Matters Memo

City of Boulder City Council Agenda Item Meeting Date: March 12, 2026 Agenda Title Preliminary Discussion on 2026 Ballot Measures

Staff Contact • • •

Krista Morrison, Chief Financial Officer Charlotte Huskey, Budget Officer Scott Carpenter, Principal Budget Analyst

Executive Summary The purpose of this item is to provide City Council with a preliminary discussion of potential 2026 tax ballot measures and seek direction on next steps for the Multi-Year Ballot Measure Strategy, a key component of the city’s Long-Term Financial Strategy (LTFS). The LTFS is a two-year initiative and council priority that focuses on the development of a comprehensive financial strategy to help guide fiscal decision making and long-range financial health of the city. It addresses financial challenges including declining revenues, significant unfunded capital and operating needs, and overreliance on sales tax. In 2025, the city completed Phase 1 of the LTFS, establishing guiding principles, expanding alternative revenue mechanisms, and passing the permanent extension of the CCRS tax. Work in 2026 includes completing the city’s five-year financial plan, advancing Fund Our Future community engagement on service-level tradeoffs, and developing potential tax ballot measures.

For this preliminary discussion, staff have developed a spectrum of types of ballot measures across three categories: • • •

Transformational changes (e.g., sales tax on services; shifting tax mix toward property tax) Midrange incremental changes (e.g., mill levy increases; vacancy excise tax) Structural changes (no new taxes) (e.g., General Fund debt authority; increased property tax cap; consolidation of sales tax funds)

Given economic conditions and early-stage community engagement on Fund our Future, staff recommend 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.

Questions for Council 1. Does council have feedback on the spectrum of ballot options? 2. Does council agree with focusing 2026 efforts on mid-range incremental and structural options?

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 also 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 outcomes-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 MarchApril 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 (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% Community, Culture, Resilience & Safety (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 and Use Tax, and another to increase debt authorization for 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. In alignment with the LTFS guiding principles and project plan, staff has prepared 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.

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.

To support this framework and prior policy guidance, staff have prepared 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 on Attachment A.

The below section describes each of the potential tax ballot options, their connections to the LTFS guiding principles, equity analysis, fiscal analysis, and additional considerations. The options are organized into three broad categories – Transformational, Mid-Range Incremental, and Structural (no new taxes). 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 The city currently exempts most services from being subject to sales and use tax with several exceptions found within the Boulder Revised Code, Title 3, Chapter 2, Section 2(e). By removing service exemptions the city can expand the tax base and increase revenues for the six funds that currently receive the city’s sales and use tax revenues; the General Fund, Open Space Fund, Transportation Fund, .25 Sales Tax Fund, CCRS Fund, and the Arts, Culture, and Heritage Fund. Fiscal Sustainability & Sufficiency: This option significantly increases and diversifies the city’s sales and use tax base. Expanding the tax base increases revenues to sufficient levels allowing the city to fully fund core services, community priorities, and address unfunded needs. Equity: Sales and use taxes are considered a regressive tax as they are levied at a flat tax rate. This causes people with lower incomes to pay a higher percentage of their total income towards sales tax. This effect is worsened when services are excluded from the tax base as people with lower incomes spend a higher percentage of their income on goods compared to services. The below graph from the Institute of Taxation and Economic Policy shows the disproportionate impact across income levels of sales tax at the state and local level in Colorado. Implementing a sales tax on service could reduce the overall regressivity of sales tax since people with higher incomes spend a larger percentage of their income on services compared to people with lower incomes.

Resiliency: Diversification of the tax base and a resulting increase in revenue allows the city to increase contingency funding in addition to fully funding reserve levels. This diversification also adapts the city’s tax policy to better reflect the current economy. In December 2025 approximately two-thirds of personal consumption expenditures (PCE) were spent on services as reported by the U.S. Bureau of Economic Analysis (BEA). Fiscal Analysis & Workplan Impacts: Using a methodology from the Center on Budget and Policy Priorities and high-level city tax filing data on service sales tax deductions, staff estimates approximately a $50 million increase in revenue from taxing services. As outlined in the referenced methodology, the assumptions made are that by levying a 3.86% sales tax on services, this would cause a 3.86% increase in the price of those services and an equal 3.86% decrease in consumption. To be conservative and to address some risks from the self-reported tax filing data, an additional 50% reduction was made to account for non-compliance from large changes to the tax code. This type of change to the tax code would likely require additional staff to educate taxpayers, administer the changes, and ensure compliance. Potential issues with self-reported filing data could cause the nontaxable service sales deductions to be reported at higher levels or netted out of taxable sales. These issues could cause the estimate to fluctuate and are another reason for the 50% reduction. Below is a table displaying these preliminary estimates using 2024 and 2025 data, with a column calculating using only the 3.86%

sales tax rate and second column that calculates the 3.86% including the conservative assumptions outlined above. Year

2024 2025

Non-Taxable Service Service Sales Tax Service Sales Tax Sales Deductions (in 3.86% (in millions $) Estimate (in millions millions $) $) $2,841.23 $109.67 $52.72 $2,667.13 $102.95 $49.49

Additional Considerations: The city could choose to tax specific services or categories of services, such as personal services, amusement or recreation services (those which are not already taxable under Admissions Tax), or professional services. During the February 11, Financial Strategy Committee meeting, staff and committee members discussed the potential for a sales tax on luxury services. While sales tax on luxury services could be considered, staff would need to further analyze and consider the level of subjectivity and categorization of luxury services. The definition of luxury services needs to be specific enough about the types of services or categories of services that would be considered luxury services, while still being broad enough to offer flexibility to apply to new types of services in the future. 2. Increase Property Tax, Decrease Sales Tax The city’s two major sources of revenue are sales and use taxes and property tax. Excluding utilities revenues, these two revenue sources make up 45.2% and 15.5% of the city’s total revenue in the 2026 Approved Budget. Property tax is considered a more stable source of revenue than sales and use taxes since it is driven by property valuations, which are re-assessed every two years. These valuations are less volatile than sales tax revenue, which can be heavily impacted by current economic conditions. This option would reduce the sales tax rate and increase the property tax mill levy, offsetting the lost sales tax revenue with an increase in property tax revenue. This provides a greater level of reliability and predictability compared to sales and use tax, which is more volatile and fluctuates with economic conditions. Shifting a portion of the tax base from sales tax to property tax aligns with the LTFS guiding principles of sustainability, equity, and resiliency by diversifying the city’s revenue and correcting for the overreliance on sales tax. Additionally, the city’s property tax revenue is less restricted than sales tax, which increases flexibility in how the city can use the funds. This increased flexibility helps the city adapt, recover, and adjust to meet community needs and priorities as they change over time.

Fiscal Sustainability & Sufficiency: With sales and use tax tripling property tax revenue in the 2026 Approved Budget, this option diversifies revenues by increasing the proportion of city’s second largest source of revenue. By increasing a more stable revenue source, the city can fund core services at more reliable and sufficient levels. Historically, property taxes have been less dedicated than sales and use tax, currently 85% of the city’s 11.648 mill levy flows into the General Fund. This option would offer the city a greater level of flexibility in allocating funds. Equity: Property tax is considered a less regressive tax compared to sales tax. All properties within a specific classification are taxed at an equal rate, the only difference being the property valuation. Higher incomes are needed to afford homes and property improvements with higher valuations. This can be seen in the graph below where there is a less disproportionate impact across income levels on the percentage of income paid towards property tax in Colorado.

Resiliency: By diversifying city revenues into a more flexible and stable source, the city can better react and adapt to changes and is less susceptible to economic disruptions. This can lead to greater levels of contingency funding and fully funded reserves. Fiscal Analysis & Workplan Impacts: This option proposes a net zero impact to revenues and would attempt to simultaneously reduce the sales and use tax rate

while increasing the property tax mill levy at increments that do not reduce overall revenues. Shown within Attachment B is the revenue generated from various sales and use tax increments. The revenue generated from one mill is roughly equal to the revenue generated from a 0.1% increment of sales tax, with the five-year averages at approximately $5.0 million. Additional Considerations: The city has not increased it’s mill levy since 2011. Over the last several years, state legislation has impacted property tax revenues by lowering assessment rates and implementing actual value adjustments that reduce assessed values. The city does not have control over state legislation changes, which increases uncertainty in revenue forecasting. Recent legislative changes have led to decreases in forecasted property tax revenues. Prior to the most recent property tax reassessment cycle in 2025, assessed values increased by an average of 15% dating back to 2015. This has caused homeowners to experience large increases in their property tax bills. Although the city portion of property tax bills represents only approximately 13% of the total mill levy, there is likely to be pushback from the community on any property tax increases, as property tax increases have historically been seen as less favorable than sales taxes.

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) This option increases the city’s property tax mill levy to the city charter maximum allowable 13 mills. This increase could be focused to fund critical unfunded needs such as public safety (including advanced life support ambulance service); Human Services programs; city facility capital needs such as recreation centers and agewell centers within the General Fund. This would increase the General Fund total mill levy from 9.948 mills to 11.3 mills. Fiscal Sustainability & Sufficiency: By increasing the city’s mill levy, revenues will be increased to help the city fully fund core services, community priorities, and address unmet needs. It also gives the city flexibility by raising revenues within the General Fund. Equity: As noted under option two, property taxes are less regressive than sales and use taxes. Resiliency: By diversifying revenues through an increase to property taxes, the city is better suited to react and adapt to challenges. By increasing revenues within the

General Fund, flexibility of funding is increased, also allowing the city 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: As noted above 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.

4. “Public Realm” 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 would expand the usage of the fund to support funding for 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. 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 and 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: As noted above 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.

5. 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. 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. Staff is aware of a group of community members seeking an initiative petition on this subject as well.

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) 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 and General Fund is limited in its ability to finance unfunded capital needs or plan for investments in capital infrastructure projects. Fiscal & Workplan Impacts: Staff continues 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. Additional Considerations: Total repayment can fluctuate based on repayment terms and will be subject to interest rates at the time of issuance.

7. Increase Property Tax Cap (15 mills) The city’s portion of the property tax mill levy is 11.648 mills and is currently limited to a maximum of 13 mills by city charter. By increasing the cap to 15 or even 20 mills, the city greatly increases the revenue potential of the city’s property tax. This option does not increase the city’s actual mill levy or property taxes, any increase to the actual mill levy would need to be approved by voters at a subsequent election. Fiscal Sustainability & Sufficiency: By increasing the city’s mill levy cap, revenues can potentially be increased to help the city fully fund core services, community

priorities, and address unmet needs. It also gives the city flexibility by allowing for revenues to be raised in the future. Equity: As noted under option two, property taxes are less regressive than sales and use taxes. This option does not increase property taxes. Resiliency: By increasing revenue potential for a stable and flexible source of revenue, the city is better positioned to react, adapt, and recover from any challenges or emergencies. Fiscal & Workplan Impacts: Based on our most recent property tax estimates, which will be updated for the Financial Forecast in May, an additional two mills would increase the revenue potential of property taxes from 2027 through 2031 by approximately $10.3 million per year. If the city raised the cap to 15 mills and increased the mill levy by 3.352 mill to reach the proposed cap, this would raise approximately $17.2 million per year. Shown within Attachment B is how much revenue is estimated to be generated from 2027 through 2031 at various mill levy increments. Additional Considerations: As noted above, 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.

8. “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 and use tax rate.

Given economic conditions and early-stage community engagement on Fund our Future, staff recommend 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.

Anticipated Fiscal and Workplan Impacts Please see the analysis section above for the fiscal analysis, workplan impacts and considerations for each of the eight 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, which is set to be released in late Q1. Fund Our Future will consist of up to nine community-engagement sessions in March and April 2026, where participants will first watch a presentation on the city’s LTFS work, and then be asked to build a mock budget and assign dollar amounts to various services, as well as various levels of service provision. This will both 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 On April 9, staff will present to City Council on the financial landscape of city facility funding needs, including options for recreation center funding and tradeoffs. On May 14, staff, with our partners from the University of Colorado, will present to City Council the annual Financial Forecast, an update on the LTFS, and a specific item on 2026 Potential Ballot Measures, in preparation for a statistically valid voter polling survey planned for May-June 2026. 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 Increment Tables