Matters Memo

City of Boulder City Council Agenda Item Meeting Date: October 15, 2026

Agenda Title Consideration of a motion to adjourn as the Boulder City Council and convene as the Knollwood Metropolitan District Board of Directors; and conduct the Knollwood Business Meeting. Consideration of a motion to adjourn the Business Meeting and convene the annual budget meeting.

Staff Contact • • •

Jeremy Creamean, Controller, Finance Department Brenda Richey, Deputy Finance Director, Finance Department Krista Morrison, Chief Financial Officer, Finance Department

Draft Motion Language Staff requests council consideration of this matter and action in the form of the following motion: Motion to adjourn as the Boulder City Council and convene as the Knollwood Metropolitan District Board of Directors; and Motion to adjourn the Knollwood Metropolitan District Business Meeting.

Executive Summary The purpose of this item is for the Boulder City Council convening as the Knollwood Metropolitan District Board of Directors (“Board”) to provide: (I)

(II)

(III)

A presentation from the metropolitan district regarding the status of the public infrastructure projects within the metropolitan district and outstanding bonds, if any; A review of unaudited financial statements showing the year-to-date revenue and expenditures of the metropolitan district in relation to its adopted budget, as amended if applicable, for that calendar year; and An opportunity for members of the public to ask questions about the metropolitan district.

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment SER Framework Goal Area N/A – the District is a separate legal entity from the City of Boulder and has not adopted the SER Framework.

Citywide Strategic Plan N/A – the District is a separate legal entity from the City of Boulder and has not adopted the Citywide Strategic Plan.

Staff Notes N/A – this is a standard review.

Alignment with Additional City Plans N/A

City Council History In 2019, the city annexed just under 50 homes along the western border of the city in a subdivision called Knollwood. At the time, the Knollwood Metropolitan District served the residents of the subdivision by providing services such as water and street maintenance. As part of the annexation process, the city and the District entered into an intergovernmental agreement (the “Annexation IGA”) in which the residents of the subdivision agreed to dissolve the District by transferring the provision of the District’s services to the city and to limit the powers of the District following such transfer. The Annexation IGA states that the District shall be dissolved for all purposes except paying financial obligations and outstanding debt of the District. The Annexation IGA also requires that upon such limited dissolution, the Boulder City Council serve as the Board of Directors of the District until all financial obligations and debts are paid and the District can be finally dissolved. On April 17, 2025, City Council accepted the Boulder District Court’s appointment to serve as the Knollwood Board of Directors and adopted bylaws for the District. A more complete background of the annexation process can be found in 04/17/25 City Council Agenda memo.. As the District’s Board of Directors, City Council has the duty to convene as a body and conduct an annual meeting of the Board consistent with C.R.S.§ 32-1-903(6) where no official action is taken.

Analysis In its limited role, the District’s continuing duties include: • All activities related to ensure full repayment of the debt, including: o Opening and maintaining bank accounts. o Adjusting and certifying a mill levy to the County Commissioners of Boulder County. o Enforcing collection of any taxes due to the District. o Complying with all terms and conditions, covenants, or reporting requirements contained in the loan agreements. • General administrative duties of the District, as required by §§ 32-1-701 to 710 C.R.S., including: o Keeping and maintaining books of account in accordance with generally accepted accounting principles. o Preparing an annual budget and appropriating funds. o Preparing for an annual audit. o Maintaining proper insurance.

To this end, the District’s 2025 annual audit was completed as part of the City of Boulder’s annual audit. In consideration of 2026 year-to-date financial results, as of September 30, 2026, the following highlights were noted: • Cash and investment balances of $230,000 • Fund balance of $233,000 • Outstanding debt was $2.2 million, comprised of o BOK Financial Loan: $242,000 (original principal of $500,000) o Academy Bank Loan: $1,970,000 (original principal of $2,270,000) • Property tax collections of $246,000 • Interest expense of $39,000 • In December, the Metro District will make combined principal and interest payments totaling $152,000 in principal and $38,000 in interest. • Operating expenses will be allocated to the District during the city’s year end processes, as will interest income.

Equity Analysis N/A – the District is a separate legal entity from the City of Boulder and has not adopted the SER framework.

Fiscal Note This memorandum serves as a formal fiscal note and administrative update regarding the status of the public infrastructure projects, outstanding debt obligations, and unaudited financial performance through the third quarter of Fiscal Year 2026. This item is a non-actionable, regulatory compliance review. All discussed expenditures fall within authorized appropriations or standard year-end adjustment protocols. •

December Debt Service: The district is fully positioned to clear its upcoming winter debt service requirements. In December, the district will execute combined scheduled payments totaling $190,000 ($152,000 allocated to principal reduction and $38,000 to interest).

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City Reconciliation Processes: Financial ledgers remain open for final adjustments. General operating expenses and interest income allocations will be finalized and distributed directly to the District during the city’s standard year-end closing processes.

Climate, Resilience, and Sustainability Considerations N/A – the District is a separate legal entity from the City of Boulder and does not have Climate, Resilience, and Sustainability considerations.

Community Engagement This is a standard item, and appropriations are limited to those necessary to pay for debt service and statutory reporting requirements. Since 2025 was the first year under the new structure, staff had previously mailed a letter to all property owners providing notice.

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

Next Steps for City Council The City Council, convening as the District’s Board of Directors, will consider the District’s 2027 budget.

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Attachments A – Total Balance Sheet B – Total Statement of Revenues and Expenses C – Operating Budget D – Debt Service E – Schedule of Debt Payable