recognize wildfire resilience. Staff has shared that there currently nothing in the charter that is limiting wildfire resilience activities on open space. The committee believes this would be a good way to signal to the community the importance of wildfire mitigation. Next Steps Following directions from this study session, staff will conduct polling to gauge voter support for potential ballot measures and various facilities and services. In late June based on final direction from council, staff will draft any ballot measures desired for council consideration. The following is the timeline outlined by staff for the 2026 potential ballot measures: • • • • • • •

Council reviewed the potential spectrum of ballot measures on March 12, 2026. Council reviewed the Facilities Funding Strategy on April 9, 2026. Council consideration of potential 2026 ballot measures on May 14, 2026. Ballot measure polling conducted late May-Mid-June, 2026 Council review of the tax ballot polling results on June 25, 2026. First reading of proposed ballot measures is scheduled for July 23, 2026. Second reading and public hearing on August 6, 2026.

•

If needed there is a continued second/third reading on August 20, 2026. The last regular council meeting date that council may approve ballot measures is August 27, 2026.

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Ballot measures must be certified to Boulder County by September 4, 2026.

Questions for Council 1. Does council agree with staff’s recommendation to explore through further analysis and polling: • Parks and Public Improvement mill levy expansion and increase to provide flexibility to community needs? • Up to $200M debt and associated mill levy increase for unfunded priority facility improvements? 2. Does council wish to proceed on further analysis and polling a vacancy excise tax? If yes, does council have direction on the scope? 3. Does council agree with the charter committee recommendations on potential 2026 ballot measures? 4. Does council wish to direct staff to research further or prepare any additional ballot measures?

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area Responsibly Governed. These ballot measure options can help to directly or indirectly support all seven SER goal areas by increasing revenues and/or increasing revenue flexibility. Citywide Strategic Plan Strategy 12: Implement organizational and financial best practices to continuously improve asset management, customer experience, and project and program performance. These ballot measure options can also help to directly or indirectly support all the other citywide strategic priorities as the guiding principles of the LTFS aim to increase funding flexibility, reliability, and sufficiency allowing the city to fully fund its strategic priorities, community priorities, core services, and the city’s existing assets. Staff Notes This item is part of the city’s LTFS, focused on the development of a comprehensive strategy to help guide fiscal decision-making and long-term financial health of the city. As part of the LTFS and with policy guidance from the Financial Strategy Committee and full City Council, staff were directed to develop a Multi-Year Ballot Measure

Strategy and framework. These options are an outcome of the LTFS Multi-Year Ballot Measure Strategy framework, City Council policy guidance, and the guiding principles of the LTFS to ensure funding reliability and sufficiency for the city’s existing assets, core unfunded needs, and future services and programs.

Alignment with Additional City Plans Long-Term Financial Strategy The LTFS is guided by three main principles: • Fiscal Sustainability and Sufficiency: Funding core services at stable and predictable service levels. With revenue that is diverse, flexible and sufficient to meet needs and community priorities. • Equity: Advancing equity by creating revenue structures and financial policies that reduce tax and fee burdens on historically disadvantaged groups. • Resiliency: Increasing resilience allowing the city to anticipate, adapt, and recover quickly from adversity and change, supported by the diversification of revenues and maintaining sufficient reserve levels. Outlined below, the spectrum of ballot measures are each aligned with at least one of the guiding principles of the LTFS. The LTFS builds upon prior policy guidance from the Blue-Ribbon Commission (2008 and 2010 reports) the 2019 Budgeting for Community Resilience Report, and lessons learned from the pandemic. These reports emphasized the need for a comprehensive financial plan, cautioned against the overreliance on sales tax and dedication of funding, and encouraged the development of an outcome-based budgeting system. Given the city’s financial constraints with flattening and declining major revenue sources, backlog of unfunded capital and operating needs, and continued uncertainty of federal funding, the LTFS represents a critical initiative to continue to guide the city toward a more sustainable, sufficient, and predictable financial landscape – one that balances key citywide needs and community priorities. In 2025, staff completed the first phase of the LTFS, advancing efforts to diversify and stabilize city revenues and prepare for community trade-off conversations on service levels. Key accomplishments include: 1. Long-Term Financial Plan a. Established LTFS guiding principles of Fiscal Sustainability and Sufficiency, Equity, and Resiliency. b. Performed a current state assessment against the recommendations within the Blue Ribbon Commission Reports.

2. Alternative Funding Mechanisms a. Developed the city’s first Comprehensive Fee Inventory b. Implemented new or expanded alternative funding mechanisms in the 2026 Budget, including the Transportation Maintenance Fee, the singlefamily housing impact fee, speed-on-green photo enforcement revenue, and parking fees. 3. Core Service Levels a. Developed a comprehensive, standardized list of city services and associated service levels to support trade-off discussions of levels of city services through Fund Our Future community conversations in March-April 2026. 4. Multi-Year Ballot Measure Strategy a. Developed a multi-year ballot measure framework for 2025 and 2026 tax ballot measures, focused on unmet needs and additional investments supporting key community priorities. b. Successfully passed the permanent extension of the 0.3% Community, Culture, Resilience, and Safety Tax (CCRS) (72% approval) and associated debt authority (65%). In 2026, the LTFS will focus on: • Developing a five-year comprehensive financial plan. • Prioritizing and evaluating alternative revenue opportunities. • Conducting Fund Our Future community discussions on core service level tradeoffs. • Developing potential 2026 tax ballot measures within the broader multi-year ballot strategy.

City Council History During the City Council meeting on April 3, 2025, staff presented a process overview and update on the LTFS. During this meeting, as mentioned above, staff received feedback from City Council on the Multi-Year Ballot Measure Strategy to consider exploring two tax ballot measures for 2025 and the approach for 2026 ballot measures. Additionally, staff received feedback and guidance on the proposed Fund Our Future community engagement strategy for 2026. City Council provided guidance to staff informing the city’s Multi-Year Ballot Measure Strategy during the May 8 Study Session on 2025 Ballot Measures. Staff received feedback to explore possible ballot measures that prioritize general purpose funding, revenue flexibility, and stability. Potential ballot measures would also focus on reducing tax burdens for historically disadvantaged groups while continuing to invest in taking

care of what we have. Staff were also directed to pursue an expanded, comprehensive approach that contemplates the interaction between the city, county, and state. During the June 26 Council Meeting, staff presented the results of the statistically valid polling survey on the two tax ballot items that were under council consideration: 1. An extension of the existing 0.30% CCRS Sales & Use Tax from 2036 to 2050 or permanently to continue to support city infrastructure and maintenance projects, as well as nonprofit capacity building and capital investments. 2. The creation of a Public Realm (Parks & Public Improvement) Property Tax, which would increase the existing Permanent Parks property tax from 0.900 mills to 2.252 mills and expand the use of the tax, allow debt issuance, to infrastructure and capital maintenance projects more broadly in the public realm, such as parks, open space, civic buildings and areas, and the public right-of-way such as streets, sidewalks, bike lanes, and multi-use paths. Based on the results of the polling survey, council placed two measures on the November 2025 ballot, one to permanently extend the city’s existing 0.3% CCRS Sales & Use Tax, and another to increase debt authorization for the CCRS Fund up to $262 million. Both measures were approved by voters with the CCRS extension receiving 72.38% in support and the CCRS debt authorization receiving 64.83% in support. During the City Council meeting on March 12, 2026, staff presented a spectrum of potential ballot measures for City Council consideration for 2026 to advance the city’s fiscal sustainability and financial health, increase equity, and ensure resilience. Transformational Changes: Significant changes that adjust the city’s tax base to support revenue sufficiency or changes that reduce the city’s overreliance on sales tax. 1. Sales Tax on Services. 2. Increase Property Tax, Decrease Sales Tax. Mid-Range Incremental Changes: Changes which increase taxes for specific purposes or expand on the usage of existing taxes within dedicated funds. 3. Property Tax Mill Levy Increase (1.352 mills). 4. Parks and Public Improvement Mill Levy (1.352 mills) or Expansion Only. 5. Second Homes (Residential Vacancy) Excise Tax. Structural Changes: Changes that do not increase taxes but provide the city with more flexibility and increase ongoing potential revenue diversity. 6. General Fund Debt Authorization (No tax increase). 7. Increase Property Tax Cap (15 mills). 8. “Public Realm” Sales Tax (consolidation of existing dedicated funds).

City Council narrowed the 2026 ballot measures for further consideration at the May 14, 2026, Study Session: Parks and Public Improvement Mill Levy (1.352 mills) or Expansion Only Second Homes (Residential Vacancy) Excise Tax General Fund Debt Authorization (No tax increase) “Public Realm” Sales Tax (consolidation of existing dedicated funds) During the April 9, 2026 Council Study Session, staff presented the state of buildings across the city’s portfolio of over 75 buildings and shared a high-level overview of the draft Facilities Investment Strategy with a focus on the priority buildings category. Staff presented in the priority buildings category 15 buildings of most concern because they are failing and they are vital to our community to support emergency response, community safety and provide core community services. The city’s three recreation centers fall into this category in addition to the Public Safety Building, Fire Stations, West Age Well, and several core maintenance buildings.

Analysis City Council first indicated support for a Multi-Year Ballot Measure Strategy on May 9, 2024. The strategy included identifying tax ballot measures in 2025 and 2026 for council consideration that uplift the LTFS guiding principles of Fiscal Sustainability and Sufficiency, Equity, and Resiliency. By uplifting these guiding principles, the city aims to heighten revenue sufficiency and stability, reduce tax burdens on historically disadvantaged communities, and increase diversification of revenues. Key focus areas of the two-year ballot measure framework include: • For 2025, the framework established a more narrowed, incremental approach to potential tax ballot measures to focus on taking care of what we have, including investing in existing assets, addressing the backlog of capital infrastructure renovation, replacement, and maintenance projects, and funding opportunities for core services such as: transportation infrastructure development, replacement of parks assets, and renovations of city facilities. • In 2026, the framework identifies an expanded, more comprehensive approach to potential tax ballot measure options, seeking both to focus on the city’s unmet needs – continuing to support taking care of what we have – in addition to community priorities of city programs and services.

Section 1. Review the list of potential 2026 ballot measures. Review how each measure aligns with the SER framework, interacts with the broader organizational finances and Long-Term Financial Strategy. To support this framework and prior policy guidance, staff presented a range of potential ballot measures for 2026 that provide a spectrum of options ranging from larger transformational changes that seek to provide enhanced revenue sufficiency and stability and reduce the city’s overreliance on sales and use tax, structural changes that do not increase taxes but provide the city more flexibility and revenue diversity, and smaller incremental changes that increase taxes for specific purposes or expand the usage of existing taxes within dedicated funds. These options are also summarized in the table included in Attachment A.

Given economic conditions and early-stage community engagement on Fund our Future, staff recommended focusing 2026 tax ballot item analysis on mid-range incremental and structural options, while keeping transformational changes in the broader LTFS strategy for future consideration. City Council narrowed the potential ballot measures for 2026 to the below for continued consideration. Mid-Range Incremental Changes: Changes which increase taxes for specific purposes or expand on the usage of existing taxes within dedicated funds. 1. “Parks and Public Improvements” Mill Levy (1.352 mills) or Expansion Only This option increases the city’s property tax mill levy to the maximum allowable 13 mills, increasing the Permanent Parks and Recreation Fund mill levy from 0.9 mills

to 2.252 and could expand the usage of the fund to support funding for capital infrastructure, renovation, replacement, and maintenance projects and/or operations. This option does not prevent the city from using these funds for the needs already being addressed by the Permanent Parks and Recreation Fund. This option is for (a) a tax increase and expansion of the dedicated use, or (b) an expansion of the dedicated use only. Fiscal Sustainability & Sufficiency: By increasing the city’s mill levy, revenues would be increased to more sufficient levels for existing assets and future capital projects. It also gives the city increased flexibility by also expanding the usage of currently restricted dedicated revenues within the Permanent Parks and Recreation Fund. Those revenues can currently only be used for the acquisition of park land or permanent improvements to parks and recreation facilities. Equity: As noted under option two, property taxes are less regressive than sales & use taxes. This option could also be implemented without increasing taxes. Resiliency: By diversifying revenues through an increase to property taxes or by increasing the flexibility of existing revenues, the city is better suited to react and adapt to challenges. Fiscal & Workplan Impacts: As shown in Attachment B, increasing the mill levy by 1.352 mills would generate approximately $7.0 million per year from 2027 through 2031. For a $1.0 million residential property, an increase of 1.352 mills would result in a $85.50 property tax increase. For a $1.0 million commercial property, an increase of 1.352 mills would result in a $338.00 property tax increase. Additional Considerations: Property tax increases can be harder to pass. There are increased risks with this revenue source due to uncertainty of legislative changes at the state level, which have been experienced in recent years. Staff Recommendation: Consider further and move forward to polling. 2. Second Homes (Residential Vacancy) Excise Tax This option creates an excise tax on vacant residential property. Properties are deemed to be vacant if they are not inhabited for 183 days during the year, consecutively or non-consecutively. The intent of this tax is to incentivize

property owners to sell, rent, or improve their vacant residential properties. As proposed, the revenue from this tax would be used for general purposes. Fiscal Sustainability & Sufficiency: The creation of a new tax diversifies the city’s revenues, providing additional funding for core services. By making this tax undedicated for general purposes, it provides the city with flexibility of funding. Equity: A vacancy excise tax on residential property is more likely to target higher income populations that can afford to own multiple homes and can afford to leave those homes vacant for extended periods of time. Resiliency: By diversifying revenues with a new tax and ensuring those revenues are flexible, the city is better suited to react and adapt to challenges. Fiscal & Workplan Impacts: Based on analysis by the Utilities Department, using water usage data, staff was able to identify approximately 500 single family homes that were vacant for six months within a 12-month time period. If we assume a flat rate tax of $2,000 a year, with possibly an annual escalation factor to incentivize behavior, staff estimates this tax would generate $1.0-2.0 million per year. If the tax is effective in driving the behavior of property owners to rent, sell, or improve their homes, this revenue would fall over time. The cost to administer the Second Homes (Residential Vacancy) Excise Tax will need to be refined and will offset the referenced anticipated tax revenue. Additional Considerations: The tax currently only considers vacant residential property, and the current estimates are for vacant single-family homes only. The data utilized to determine the number of vacant properties was based on water utility usage data. Using this data, it is difficult to get accurate estimates of vacant units within multi-family homes and, therefore, they were excluded from the analysis. The city could also choose to tax vacant commercial property, which would have similar challenges to identify an accurate population, but would lead to an increase in revenue. Based on research from the Institute of Economic and Taxation Policy on the impact of existing vacancy taxes, it is unclear if this tax would incentivize property owners in a way that would impact housing affordability. Additional legal considerations have been provided to Council on May 2, 2025. Summary of Additional Research and Analysis on Vacancy Taxes/Fees: Based on staff comparative research, vacancy taxes are typically structured as a flat tax or fee based on property type category, square footage, and/or number of

years vacant, ranging from $1,000 to $7,000 per unit, as summarized in the table below. In addition, cities may include exemptions that apply to vacancy taxes or fees, such as financial hardship exemptions.

Type

Jurisdiction

Vacancy Tax or Fee Structure

Residential/Commercial

City of Minneapolis – Vacant Property Fee

Flat fee: $7k/yr.

Commercial

City of Lakewood – Vacant Property Fee

Flat fee: $700 every six months and $800 emergency service response fee

Residential

City of Berkeley – Empty Homes Tax

Tiered flat tax based on property type: $3k/$6k for 1st year, $6k/$12k for 2nd and subsequent years.

Residential

City of San Francisco – Empty Homes Tax

Tiered flat tax based on property square footage: $2.5k-$5k.

Commercial

City of San Francisco – Commercial Vacancy Tax

Calculated based on “frontage,” ground floor square footage adjacent to public right of way.

Residential/Commercial

District of Columbia (DC) – Vacant/Blighted Real Property Tax

Increased real property tax rate: $5/$10 per $100 assessed value for vacant/blighted property.

Residential/Commercial

City of Oakland – Vacant Property Tax

Tiered flat tax based on property type: $3k/$6k per unit/parcel.

Residential

NYC - Proposed Empty Homes Tax (Residential)

Expected to be: Flat annual fee OR; % of assessed property value. Vacant > ~6 months

Commercial

NYC - Proposed Commercial Vacancy Tax

Up to $2,000 Per sq ft tax; vacant for 6+ months. Not finalized.

Staff Recommendation: Staff is seeking feedback from council regarding the vacancy tax, specifically on 1) if council would like to consider this further, 2) if the scope of the potential tax should be for residential and/or commercial property, 3) any feedback on the structure, and 4) whether to include this potential tax option in the poll.

Structural Changes: Changes that do not increase taxes but provide the city with more flexibility and increase ongoing potential revenue diversity. 3. General Fund Debt Authorization (No tax increase) A General Fund Debt Authorization tax measure would ask voters to authorize the ability to issue future debt supported by the General Fund. Currently, and importantly, the General Fund does not have authorization to issue general obligation debt to support capital infrastructure projects, such as facilities; recreation centers; age-well centers; and/or public safety. Fiscal Sustainability & Sufficiency: General Fund debt authorization would allow for future financing opportunities to support capital projects without raising taxes. Equity: Debt authorization would not raise taxes or increase the tax burden of historically disadvantaged groups. Resiliency: As noted above, without additional debt authorization, the city is limited in its ability to finance unfunded capital needs or plan for investments in capital infrastructure projects. Fiscal & Workplan Impacts: Staff continue to analyze a range of options for potential debt authorization, ranging from $75.0-$100.0 million in debt capacity. The debt service payments would need to be funded with existing revenues, based on a re-allocation of existing budget and trade-offs of other city services and programs. There is not any unallocated revenue in the general fund. Additional Considerations: Total repayment can fluctuate based on repayment terms and will be subject to interest rates at the time of issuance. Summary of Additional Research and Analysis on General Fund Debt Authorization: This option does support the LTFS initiative by increasing flexibility to address community priorities. Debt authorization doesn’t increase revenue. Importantly, this means that when debt is authorized, there will need to be an offsetting reduction of services in the budget. During the 5/14/26 Financial Forecast presentation, staff will present continuing flattening of major revenue types of sales & use tax and property tax. Based on the latest forecasts, it is highly unlikely there would be unallocated revenues in

upcoming 2027 budget year. For this reason, staff is not recommending pursuing General Fund debt that, if used to support capital projects, will require additional reductions of services in the General Fund. Staff Recommendation: Not consider further for this year, staff recommends including General Fund debt authorization in the Long-Term Comprehensive Plan for future year polling and ballot measures. 4. “Public Realm” Sales Tax (consolidation of existing dedicated funds) This option combines our existing dedicated sales tax funds into one sales tax fund, the “Public Realm Fund,” which would support capital infrastructure, renovation, replacement, and maintenance projects such as, but not limited to, parks, open space, civic buildings and areas, and the public right-of-way, including streets, sidewalks, bike lanes, and multi-use paths, and programs supporting these services. Specifically, this option combines the sales tax increments of the Open Space Fund, Transportation Fund, and the Parks and Recreation .25 Sales Tax Fund. This option does not raise existing taxes. Fiscal Sustainability & Sufficiency: By combining and expanding these dedicated funds, the city is provided with much greater flexibility in the usage of existing revenues. Increased flexibility offers the city the ability to better address unmet infrastructure needs and community priorities. Equity: This option does not raise taxes and does not increase tax burdens on historically disadvantaged groups. Resiliency: By increasing the flexibility of four currently dedicated and restrictive funds, the city is better positioned to react, recover, and adapt to meet any challenges or arising needs that cannot be easily addressed in our current structure of dedicated funding. Fiscal & Workplan Impacts: Within the 2026 Budget, the sales tax revenue that is estimated for these three funds totals $81.9 million. By having this revenue flow into one combined fund, the city can leverage this funding source in different ways that are not currently possible due to the restrictive nature of the dedicated funds. Additional Considerations: Shifting away from dedicated funds will likely cause concern amongst the community and may not be a popular option. As demonstrated in the table below, dedicated funds have been a part of Boulder’s

history for decades. See the table below from the 2026 Budget providing a breakdown and history of the city’s sales & use tax rate.

SALES & USE TAX COMPONENTS IN 2026 Rate

Original Start Date

Last Renewed Date

Expiration Date

.25 Cent Sales Tax Fund (Parks and Recreation)

0.25%

January 1, 1996

January 1, 2016

December 31, 2035

Community, Culture, Resilience, and Safety Tax [7]

0.30%

January 1, 2015

January 1, 2022

None

Arts, Culture, and Heritage Fund [4]

0.08%

January 1, 2025

N/A

December 31, 2044

General Fund

1.00%

January 1, 1964

N/A

None

General Fund [1]

0.38%

January 1, 1988

January 1, 2009

None

General Fund [2]

0.15%

January 1, 1993

January 1, 2010

None

General Fund [3]

0.11%

January 1, 2019

N/A

None

General Fund [4]

0.08%

January 1, 2025

January 1, 2025

December 31, 2044

None

General Fund Subtotal

1.72%

Open Space Fund

0.40%

January 1, 1967

January 1, 1974

Open Space Fund [4]

0.22%

January 1, 1990

January 1, 2014

None

Open Space Fund [5]

0.15%

January 1, 2004

January 1, 2020

December 31, 2039

Open Space Subtotal

0.77%

Transportation Fund

0.60%

January 1, 1967

January 1, 1974

None

Transportation Fund [5]

0.15%

January 1, 2004

January 1, 2014

December 31, 2039

Transportation Subtotal

0.75%

2026 TOTAL

3.86% CITY OF BOULDER, COLORADO

Summary of Additional Research and Analysis on “Public Realm” Sales Tax (consolidation of existing dedicated funds): Staff recommend including the “Public Realm” Sales Tax in the Long-Term Comprehensive Plan for consideration for future polling and ballot measures. This option does support the LTFS initiative by increasing flexibility to address community priorities. Further research and analysis is needed due to the complexity of the existing structure and varying terms of the existing dedicated sales taxes. Staff Recommendation: Not consider further for this year. Staff recommends this option be considered as a part of the Long-Term Financial Strategy. Section 2. Provide scenarios across the priority building infrastructure needs demonstrating how projects may be accomplished over time utilizing existing funding and potential funds raised by proposed ballot measures. Facilities Investment Strategy – Existing Authority and Potential Ballot Measures Staff has prepared a mix of investment scenarios across the priority buildings, from existing authority to potential ballot measures to make progress in addressing the 15

buildings that are of most concern identified in the April 9, 2026, Study Session. The city’s three recreation centers fall into this category of buildings, in addition to the Public Safety Building, Fire Stations, West Age Well and several core maintenance buildings. Due to failing conditions, at a minimum, the priority buildings need roughly $20M over the next five to six years for capital major maintenance simply to keep the buildings operational for the next 10 to 15 years with no guarantees. The East Boulder Community Center project and Fire Station 2 and 4 replacement buildings which are currently funded through CCRS will address roughly $10M of this minimum need leaving roughly $10M in need to address the remaining Fire Stations, Public Safety Building, Penfield Tate II Municipal Building, and key maintenance buildings. Staff recommended this funding should be the first priority with existing sources. A list of the projects that would be executed over the next six-year CIP period can be found in Attachment C. Ultimately, these priority buildings also need funding for major renovation or replacement. In total, this would cost approximately $500M and currently only $100M is funded, leaving a need of $400M.

The below chart illustrates the amount of funding available with each scenario assuming the city will issue debt to make progress on the critical facility repairs. Detailed information on each scenario is provided in the section below. The estimates include general assumptions such as repayment term for debt financing of 20 years.

Scenario A: CCRS Fund – Existing Authority In November 2025, Boulder voters authorized a permanent extension of the existing 0.30% CCRS Sales & Use Tax to continue to support city infrastructure and maintenance projects, as well as nonprofit capacity building and capital investments. The CCRS Fund is programmed five years in the future as a best practice of capital planning allowing for engineering estimates, permitting requirements, and community input where appropriate. The CCRS Sales & Use Tax annual revenue is estimated at $13.9 million in the annual budget. The CCRS Fund is fully programmed from 2026-31 to support major projects to include: Civic Area Improvements, East Boulder Community Center (EBCC) Renovation, and Fire Station 2 and 4 improvements. A complete list of projects in the 2026-31 CCRS capital improvement plan is available in the Adopted 2026 Budget. Financing for capital projects allows the city to complete large projects over a shorter period of time versus building up cash reserves over multiple years to support a large project. The current CCRS Fund for 2026-31 includes an assumption that the city will issue debt of $74.0 million to support the Civic Area, Fire Station 2, and EBCC projects with a payback period of 10 years. Annual debt service is anticipated at $9.0 million annually.

The permanent extension of the CCRS Fund and increase in debt authority approved by voters in 2025, provides flexibility to extend the debt to a repayment term to 20 years, thereby providing additional capacity for priority facility improvements. This does limit the city’s ability to take on new major capital projects for 20 years without additional revenue. Given the $400.0 million in unfunded capital investment needed for facilities designated as priority, staff recommends addressing the $17.0 million funding gap identified for EBCC and supporting an additional $10.0 million between 2026-31 for emergency repairs through the 2027 Budget utilizing CCRS debt flexibility.

Potential Ballot Measures Scenario B: Parks and Public Improvements Mill Levy – Expansion of Use Only This option will expand use of the Permanent Parks and Recreation Fund mill levy to support funding for capital infrastructure, renovation, replacement, and maintenance projects and/or operations. This option does not prevent the city from using these funds for the needs already being addressed by the Permanent Parks and Recreation Fund. While this option provides flexibility in use of funding, it does not add capacity to address unfunded facility needs. Scenario C: Parks and Public Improvements Mill Levy – Mill Levy Increase and Expansion of Use This option will expand the allowable use as described above and increase the Permanent Parks and Recreation Fund mill levy from 0.9 mills to 2.252 mills to the current maximum authorized 13 mill levy. The increase will generate an estimated $6.6 million annually. The increase will provide additional resources to address unfunded and underfunded facility and operational needs. As part of the LTFS, staff recommends an expansion and increase of use of the permanent Parks and Recreation mill levy and increase. This ballot measure supports two outcomes of the LTFS by providing greater flexibility for use of funding and makes progress in addressing unfunded and underfunded facility and operational needs. The city could issue debt up to $80 million with an assumed repayment term of 20 years. The specific project(s) will be informed, in part, by polling to constituents with polling results reported back to City Council in June/July 2026.

Scenarios D and E: Mill Levy increase to Specifically Support Debt (with potential charter amendment) Staff is exploring an additional funding mechanism that could help address priority facility investment needs: specifically, the issuance of general obligation bonds that would be payable through an ad valorem mill levy set annually to service debt and that would expire at the time the bond retires. This type of bond is not limited by the Charter’s 13 mill levy cap: under Section 94 for the Charter, the city can put forth a ballot measure to increase the city’s mill levy above the 13 mill levy cap to specifically fund certain debts. However, under Section 97 of the Charter, the city’s indebtedness (principal and interest) shall not exceed three percent (3%) of the assessed valuation of the taxable property within the city with bonds or other indebtedness payable solely from the proceeds of ad valorem property taxes. Applying this Charter provision, 3% of the assessed valuation of taxable property within the city would limit the city to approximately $150M (principal and interest) in general obligation bonds. One way in which the city could increase the permissible debt is through a Charter amendment to Section 97. Other Colorado cities have similar limitations in their charters, but the 3% is on the actual value of taxable property in the city, rather than the assessed value. If voters were to agree to a charter amendment that maintained the 3% limitation, but shifted the assessed valuation to the actual value of taxable property within the city, the city would have significantly greater flexibility to fund more capital projects through general obligation bonds. Staff is working diligently with the city’s financial advisors and bond counsel to better understand the parameters and limitations of this type of funding option. While Attachment C includes potential funding scenarios that range from $80M in improvements to up to $200M in improvements, these scenarios are illustrative only and will evolve with polling input, further economic analysis, and financial and legal advisement. Please keep in mind that the higher dollar range projects are only viable if voters approved an amendment of Section 97 of the City Charter. The table below includes possible scenarios to support investment in priority facility needs along with estimated tax impact:

Mill Levy Increase

Residential (Based on $1.0 million property value)

Commercial (Based on $1.0 million property value)

Estimated Annual Revenue

Maximum Capacity for Debt (20 yr term)

1.352 (max) SCENARIO C

$85.50 increase

$338.00 increase

$6.6 million

$80.0 million

1.352 (max) + 1.0 debt SCENARIO C and D

$148.74 increase

$588.00 increase

$11.4 million

$145.0 million

1.352 (max) + 2.0 debt SCENARIO C and E

$211.98 increase

$838.00 increase

$16.3 million

$200.0 million

1.352 (max) + 5.0 debt

$401.70 increase

$1,588.00 increase

$30.9 million

$400.0 million

Attachment C is presented to illustrate possible scenarios of how costs may be balanced between community priority projects and priority building needs. Given the early stage in defining what any specific project is, what is shown is a package of projects that could be delivered within the overall funding made available. The costs for any specific project are rough, and currently undefined projects would ultimately be balanced within this funding envelope. There are ways to mix and match these different options, knowing the funding thresholds the community will support and where our community wants to prioritize investment will help refine these scenarios and ultimately any ballot measure. Staff recommend proceeding with polling for a Charter Sec. 97 amendment and consideration of a 2026 ballot measure with key takeaways outlined below:

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•

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A mix of investments can be achieved in each scenario that is meaningful. The greater the level of investment overall, the less tradeoffs will need to be made and the overall time horizon for making an impact on the city’s building portfolio will be shorter. Less investment means it could take another half-century or more to address our facilities’ needs. The less major capital investment funding is made available the more funding will be needed year after year to maintain buildings in their current condition and to keep up with equipment and system replacement needs and failures. This will result in the highest total cost of ownership in two ways: o Inflation and construction cost escalation will make future projects even more expensive. o More “sunk costs” in current buildings before we are able to replace them. Conversely, the more major capital investment funding can be made available, less will be needed to maintain current service levels in existing buildings that will be replaced sooner, and this approach will help stay ahead of construction cost escalation.

Section 3. City Council Charter Committee recommendations for matters to be brought forth this election cycle. The charter committee discussed and is recommending two charter changes be considered further: 1. Charter Sec 130: General provisions concerning advisory commissions. Council passed Ordinance 8639 amending Charter Sec. 130 and placing the amendment on the 2024 special election ballot. The ballot measure failed by less than a 1% margin, with a vote of 21,491 votes for the change, 21,556 votes against. The ballot title stated: “Shall Sec. 130 of the Boulder Home Rule Charter be amended to authorize City Council to set the terms and criteria of board and commission members and amend the language regarding removal of board and commission members as more specifically provided in Ordinance 8639?” Charter committee members believe that some community members voted no because of concerns about changes to the removal language, and asked staff if there was a way to amend Sec. 130 to advance the recommendations of the Boards and Commissions Assessment regarding flexibility on terms and criteria changes, without amending the removal language. Staff believe this is possible. The committee discussed that polling this amendment to gauge community support with no change to removal procedures might be helpful.

2. Charter Sec 176: Open Space Purposes-open space land The charter committee discussed an amendment to this section to explicitly state that wildfire mitigation is a permitted use for open space land. Current language of Sec. 176. - Open space purposes-open space land. Open space land shall be acquired, maintained, preserved, retained, and used only for the following purposes: (a) Preservation or restoration of natural areas characterized by or including terrain, geologic formations, flora, or fauna that are unusual, spectacular, historically important, scientifically valuable, or unique, or that represent outstanding or rare examples of native species; (b) Preservation of water resources in their natural or traditional state, scenic areas or vistas, wildlife habitats, or fragile ecosystems; (c) Preservation of land for passive recreational use, such as hiking, photography or nature studies, and, if specifically designated, bicycling, horseback riding, or fishing; (d) Preservation of agricultural uses and land suitable for agricultural production; (e) Utilization of land for shaping the development of the city, limiting urban sprawl, and disciplining growth; (f) Utilization of non-urban land for spatial definition of urban areas; (g) Utilization of land to prevent encroachment on floodplains; and (h) Preservation of land for its aesthetic or passive recreational value and its contribution to the quality of life of the community. Open space land may not be improved after acquisition unless such improvements are necessary to protect or maintain the land or to provide for passive recreational, open agricultural, or wildlife habitat use of the land. (Added by Ord. No. 4996 (1986), § 1, adopted by electorate on November 4, 1986.) Staff does not currently see any limitations due to charter language for wildfire activities underway, nor has staff been unable to implement wildfire resilience activities or projects due to a concern with Charter alignment. Additional analysis and consideration of potential language, and how it relates to the improvements clause at the end of charter section 176 would be conducted if council wishes to move this change forward

for further consideration. The committee believes this would be a good way to signal to the community the importance of wildfire mitigation.

Section 4. Update on community sponsored city petitions that are circulating for signature. As of this memo writing, the city has received and approved one petition for circulation. Commercial and Residential Vacancy Tax Ordinance This petition is seeking the following: The Petition contains a ballot question pursuant to the Taxpayer Bill of Rights (“TABOR”) and a proposed ordinance relating to an assessment of a tax on owners of vacant residential or commercial properties in the City of Boulder (“City”). Specifically, the TABOR question asks whether the City should increase taxes by $11,000,000 for the first fiscal year and whatever amounts raised thereafter by imposing a vacant property excise tax on owners of vacant residential and commercial properties at a rate of $7,000 a year for vacant residential properties and different rates with a maximum of $4.00 a square foot for vacant commercial space, all subject to annual adjustment based on the Denver-Aurora-Lakewood consumer price index. Under the TABOR question, if the ballot measure passed, the tax revenue would fund affordable housing, downtown revitalization, structural wildfire mitigation, parks and recreation activities, transportation and mobility infrastructure, assistance programs, and code enforcement. Additionally, the City would be allowed to retain revenues from the tax without limitation under TABOR. The proposed vacancy tax ordinance requires owners of properties that are vacant for 183 days a year or more to pay a vacancy tax at the rates cited above, though the rates for vacant commercial space vary based on the amount of gross leasable area that is vacant. Under the ordinance, there are a number of exemptions that owners may claim to be exempt from payment of the vacancy tax. The ordinance also requires certain owners to file an annual occupancy declaration, including those owners claiming an exemption, as a method to enforce the vacancy tax and track compliance. The ordinance requires the City to publish an annual report indicating the total revenue collected, number of occupancy declarations filed, the number of units or spaces determined vacant and all enforcement actions. Petition Language can be found in Attachment E.

Section 5. Potential 2026 ballot measures for the state and region Boulder County TBD Boulder Valley School District TBD State of Colorado As of this memo writing, five ballot items have qualified for the November 2026 election at the state level. None of these items are related to taxes or fees (and as a result will not be discussed in detail in this memo), but they are available for review on the Secretary of State’s website under “On ballot (2026)”: For items involving taxes and fees, five have been approved for circulation and signature collection. These include: -

Initiative 175 – State Revenue Supporting Road Transportation Initiative 195 – Graduated Income Tax Initiative 232 – Income Tax Rate Cap Initiative 308 – Designate Sporting Goods Sales Tax Revenue for Conservation Initiative 309 – Designate Sporting Goods Sales Tax Revenue for Conservation

The last day for the Secretary of State to make a determination on sufficiency of signatures for the 2026 election is September 2, 2026. Because it is early in the process, it is possible that more initiatives that have gone through the title setting process may be approved for circulation and ultimately appear on the ballot in November. The Colorado Secretary of State maintains a website with the current status of all pending initiatives, including those that have qualified for the 2026 ballot, those that have been approved for circulation, and those that are awaiting approval.

Anticipated Fiscal and Workplan Impacts Please see the analysis section above for the fiscal analysis, workplan impacts and considerations for each of the potential options.

Equity Analysis Please see the analysis section above for the equity analysis and considerations for each of the potential approaches.

Climate, Resilience, and Sustainability Considerations Any of these approaches could potentially lead to increases in funding for city services or capital projects, which would inevitably lead to increases in energy consumption or the use of materials. Simultaneously, these options could provide more funding for the city’s environmental, climate, resilience, and sustainability goals.

Community Engagement The Multi-Year Ballot Measure Strategy is a component of the city’s LTFS. In addition to the Multi-Year Ballot Measure Strategy, the LTFS also consists of an engagement component titled Fund Our Future. Fund Our Future aims to both 1) increase the public’s understanding of the city’s financial situation and constraints (e.g., overreliance on sales tax, limitations of dedicated taxes), as well as 2) receive the public’s input on the desired level of service, prioritization, and feedback on trade-offs of unfunded priorities, including considering alternative streams of revenue. The resulting feedback will be used to inform potential ballot measure discussions, as well as 2027 budget development and long-term financial planning. Staff supported Fund Our Future by providing data to be used in community conversations on service trade-offs and prioritization. Staff also prepared for Fund Our Future by creating communication and engagement materials such as blog posts (1, 2) and an informational video and podcast. Fund Our Future consisted of nine community-engagement sessions in March and April 2026, where participants first watched a presentation on the city’s LTFS work, and then asked to build a mock budget and assign dollar amounts to various services, as well as various levels of service provision. This was designed to encourage community conversations about trade-offs and the allocation of constrained resources and inform staff of community priorities and the appetite for additional and alternative revenue streams. This final component will be specifically integral to future discussions of the Multi-Year Ballot Strategy. Additionally, staff will be performing a statistically valid community survey in Q2, which will ask survey respondents questions regarding potential tax ballots and sentiment on increased fees and other revenues. This survey will build upon prior years’ community engagement and the 2025 Community Survey. Survey response data will be presented to Council in late June and is intended to both inform considerations for potential 2026 ballot items, as well as the annual budget process.

Next Steps for City Council In late June, staff will return to City Council with the results of the polling survey, the discussion of which may inform 2026 tax ballot measures. In July-August, City Council will consider decisions on any ordinances for the 2026 ballot.

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Attachments A – Ballot Measures Options Matrix B – Tax Increments C – Facilities Scenarios D – Major Maintenance: 15 Priority Buildings E – Commercial and Residential Vacancy Tax Petition Language