City Council - Regular Meeting

Tonight's study session of the Boulder City Council. I'm Council Member Rob Kaplan and thank you for joining us. We have two items on tonight's agenda. First, we'll have our financial forecast and our second item concerns ballot measures. Before we go into our work items, I'd like to outline how the meeting is going to be conducted. First, staff will give their presentation. Then, we'll have time for clarifying questions. If you have questions, please wait for staff to complete the presentation. Then, we'll conclude our council discussion responding to staff's questions. Let's start with our first item tonight, the financial forecast. We'll now turn to our city manager, Nuria Rivera Vandermide, to introduce this item.

Thank you so much, council member. Council, tonight we have two separate items, but they are related. Our first item today is our financial forecast, and we just want to welcome our friends from CU who are always great partners in this work. The realities and assumptions in our forecast tonight help shape our upcoming budget as departments are right in the midst of uh thinking about their own uh department proposals. We will also help us this will also help us ground tonight's second item for discussion. So without more here I'll turn this over to Christa Morrison our CFO. Well good evening Mayor Brockett and members of city council. Christa Morrison chief financial officer. As Nuria mentioned, tonight we are joined by our partners from CU's business re research division, Dr. Richard Wickand, uh Brian Ludenowski and Robert McNau. They will be providing an overview of economic conditions informing Boulder sales and use forecast. This will be followed by a presentation from principal budget analyst Scott Carpenter on the city's financial forecast and 2025 year-end results for sales and use tax and property taxes along with an update on key assumptions and considerations for the development of the 2027 budget. Sales and use tax and property tax continue a trend of flattening due to a variety of reasons you'll hear more about in tonight's presentation. We're lowering projections in those major revenue sources for the current fiscal year and future forecasts are being adjusted. This is impactful as these two sources of city revenue are the two largest sources of revenue outside of utilities revenue. staff is closely monitoring expenditure growth with the flattening revenue. The city has taken measures in recent years to manage expenditure growth through

strategic realignments and reductions while focusing on continuing to deliver quality services expected by the Boulder community. Sales and use tax and property forecasts do assume some recovery in future years. Not the historic growth rates experienced by Boulder over the past decade, but modest growth rates nonetheless. There are many unknowns such as federal policy which can have a significant impact, especially on future year forecasting. We'll continue to monitor major economic drivers and conditions with our partners at CU and provide updates to the city council. With that, I'll turn this over to Brian at CU uh to kick off tonight's financial forecast presentation. All right. Thank you very much, uh, council, uh, staff. I really appreciate the opportunity to be here again and, uh, I'm going to go through the presentation and then, uh, Rich and Robert are here to help answer some of your questions. So, I'm going to jump right in because we have a lot of content to get through. And I I'll start with uh, the risks and the uncertainty. So you you just heard a a few of the risks mentioned um but these are many of the risks and many of the points of uncertainty that we're thinking about when we are formulating our forecast. So on the vertical axis we look at the likelihood of a risk happening and on the horizontal axis the severity of that risk and you can see that energy prices have cropped up as a highly likely and high severity risk. This is something that wasn't on our radar even three months ago, but now it poses a uh a pretty great uh risk to the health of the overall economy. But as we look around here, there's there's other downside risks. It's the federal government restructuring, which we know Boulder is uh sort of uniquely exposed

to. There's geopolitical conflicts, there's tariffs, there's foreign policy, there's immigration policy. On the upside, we we take a look at Sundance as a unique upside risk for Boulder and um tax cuts. HR1 actually, you know, provides some tax relief which can be a form of stimulus for uh consumers. So, we keep all of this in mind as we're going through our forecast. So, I'm going to leave you with just a few salient points. Uh number one is that economic growth has been modest. So when we take a look back in the fourth quarter of 2025 um the Bureau of Economic Analysis does does three estimates for overall uh gross domestic product or the value of all the goods and services produced within our economy. They adjust this for inflation and um when they when they produced the third and final estimate of GDP it was lowered to 1 half of 1% in the fourth quarter. It improved a little bit in the first quarter of 2026 to 2%. And the forecasts for the second quarter are even a little bit better when looking at the GDP now uh uh and now cast from the New York Fed. Um but still when we take a look at medium-term growth or long-term growth, we're we're trending below uh that long-term average. And I also put up here a couple of alternative scenarios. So there there are economic situations in which we could enter a recession and uh actually see decreased GDP but on the other side we also see potential for um upside growth and we take that into account when we're doing your forecasts. We model uh Boulders's revenue under alternative economic scenarios. So point number two here is that employment growth has stalled. You've probably heard this um in the news quite a bit, but when when we take a look at national

employment growth, one thing I'll point out here is we're starting with a left axis at 130 million jobs. And you you can see the impact of the pandemic recession and the climb back from that event. And we reached that pre-recession peak in 2022. And there's this inflection point where we started adding jobs but at a slower rate. And now it's really flattened out nationally to where we just grew at two ten of a percent year-over-year in March. And uh in fact, when we take a look at the revised data from the Bureau of Labor Statistics, this is the national employment data. In 2025, we added just 10,000 jobs per month on average for the year. And last year, there were five months where we had employment loss. Now if we look at where that uh growth and where the losses were coming from um there was a disproportionate amount of growth coming from health care. So when we remove the health care sector there are actually 10 months of employment decline nationally in 2025. 2026 has shown a little bit of a rebound. We um for the first three months we had an average job growth of 68,000 jobs per month. But you can see the volatility that we have here. It was a strong up month, a strong down month, then followed by a strong up month. We actually have the April data now. And uh and it was moderately up as well. So perhaps we've seen a little bit of a turn uh within the the job market. The the slow job growth though is also true within Colorado. Uh in 2024, we added just 1,400 jobs per month. In 2025, we lost just over a thousand jobs per month. And here in 2026, we're averaging a loss of 2,000 jobs per month. So just uh in contrast to the nation where the nation has seen some modest growth in 2026, we're seeing

modest decline in 2026. So Colorado is suffering a little bit more of that uh that job loss. And I like to put this in perspective over time. So on the left axis uh the the left chart here we're looking at job growth by year in Colorado starting in the year 2000. And I'll point out there there are many uh periods where we had employment loss in Colorado. But all of these revolve around recessionary events. So in uh 2000 we had the dotcom bust and this disproportionately impacted Colorado where we recovered more slowly than the nation. Then we have the financial crisis in uh 2008 2009 and then COVID. But what's unique about 2025 is we recorded some job loss without the nation uh being exposed to a recessionary event. So point number three here is that the energy spike poses risk to inflation and consumption. And um clearly on on the left uh in the left chart here we see the sharp rise in inflation in 2022 and then the fall of inflation and it really was oscillating around that 3% mark for um a couple of years. But what we've seen now is that there's been a rapid increase in inflation in a very short amount of time. And um we we point to this really being um uh largely attributable to the war in Iran and the energy price spike. We have data for the nation for um April and uh for the Denver metro region, we get it every other month. So we have this for March. Um but now for the the nation, we've seen inflation uh really creep up to 3.8%. The March data for the Denver metro region, the only region that's reported for Colorado was at 4.2. And uh we look at this h this housing

component which is almost half of the basket of goods and services that we uh spend our money on. And uh this housing piece is growing much higher than the nation overall. This is a little bit confounding to me because we have slow home price appreciation right now and we also have flat or falling rents within the Denver region. Um, so I I I personally don't quite understand why this is so high, but this is how the measured data is coming in. So, we're seeing elevated prices. So, keep that in mind as we're talking about your revenue growth and if you're having real growth in, uh, in your sales and use taxes. So, uh, related to inflation, of course, is energy. Um, these are the, uh, average gasoline prices for the state and for the nation. And I I would point out a couple of things here. one, when uh we take a look at the current level of gasoline prices and trace that back through time, it's not the highest level of gasoline prices we've ever had, they were actually higher in 2022, but this is in fact the fastest increase that we've ever had in gasoline prices. And so when we compare gasoline prices uh the week of May 4th back to late January, we're measuring a 93% increase in gasoline prices in Colorado and a 50% increase nationally. We're still a little bit below the nation, but through time we tend to be a little bit below the nation more than we are above the nation. So that's a shock uh not only to our pocketbooks as we are uh spending money on fuel. uh we start to have to shift our our discretionary spending from um uh other items that we may be purchasing to energy and that can uh also be impacting sales and use taxes which we'll talk about in just a moment. But I think it also has a psychological effect where people feel like they might they may need to hold back more or change their spending patterns.

Uh so what is the Fed to do? Right? So the the Federal Reserve has this dual mandate of full employment and stable inflation around 2%. And so I demonstrated that um uh employment growth has uh been pretty modest. It's it's it's uh modest nationally. It's decreasing in Colorado. And at the same time, we have elevated inflation. And so uh the the Fed is sort of in a a quandry about um uh uh interest rates. If they raise interest rates too fast, then they could really slow down the economy further and this could be damaging to employment growth. If they lower interest rates, it could fuel more uh economic activity and have upward pressures on inflation. And so um they've decided to just keep rates steady uh during the last few meetings. So, now turning to the retail environment, um, we're we we take a look at national retail sales in black and Colorado taxable sales in uh in this this sort of beige brown color. And I I put this up here because um uh Colorado's taxable sales are not decoupled from what happens nationally. You you can see that these these two uh series travel together through time. They don't travel completely in tandem, but this is an an important indicator for us when doing uh your retail sales forecast. And um despite consumers saying in consumer confidence surveys that they're worried about employment, uh they're worried about the labor market, they're worried about inflation, they are not sort of matching their behavior to those worries. they continue to spend and when we take a look at national retail sales data uh growing at 4% seasonally adjusted they are spending beyond uh

inflation. So this is real growth modest but real growth in retail activity in Colorado we have growth but when we adjust this for inflation this would actually be negative growth in net taxable sales. Okay. When looking at the national data, I think it's also important to take a look at what people are spending money on and how they're shifting some of their spending. So, when I took a look at this last month, um the top item here was uh sporting goods and then we had clothing and we had restaurants. All of those were above the the total average for retail sales. uh this month when the report came out that shifted and so now uh gasoline stations recorded the greatest growth that price effect it's not quantity it's price driven uh sporting goods fell um uh restaurants uh also they didn't fall they're just growing at a much slower rate and so I think we're starting to see how the price effect of energy and gasoline is uh shifting what people are are purchasing And uh so I demonstrated that Colorado taxable sales uh travel with national retail sales. And so I also plotted here Boulder taxable sales and Boulder um uh sales taxes. And you can see that all of these really travel together. Uh there's more volatility as we get more local. But this is important for the forecasting exercise. And I think it's also uh interesting to compare Boulders's taxable sales uh um to other large um taxing jurisdictions around Colorado. So this is from the Colorado Department of Revenue. This is looking at the state's share of taxable sales uh from all of these communities. So they this is this is what the state is collecting. And um so it's a real

applesto apples comparison as we look around the state. And so in 2025, the state average was 1.9% which again was modest and again was below the rate of inflation. But um there's quite a bit of variance as we look across the 30 largest taxing jurisdictions. Right? Westminster and Brighton were uh outperforming Commerce City and the city of Boulder were underperforming when looking at this applesto apples uh comparison. And um when we take a look at this for uh this should say uh year to date in 2026 for the first two months. This is just January and February. We see that the state grew a little bit faster for the first two months of the year. And Boulder uh uh uh pretty much matched that state average for the first two months of 2026 year-over-year. So um just closing the economic overview piece um we we take a look at the competitive landscape and uh think about boulders uh strengths weaknesses uh sort of internally and then opportunities and threats that are really external to the city and uh and we're sort of mindful of the unique risks that uh that Boulder is facing right now um from um from uh federal policy and state policy policy to uh um the the tech concentration that we have here uh that has driven been a source or a driver of Boulder's growth for so long. Uh but it's a little bit under pressure uh in the the current time. So very quickly I'm going to go into the Boulder forecast. Uh just a reminder uh that we we look at the national economy uh when generating our forecast and we

we have national economic forecasts from Moody's Analytics. We use Moody's in part because it's the same uh forecast that the Office of State Planning and Budgeting and the and Colorado legislative council uses and the state demography office. So, uh, we're all on this same subscription for Moody's forecasts at the national level. And then what we've created is our own Colorado economy model and our own Boulder economy model. And we're relating how all of these economies and how your tax revenues are moving with these economic indicators so that we can generate uh a a good uh confident forecast for Boulder. And um what we're looking at here on the right hand side is your forecast. And so the the the black line is what we consider the most likely path for Boulder. Uh but when we produce this for city staff, we run your forecast through a more pessimistic economic outlook, through a more optimistic economic outlook and then we also present the upper and lower statistical bounds so that you know really that margin of error where um we we believe that uh it's highly likely that your revenues are going to fall within uh these bounds as it as we march through time. And uh when we're doing the forecast, we don't just take your total sales taxes and total use taxes and project that out. Uh we actually forecast it by component. So we we get uh taxable uh or or sales taxes from grocery stores and from restaurants and computer sales and auto sales and building materials and so on. And we've created equations to forecast out each each of these items. uh and and then we sum those up to your

total. And we we believe that that produces a better forecast because depending on the economy, sometimes we see uh divergence in how these individual components perform. And and so this is again your forecast. And so so uh you can see your history here where we saw a dip down in 2020, a rebound, and then it stalled a little bit in 2024. But we have slow but steady growth throughout the horizon. And it shows up here as well in the table. So we go from 175 million down to 173 and then it starts to march upwards. Not a very fast a very fast pace but uh upwards nonetheless. And so I think it's helpful to take a look at this in percentage terms as well. So sales taxes and use taxes. We see much more volatility in use taxes through time. Um, but keep in mind when you're looking at these numbers, the rate of inflation that is behind them, right? So, even though you had growth of 1.6% um, uh, sales and use taxes in 2025 and we're projecting 1.6 in 2026, when we adjust those for inflation, that is a real decrease as far as purchasing power goes uh, from that sales and use taxes collected. And with that, um, I just want to thank city staff for all of their help as we, uh, go through this forecasting process. Uh, they're an incredible resource. They, they help us understand the numbers that they're providing us so that we can turn around and, uh, produce what we believe is a pretty good forecast for you. Uh, so we we have really, um, appreciated this partnership through time. Thank you.

Fantastic. Thank you for that. Um, now I will ask uh does council have any clarifying questions? I don't see any hands raised. Okay. Comments? I got a question, Rob.

Sure. Uh well, thanks for that presentation and uh yeah, I mean it's kind of sobering what's going on uh for sure and unpredictable to say the least. Um my question kind of centers on how since some of this might be maybe perhaps a little transient, right? I mean I think a lot obviously you pointed out the oil stuff as being a big a big driver. If things were to sort of correct themselves, h how long do you see that lag lasting? You know, if the conflict ends and things kind of open up, are we talking like two months or are we talking six months to two years before that the impact of all of that finally works its way through the system and and either prices and the cost of just use of oil and gas comes down? I'm just like what's the lag on the responsiveness to things in that regard especially with regards to how what's going on with oil. I'm I'm curious about that.

I don't know if my colleagues want to jump in. I mean the typical story is like six months in both directions. Uh you get the immediate you should get a fairly immediate effect on gas pump prices coming down. But there's other uses of petroleum and they've been built into the system at this point. Uh, and so, you know, how does that go in reverse, if you will, as it comes back down? But I, you know, tying this to what Brian was saying about the Fed policy, I think if they saw that happen, at least they would be more comfortable that the inflation rate was trending in the right direction. right now with the way it is, they have no confidence that inflation is trending in the right direction. As a matter of fact, they think it's trending in the wrong direction. It's on its way up. So, it's it's putting them in a very um very much wait and see, but I'd say a conservative stance in terms of, you know, rate cuts or any sort of stimulus.

And just a followup, is this kind of the prototypical stagflation conundrum that we face right now? It is. But, you know, just a a little slight bit of context. Everybody, you know, I people laugh when I say this, but everybody says, "Well, you've been around so long. You've heard all of this stuff already, and you've gone through all of this stuff already." And and I have seen oil spikes before, and I have seen these other types of things. But the overlay of the demographic change in the country and in the state is significantly different than it's been in the past. We have the aging population with the aging health care costs and and retirement costs and so on. But we also have a significantly uh lower immigration and so you know overall rate right now the US last thing I saw was below replacement rate in terms of population. So we've kind of moved into the Japan uh and other place you know Greece and Italy kind of mode of of of shrinking base. So in so it's this is a long answer to a short question. The uh stackflation I would say is people would argue absolutely but some of that uh you know slower level of employment growth also is being impacted by the demographics uh Brian mentioned sort of briefly but both nationally and in Colorado labor force is in decline right now. Total labor force. So, when you have that as a backdrop, um you're not going to get as many jobs and you're still going to be able to keep a relatively low unemployment rate and that's what we're seeing.

Okay. I apologize if I'm out of order. A lot of hands went up quickly. Um just want to remind you we do have a second part of this presentation. Um Tara, you're still muted. Yeah, I think I wasn't next. I think Nicole was next. Do you think so? I don't really care though. Terra, if you I don't either. I'll just do mine. It's just one question. I'll just just one quick thing. Rob, if you open the participants tab, it'll show people in the order that their hands were raised. Oh, it's in order. Nicole,

awesome. Thank you. And Rob, can you um help me? How my ADHD brain with data goes in so many I have so many questions. So, can you help me focus how many like is Yeah, let's let's start out everybody if we can just do one question because there's a second part to this and then we're going to get into the meat of the ballot measures.

Okay, thank you. Um, first of all, thank you so much. This is always one of my favorite presentations of the year. So, just really appreciate you all taking time and coming to help. Um, so our main job tonight, I think, as council is to pick a scenario, one of these scenarios to help out with the budgeting process. And one of one of the things I've been worried about is recession. A couple of your graphs um made me a little more concerned I think that I came into the meeting with in that um the job growth, Colorado job growth and the um gas prices, both of those seem to track like big increases or or decreases seem to track recession periods, right? Um, and I guess I'm I'm looking at the the both of those markers for 2025 and the initial start of 2026. Like, is that something we should be thinking about? Because it kind of looks like it matches the prior periods where those things were going up or down.

And I I can't see my colleagues faces, so I don't know if they're respon they're jumping on this or not. I would just make the following. Uh, you're you're seeing GDP growth. We're still seeing employment growth. The kinds of things that mark a recession are not there yet. And that's why it's not built in. And I I don't think it should be built in. Now, the caveat you talked about the gas price. My caveat on this is you can look you can go back and look at history. If oil prices remain elevated for a period of time, you know, six months or more, we've almost always gone into a recession with elevated oil prices. We're probably a little less sensitive to oil price surges than we were in the past. The country is less oil dependent, not just automobile wise, but even industry uses less oil than it has in some of the major times in the past. But all of that said, um I I wouldn't bet against a recession if we don't resolve this uh energy price spike that's there now.

Thank you. Okay. Me, Rob, you are muted, Rob. I'm sorry. Oh, I'm sorry. Tara, yes, you're up. Sorry. Okay. I only have one question and I'm gonna comment that I'm kind of in a downer mood right now from this presentation. So, I'm agreeing with Nicole on that. Um, why do you think we have job loss compared to the rest of the country? I was thinking that was in reference to one of the um slides.

Brian, are you gonna comment or Robert? Well, I I think that um there's a a couple of reasons. One, uh still when we take a look at Colorado over the long term, coming out of the Great Recession, over a 15-year period, we outperformed the nation in almost every way. We we were a top five economy uh in Colorado and uh the envy of most other states. Um and so so we're I I guess contrasting short-term growth to the long-term growth is sort of interesting because um short term, yeah, we're we're losing jobs uh in the very short term. So are 27 other states or so. Um but over the long term, including the current period, we're still among the leaders. And so I think part of it is um other states hit their uh hit their stride late and they're playing catch-up and they're growing faster. So that's part of it. Uh but on the other hand, we truly are growing slowly or not at all. And I think part of that speaks to our industry composition where our our some of our tech jobs have been hit. But it's not just tech. When we take a look at the industries that are losing jobs right now, it's pretty widespread. And um Rich talked about the demographics. We have slow population growth. Um uh few that we when we take a look at net migration to the state, it's it's a a one of the smallest periods in recent history. Um we have a decreasing labor force and part of that is retirees. we have 30,000 people or 40,000 people retiring per year and staying in

Colorado. So, our labor force is shrinking a little bit. And we're also seeing demand for workers uh slip. So, um uh taking a look at job openings, they're not as high as they were a year ago or two years ago. So, um I I don't think it's necessarily any one thing. Uh but we're, you know, all of these things together, we're seeing some job loss.

I just add uh one thing to Brian's list there that uh it's quite apparent that Colorado is is being picked on by the uh Trump administration in terms of u some some important adverse impacts on the state budget. and that filters down to uh to Boulder in particular, but other municipalities too. Um so I know we're concerned about um the federal labs, the loss of jobs there. Uh I'm not sure how much of that has shown up in the data yet, but but uh so there's a variety of ways in which u Colorado is is being adversely impacted by what's going on in in Washington.

Ryan,

thank you. Professor Luundowski and team. Um so you you've give kind of a big context about risks, opportunities, um threats and so on. Um sort of covering a lot of landscape and then you've z and given us some some aspects of of of revenue. Um and we looked at sales, you've looked at sales tax, revenue projections. Um I'm curious about the sales tax versus property tax sort of matter. I don't think you if I missed unless I missed it, you didn't really touch on property tax and perhaps that's because it's just me assumed to be relatively stable, but um could you just comment on would would you put Boulders have you looked at the idea of Boulder's ratio of sales tax to property tax as something that represents like a disproportionate issue for our city versus others?

I I haven't looked at that ratio. I think that'd be interesting to take a look at. And I I think uh um the the finance presentation will show you a lot more about the property taxes. Um we we do work on that as well, but uh the formula has gotten a lot more difficult in Colorado. Uh so it's it's been difficult to sort of um uh forecast it out with some of the the uh the price reductions on actual values and changes in the assessment ratios. So, I'll defer to city staff on that one.

Thanks. Um, I'm going to call on myself real quick. Um, we have a new SEC chairman, Paul Atkins. We don't know what his uh um actions are going to look like, whether he's going to basically be a puppet to Trump or not. A lot of people saying he's not. But my question is for the city of Boulder, like in Colorado in general, if we do move into a recession, how does that compare over say the next 18, 24 months? How does that compare to um the SEC actually lowering interest rates and going into quantitative easing, which is going to boost up inflation?

Do you mean the Fed? The Fed. Sorry, Fed. It's uh Walsh, not uh Oh, I'm sorry. I meant Walsh. Yep.

Yeah. Well, I usually go off on my sort of story about this. So, I you I'm assuming he's not going to be a puppet, so maybe that's a bad assumption. I'll just start with that. But, uh a loss of independence by the Federal Reserve would be absolutely critical to financial markets. uh and globally and the US is is floating a lot of debt right now and only more by the month. So I would I would argue it it's likely uh even though it's going to be you know quote quantitative easing the ultimate impact is it's going to be driving up long-term interest rates in the economy if we start to sort of see that expansion not in the short term but in the longer term combined with the debt. So um I don't think it would create the recessionary example. I think it would it could create in the short run I think it could create the the super stagflation sort of one. We we don't get that much job growth and we get much higher inflation. So that would be you know my my best scenario on that one wants to jump in on Mar's thoughts on that. Yeah, I would add that uh in our discussion so far, there's been a focus on gasoline prices and the war in Iran and now the the Fed, but there there other sources of economic uh chaos or weakness uh resulting from a number of other policies coming out of this administration. uh like suddenly tariffs are are are not even under discussion and yet yet that

continues to be I think a long-term drag on the economy. Um and um just just kind of the the uh the chaos of of um executive orders that that uh are punishing some companies and favoring others. And I I think uh you hear a lot in the news um when when um small business owners are being asked about the economic situation and they really feeling the pain of tariffs still even though the initial round of tariffs were sort of rescended by the Supreme Court but those small business owners are not uh they're not in a line to get any of the rebates that are um mandated now as a as a result of the Supreme Court decision. Um it's it's the importers themselves, the the you know the shipping companies, they're the ones that that paid paid the uh import tax, the tariffs, and they're the ones that are going to get compensated even if they had passed those costs on to the businesses. It just seems that uh things the thing that that uh this administration has forgotten is is that often the tariff impact falls heavily on uh producers that are want want to purchase these uh inputs on the world markets and it's just raising their costs. So I I'm I'm not at all optimistic about affairs even even if the war in Iran were to to be terminated and the straits were open.

Got it. Thank you. Looks like we have another question. Taisha.

Um yes, thank you so much um for this information. I missed the first five minutes, so I apologize if that if my question is related to that, but Nicole, when you mentioned scenarios, it got me thinking of the water supply scenarios. Um, and I'm curious the intersection with the scenario planning that happened for these forecasts and how that aligns with the very concerning scenarios that were presented by our water department on July 31st, 2025. I I also just did a control F on the document to just find water. I do that in every spoiler alert. I do that every time I read a document. I find out how much time how many times water is mentioned. Water is mentioned three times and it actually is just mentioned on the same line about water, storm water, storm water, waste water. That's it. That's the only time. And so I'm very curious how was water considered? And then the second part of that is specific to the water scenarios that were presented um by Joe and his team last July.

Yeah. Well, the the um most direct answer is that we don't really have a variable in our model that that captures water supply. Uh just so it's not that type of model, but Okay. So, what do we do? What can we do? Oh, yeah. I'm I'm getting there. Okay. Uh the the uh that's one of the reasons that we provide these alternative scenarios that uh for example, we can't anticipate or we say we couldn't um a year and a half ago say anticipate that there would be such a disastrous winter for the ski season and snow pack

what's happening now. So um so so to handle those uh unanticipated shocks uh that's why we present this range of forecasts and right and and so uh we we like to to u have the the finance experts in in on the working for the city to u make a decision about okay

whether they want to adjust these these down. Thank you. So just to clarify, water was not considered and the evidence that we have, the very deep evidence that we have on the water bankruptcy per the United Nations. They're not calling a water crisis anymore. They're calling it water bankruptcy. And as we look around the room, most of the things that you see in that room came on a shipping container across an ocean. Um and so, you know, again, I appreciate the energy conversation, but I am disappointed by the water. Will there be an opportunity to provide feedback or what's the next step on this? Is this just question time? Yeah, this is um focused on the financial forecast right now. And is it just questions or is it comments on

It's one question and then we're going to go on to um the next segment and then we will have two more questions for council around finance. Yes.

Okay. Awesome. Then I'll hold for for that. But it was very helpful um to know that water and water projections weren't considered in this. Um, I'm also curious on just we talked I heard you talk about oil prices, but I didn't hear you talk much about the and I didn't see it in the document either, just the pro dollar um, and just the the valuation issues that are happening with the um, you know, many countries not transacting in the dollar anymore as it relates to oil and the impact that has on our economic forecasts. Well, to the extent it would appear in the forecast, it would appear in the Moody's macro forecast and it would be under the category and Professor McN here, but it's under the category of stability of the dollar and international trade, which is built into their national macro forecast.

And I apologize, I only read the 17 pages. Was there a link to the deeper dives that you're indicating for the Moody's um analysis? What I got was 17 pages. Did I miss something? We we describe the scenarios in there and then we provide the the longer uh description to city staff. So, I'm sorry. My question was, did I have access to the information that you were sharing around the dollar or was that only provided to staff? I I don't think you had access to it. It wasn't in the report, I should say.

Okay. Thank you very much. That's the end of my questions, Rob. Thank you. Hey, Rob, can I just offer a point of clarification real quick? Just help. I I I was actually really struggling through that last little bit. I I um I just have to say it that was not working well for me and landing well with me with interrupting our distinguished speakers. And so I just want to hope that all of us can just respect our distinguished speakers. I'm sorry. Are you trying to give that Yeah, I just have to say

I'm I I I don't I I although I appreciate as we are I'm sorry um speakers we are a self-governing body. So I appreciate us using this. Um I'm I'm saddened that that was how you felt that that I impacted you. Um Matt, but honestly it is a sign I am I am so concerned. Uh and I actually was asking direct questions and I was not getting the answer to the direct questions that I was asking. So although I I hear you and I will continue um as a former commissioner for Colorado Parks and Wildlife and all of the different things that I do to be as respectful as I can. Thank you. We don't need the We don't need the resume. We We know where you're where you've been. We're wasting time.

My point I hear you. But my point is I hear you. It's Rob's decision. It's Rob meeting. We just need to have respect for our distinguish.

What I I I don't I don't appreciate this. Um and I'm wondering on the council procedure um what the process is. I heard your complaint and I said, "I'm sorry you feel that way. Your feelings matter to me and it was not my expectation to disrespect our experts." However, it was my um my right as a council member to ask them clarifying questions related to the information that we as council members and the public is provided on this very critical matter of our finances. Thank you so much, Rob. Okay,

let me uh let me reframe this. We're going to turn this over to Christa. She's going to finish up the second portion. We're going to ask one question after Christa's done one. Um and we can ask a clarifying question, but let's try to stay focused on the financial forecast and then we move into the next one on ballot measures. I know there are a lot of ancillary things that tie into this, but I just want to make sure that we're focused and we have this limited time in this limited time. So, I'm going to turn this over to uh Christa.

Yes, thank you for that. And uh Scott Carpenter, principal budget analyst, is going to pull up uh the city's financial forecast um specific to the utilities and the water scenario questions. Um, Council Person Adams, uh, we will work with, uh, utilities as they develop their 27 budget to get more information there. So, with that, I'm going to hand this over to Scott Carpenter to, um, provide uh, the financial forecast, which is informed by the information uh, that you just saw from CU.

Thank you very much, Christa, and good evening, council. Uh I'm Scott Carpenter, principal budget analyst for the central budget team within the city's finance department. Happy present happy to be presenting the 2026 financial forecast tonight. For tonight's agenda, there will be a recap of the actions completed in 2025 and 2026 to balance the city's budget and a preview of the key considerations for the 2027 budget. Next will be an overview of our current forecasts for the city's major revenues, sales and use tax, and property tax. After that, we will discuss general overviews of the assumptions, considerations, and the work that will inform the 2027 budget, including the 2027 through 2032 capital improvement program, such as budgeting for resilience and equity and the long-term financial strategy. The 2026 budget was developed during a time of increased uncertainty and as the city revised down its forecast due to a flattening of major revenue sources. As forecasts were adjusted down, an 8 to10 million potential shortfall was identified within the city's general fund for 2025. To close this gap, the city implemented a hiring freeze in June 2025, requested for departments to achieve 5% operating savings, and made some one-time reductions to internal internal fund transfers and special revenue fund subsidies. At the same time, a $7.5 million budget shortfall was identified in the general fund for 2026. For 2026 budget development, reductions were requested from departments. And while the city has emphasized realignments over the last two years, we placed an additional emphasis on program and fund realignments to help maximize flexibility across all city funds. An example of the careful consideration that was taken to close this shortfall

and implement reductions and realignments in a way that not impact service levels was care. The performance of the care program was analyzed and it demonstrated low call volume for non-p police behavioral health response calls while we saw a 60% increase in response to behavioral health calls with police for the care program was reduced and restructured into a cross- functional behavioral health response team for more effective use of staff time and prioritization of calls allowing for the city to continue compassionate professional behavioral health response to community members experiencing crisis. is in a more flexible and cost-effective manner with or without the presence of police officers. Overall, these actions led to limited enhancements citywide and a 7.8% decrease in the city's general fund budget. Based on the steps taken in 2025 and 2026, the city is not anticipating needing to implement any additional actions taken to balance the 2026 budget, but we will continue to monitor For the 2027 recommended budget, the city is continuing to see a flattening of its major revenue sources due to the impact of state legislation and lack of growth with property taxes and economic uncertainty leading to a flattening of sales and use tax, particularly retail sales tax. For the 2027 budget, a $6.5 million shortfall has been identified in the general fund. As a result, 4% reductions are being requested across all departments, particularly those primarily funded by sales and use tax and property tax. The budget direction emphasizes ongoing reductions, realignments of dollars towards highest use, taking care of existing assets and core services, and reviewing flexibility across all city funds. This year we will be continuing

to focus on understanding the criticality of city services and the performance of our programs and their alignment and and the alignment of those programs and services to the s framework and citywide strategic plan. We will continue our work on the long-term financial strategy and budgeting for resilience and equity which strengthen our foundation for budgeting and financial planning. While it can seem as though this impact to the budget has been sudden, it is important to note that issues between expense and revenue growth were noted in within the blueprint commission reports from 2008 and 2010 where they predicted a $90 million deficit in the general fund by 2030 due to projected expenses growing at 4% compared to revenues growing at 3%. Now I will move on to the city's major revenue sources beginning with sales and use tax. As a reminder, the city of Boulder receives 43 cents of every retail tax dollar that is collected in Boulder. Sales and use tax is comprised of retail sales tax, business and consumer use tax, construction use tax, motor vehicle use tax, and audit revenues. Additionally, of the 43 cents collected from each dollar, it is then distributed across six funds. Open space fund, transportation fund, community culture resilience and safety fund, the 0.25 25 parks and recck sales tax fund, the arts, culture and heritage fund, and the general fund. Five of those six funds are dedicated. These next two slides show the same information with the second slide having an additional graphical representation. This table shows sales and use tax actuals from 2022 through 2025 by category with additional columns to show the 2025 and 2026 budget and the current 2026 forecast. After experiencing a 1% decline in 2024

from 2023, in 2025 we saw a 2.8% increase compared to 2024. However, actual revenues came in below budget. Currently, we are not forecasting growth from 2025 to 2026, and we are now anticipating revenues to come in under the 2026 budget. As I mentioned previously, this is primarily due to retail sales tax. In the first row is retail sales tax, which accounts for approximately 80% of the city's sales and use tax revenue each year. Since 2022, retail sales tax has been flattening with annual growth over the last several years around only 1%. And we are currently forecasting a slight decline in 2026 from 2025. For the 3 and a half% recreational marijuana sales tax, you can see it's a continuous decline from 2022 through 2025 from 1.7 million to 1 million. Um before I discuss the use taxes, I want to note that use taxes can be more variable, particularly construction use for business for consumer and business use. You can see that the city has experienced a decline since 2022, though we are anticipating a rebound for 2026. For construction use tax, you can see the variability that I mentioned with increases and decreases from 2022 through 2025. With how variable this revenue is, we consider this as more of a one-time revenue. And we are anticipating a decline in 2026 after experiencing stronger than anticipated actuals for 2025. Motor vehicle use tax has been stable and we anticipate an increase in 2026. Finally, with sales tax audits, we have outperformed budget since 2023. However, these are considered one-time revenues and can fluctuate each year. Um, this is the graphical representation of the last slide. You can see how a retail sales tax accounts for approximately 80% of sales tax uh sales

and use tax each year with construction use tax fluctuating between 7 to 10%, consumer and and business ranging between 6 to8 and motor vehicle use tax coming at around 4%. Um, as I progress through this chart, it will show the downward shift in our forecasts. is the forecast that informed the 2025 budget shown in red. The light blue is the July 2025 forecast which informed the 2026 budget and the black is the current revised forecast for 2026 through 2032 with our 2025 actuals. As mentioned, the forecasted revenues for 2026 reflect slowing growth with an anticipated contraction. Um, compared to the 2025 budget, we are seeing a $5 million decline in anticipated revenues for 2026 and a $3.6 million decline in anticipated revenues for 2027. This is due in large part to the uncertainty of economic conditions resulting from tariffs, inflations, and overseas conflict. Additionally, we continue to anticipate downside risk as the city could be uniquely impacted by future federal decisions as the Boulder economy is strengthened by CU in the federal labs. The main takeaway is that over the last two budget cycles, the city has revised the sales and use tax forecast down by over eight and a half million in 2026 and 2027. Moving on to our next largest revenue source, property tax. This comprises approximately 12 to 15% of city revenues. The city accounts for approximately 13% of the mill levy, meaning that we receive 13 cents of every dollar of property tax collected. For 2026, $100,000 of actual home value results in approximately $73 of city property taxes. As a reminder, property

tax values are reassessed every odd year. 2025 property reassessments will inform revenue for the 2026 and 2027 budget. Due to state legislation over the last several years and its continued impact on future years, we have seen a reduction in assessment rates and the and the establishment of actual value reductions. This has reduced potential revenue growth and flattened assessment values. This table shows property tax actuals from 2023 through 2025 with added columns for the 2025 and 26 budget and 2026 forecast. Due to the combination of less growth in property values and state legislation impacting assessed values, the city revised down property tax projections by $7 million from the forecast used for the 2026 budget. Um, so approximately 40% of that impact is due to state legislation and 60% is due to the lack of growth. The city is revising down the current property tax forecast for 2026 by 3.1% or $1.8 million based on the decline experienced between the preliminary and the final assessed values received from Boulder County. This is due to the impact of appeals and twothirds of the reduced assessed value was due to commercial property appeals. In addition to the impact from state legislation that has lowered assessment rates and implemented actual value reductions, the city saw its worst reassessment cycle growth since the housing crisis resulting from the Great Recession. Actual value growth across all property types was only 0.2% 2% with assessed value declining by 1.4%. We had anticipated much more growth as the average growth during the

reassessment cycles from 2013 through 2023 was over 14%. That wraps up uh the forecast updates to the city maj city's major revenues. And now I'll just discuss 2027 budget development and direction. Recapping the earlier slide, we are con we are seeing continued financial limitations due to the flattening of major revenues and increased economic uncertainty. Federal decisions are contributing to these conditions with uncertainty on federal grants and impacts to our local major employers. The long-term financial strategy will continue to inform our budget as we bring forward ballot measures, seek alternative funding opportunities, analyze the results of our fund our future and community engagement, and look for strategies to address our unfunded and underfunded infrastructure needs. The 2027 budget will continue to emphasize realignments of existing programs, taking care of existing assets, and looking for flexibility across all city funds. Throughout all of this is the heightened importance of the SAR and citywide strategic plan alignment and the utilization of outcomes and performance data to support strategic decision-making. We are planning for limited to no new funding requests or program expansions. All departments will be preparing and submitting ongoing funding reduction strategies to help close an identified general fund shortfall and we will continue to review and explore revenue opportunities. As a reminder, last year the city focused on realignments and reductions with a similar emphasis on program performance and strategic organizational alignment. This led to an 11.6% 6% decrease in the citywide budget, a 2% increase in the citywide operating

budget, the slowest since 2021, and a 7.8% decrease in the general fund. As mentioned during the April facilities financial landscape meeting, the city has a significant backlog of infrastructure renovation, replacement, and maintenance projects. And this will be a major focus of the 2020 2027 through 2032 capital improvement program. Um with much of that backlog being uh underfunded or unfunded, we will continue to emphasize taking care of existing assets to help address the backlog. The city will also be mindful about balancing investments in ongoing maintenance of existing infrastructure and larger renovations and replacements. The 2027 budget will continue to utilize the principles of budgeting for resilience and equity using outcomes and performance data to support strategic decision-making and organizational resiliency with continued efforts to refine our outcomes. The budget will continue to align dollars with the SAR framework, citywide strategic plan, city council priorities, the Boulder Valley comprehensive plan, and community engagement, particularly the recent fund our future engagement on the city service levels. All of these things will help us inform the strategic reductions, realignments, and how we leverage flexibility of funding across all city funds. Additionally, we want to understand the criticality of city services to ensure funding and core services. Uh in in 2026, the key focus areas of the long-term financial strategy will inform and impact the 2027 budget. Uh there will be the development of a five-year comprehensive financial plan, the prioritization and evaluation of additional revenue opportunities, the

fund our future community conversations on service level trade-offs, and developing uh potential 2026 tax ballot measures within the broader multi-year ballot measure strategy. This slide shows the remaining budget development calendar starting with tonight's conversations on the financial forecast and potential ballot measures leading into department budget submissions in midJune budget submiss budget decision-making on those submissions by the executive budget team in July. During the executive budget team meetings, requests and changes to the budget are evaluated based on the outcomes and performance data by program, their alignment to SAR goals, the citywide strategic plan, community engagement results. Um, and then ultimately the publication of the city manager's recommended budget on August 28th. After publication, there is the city council study session on their recommended budget on September 10th, followed by first and second reading on October 1st and 15th. And with that, that brings me to the closing questions to wrap up tonight's presentation on the final for uh financial forecast. Um, does council have any questions regarding the 2025 preliminary unodudited year-end financial results of our major revenues? Does council have any questions regarding the 2027 budget al economic outlook and key budget assumptions? Thank you,

Scott. Thank you very much for the presentation and same to you Christa. Uh looks like we have a couple questions, Tara. Yes. Are we doing one question still? One question, please. Okay. Um because then we're going to go to the questions for council clarifying questions.

Okay. Um we talked about uh I think it was on page four and you also mentioned it um about the city using program outcomes and performance measures. So you did mention one thing that we cut because it wasn't there wasn't enough uh output outcome for the um what we put into it that was I think it was the care program. Is there any other programs that we have cut because of performance measures? I think it will be good for the community to know that we are tightening our belt since we're going to be asking them for uh to poll on these ballot measures.

I don't have specific examples at the top of mind right at this moment, but I could uh we could uh take a take a look and and bring some back forward.

And I'll just remind I think you're right, Scott, as we're thinking about that. um in some situations where we made reductions uh we also made changes to programs to actually um provide services in a different way um and while we I can't recall the exact number of unfortunately staff um that we um lost last year quite frankly and um it is a hard conversation that we will be having again with departments this year as we reook at um programs and thinking about um meeting our 4%.

Thank you, Tara. Um Mark, well, I had two questions, but I'm going to limit it to one. I'm going to

I'm going to follow up on Tara's uh question, which was pretty much mine. Um it it seems to me you have a little bit of a uh a PR problem that I'm asking you how you would like to address it. In the last couple of years you you've um closed a couple of significant gaps. Uh yet there's very little detail about how you did it. And uh I I agree with Tara. I think the community would like to know how we get to that and and how we're actually dealing with with this. And I'm wondering is that something you can uh successfully address it because there's a a perception out there that we're all we do is spend like drunken sailors and it's it's not it's not true. Um and we are dealing with some difficult financial conditions. And I'm I I guess I'm asking, is there a better way for you to um get that information out to the community so they'll know exactly how we're dealing with this hardship?

Maybe I'll take a stab at that um for our team. But I appreciate that it is something that we um we are trying to continue to deliver those messages. Sometimes it is uh changes in programs as you saw. Sometimes it's reduction in service levels. We talked about that last year in our budget message. we will likely be bringing that forward again in terms of what does that look like because we um want to be transparent with community where we have that. So I'll take that back. We'll continue to think with um our comm's team. How do we share out those changes, reductions um reductions both in personnel or in um service levels because sometimes it's not about people and it's about uh how much whether or not for example Spruce Pool was able to be opened or not. those hours of change last year if you recall. So we'll um be working with our team to make sure that we can think about it and quantify it in ways that hopefully um will get through to community who I know are asking us the same questions.

Okay. I encourage you to do that. Thank you. Great. Thank you. Uh Tina.

Yeah. Thank you. Um, one quick question just going back to the blue ribbon report that predicted that this would be kind of our future at the time. Um, do we feel given the information we have from that and overlaying the great presentation from our friends over at CU, um, do we feel like we're preparing ourselves adequately for the next few years? and and I was surprised to see that I thought we're actually pretty optimistic um sales tax projections from the team over at CU, but are we doing enough as a city to prepare ourselves or were we going to be having the same conversation um even if we do the capital uh taxes, but we're still going to have the operating fund deficits every year. So, how how do we do we feel like we're on track that we found sort of a pathway?

Yeah, Tina. Um I'll jump in here. Um so really this council's prioritization in the long-term financial strategy has set some of this framework. Um in the fall or late 2026 you will see a long-term comprehensive plan coming. This work continues beyond our current year and that's how we're really focused on getting ahead of this conversation. And it'll be a combination of revenue strategies, uh, measures of fiscal health, uh, cost containment measures and strategies to do that. So that is the very embodiment of this work to come back in a multi-year plan coming at the end of 2026.

Thank you, Nicole. Thanks. I just have a a quick question. Um thinking back to the uh economic forecasts, the projections um high, low, optimistic, pessimistic, those which one are we using for for the these projections? Um medium. Okay, thank you. So, wait. Okay, sorry. I was gonna get into a second question.

I appreciate you, Nicole. Um I will uh just chime in that I definitely agree with my colleagues um regarding the transparency of some of these reductions, cost cutings, realignments, and changes for the public to see what we're doing on the other end. We get a lot of reports for um us on financial strategies and moving forward, but it would be really great to have that other side of the balance sheet for people to really see. So, that being said, I'm going to put a bow on this one and ask question number one. Does council have any questions regarding the 2025 preliminary unudited year-end financial results? Seeing no hands, does council have any questions regarding the 2027 budget economic outlook and key budget assumptions? also see. Oh, we've got some hands. Nicole,

I'm gonna ask my other question now because it relates to this one. Um, my question is like the the medium one. I am just curious as to what what got us to medium. Um, my my my intuition would be more pessimistic. So, like I I but you know, you all have seen these numbers for decades and so just really curious as to what what led to that one. Um, sure. Um, so in discussion with our partners at CU, um, we felt that the medium scenario was a good combination of the optimism and pessimism. Um, you know, uh, um, Richard was noting that we were continuing to see GDP growth despite some of the other negative indicators. And so um felt like it was comfortable landing in medium.

It's not a high growth scenario. It's a but it's a growth scenario. I mean to be fair. Okay. Looks like Tina is next. Yeah. Am I allowed to ask a question about the process of the 2027 budget? Oh, sure.

Okay, great. Um, so we get the budget, it's released on August 28th and then we'll have it to review between August 28th and September 10th. And then at that study session, is that a time when if there was an idea that we had or a thought we had about those changes that it could actually be incorporated in the budget or is that something that should happen in conversations prior to the 28th? And I bring it up because this is a very high level forecast and very high level assumptions. Um, so just kind of curious what that looks like.

Uh, I appreciate the question. I'll I'll jump in there and I would say if there are thoughts council is having about the budget. Um, I welcome them throughout this entire period. Right. We I I'll be developing the budget um uh with our executive budget team mostly through the month of July as we get um some of the requests from departments and uh it is a long process to dive deep and question and make some determinations um about some of those realignments uh that is based on the financial forecast. that decisions haven't been made yet. And so if you have concerns and ideas, happy to hear them ahead of time, but certainly we have had conversations at the study session um about um how that budget looks once it's released and um and some requests uh or some diving in deep. And so there's also that opportunity. Uh we have a variety of public hearings set for the budget. So, we will also hear from community. Um, and uh I only just note that with our one-year budget cycle, we are always tight on time. My plug for a two-year budget cycle would actually allow us for more conversations with you all. Um, and so that's something to think about in the future uh as we're as you're contemplating um a desire to talk more about budget, but it is very hard to get those conversations in during the the single year. Thank you for that. Uh Taisha Taisha, you're muted.

My apologies. Thank you so much. Um, so it's very helpful to get the um the big aggregated numbers, but I'm curious in setup for the budgeting process for 2027 if it's possible to get um more actuals or expenses versus actuals like from a programmatic instead of just the departmental. and specifically for those projects that are um you know kind of you know larger than than some of the other the other projects. So um yeah just was curious about um the opportunities in in getting access to that data to that grain size of data. Um, council member, and I don't know, Chris, if you were about to uh jump in, but certainly a lot um some of that data uh likely exists already on open gov and we can get a report depending on exactly what you may um be desiring and we can certainly have a conversation and see what that looks like. um as um I know that the finance team uh has some of those reports that they use to monitor and track what we do.

Um and so it it may just uh require additional information to know exactly those specific projects you may be looking for and so forth. Is that correct? That is correct. Yeah. if you would give us some specifics of what you're looking for. To Nuria's earlier point, um any feedback on the budget process, um we are getting we are starting that with departments now and um and Nura um and myself and the executive budget team. So um any information um if you'd pass that along to the city manager?

Okay. because I'm getting asked by different community members and organizations about like the cost of alpine budget you know budgeted versus actuals um you know Iris you know just some of the larger construction projects some of the transportation projects so um just having that and I know all of this is in available but it's like having a hundred doctors when you go into that in that portal and so um just getting the the grain size would be really helpful so um that's the only question that I have for 2027 is just getting that budget versus actual information. Um especially since some of the um actually the majority of the um items that are for the projecting uh budget for outcomes um is still output data because you're still in the process of getting some of that performance data. Thank you.

How was that? Was that tone good? Just kidding. I couldn't help myself. All right. Go ahead. And Rob, if if I could add, I think there was a really important uh questions at the at the beginning that I just want to address. Um, if the actual summary of the budget and significant changes are available in the budget in brief and it's a nice snapshot view. I think it's really um just a department by department uh view of changes to the budget. So in there you can see significant reductions and it goes at the programmatic view. So I did want to share that uh we can send the link to that. Um but that is available on the city's adopted budget website. It is the budget and brief portion of that and it breaks down um significant changes in the annual budget.

Appreciate that. Um Mark um Chris just as as a side note I I read that budget in brief and the whole budget religiously every year and I think most community members do not derive um the kind of information that that they would like to from that document in terms of of direct understanding of of what is going on what the changes are um etc. So I I I urge um a more straightforward um document because the one that we have is problematic to me.

I appreciate that feedback.

And there is a it seems to me there's a there's a tension here. We are doing, I think, a terrific job of dealing with very difficult economic circumstances and doing the reductions that are necessary um to keep our our budget in balance. At the same time, we are about to consider going out to the community with requests for a vast array of additional funding um for capital improvements projects. How are we going to market both of those at the same time? I mean, it it seems to me that people are going to have a problem with that and I I very much support the capital improvement projects. Uh but I'm not sure how we're going to get that across in a way that's going to pass electoral muster. Have you given any thought to to to that subject?

We've given a lot of thought to that subject, Council Member Wall. it is. Um, and I will say that we knew these would be hard conversations when we went so publicly with let's talk about where we are uh and let's talk where where our funding is. As you heard uh earlier today in the presentation, it's not a new issue. I mean, the blue ribbon commission has been signaling this for a while and here we are and certainly we have added more um more issues to that. So, we I I think we continue to do a variety of different levers. We've done some community engagement. Uh the fund our future survey and you will see that at some point um I think in the summer so soon I think was helpful in educating some folks. We will continue to think about what does that look like because there is a difference between the programs personnel costs that are rising and then all the capital improvement unmet needs right it's all issues that we need to address holistically and I think that has been the interesting aspect of this conversation with community is that we have been very intentional about sharing where we are as an organization completely but we need to continue to think about are there better ways um deeper ways, different ways to continue to raise this issue as we raise awareness and go about thinking about our significant unmet capital and infrastructure needs.

You know, we've already had our first email saying, "Hey, if you just cut out all the wasted funds from our operating budget, we could fund all of those capital improvements just from that." um you know, you roll your eyes and uh but it's a it's a problem. It's it's a communication issue that we're going to have to deal with.

It absolutely is. And and unfortunately, what we will likely continue to see is um where people may ask us to cut is where they may believe has less value, whereas us others uh put value on different things. Um and so we will continue to maneuver through that. Um and really talk about the quality of services, the service demands that community has made over the years, right? We didn't come up with services at um pulling them out of a hat. There was a need for that as that move forward and what could happen, what the impact might be if we um reduce what does that look like? Right? So I I think it's it's a it's a complicated and uh challenging conversation but we are here for it uh as we really think about the stability of our organization's finances.

Okay. Thank you. Appreciate it. Rob, am I next or you might be on mute? I think you said yes though. I was on mute. Thank you. Yes. Sorry about that, Ryan. Okay. Do Do we have comments too after this for financial or is this sort of it? We're just This is the This is it for the financial and then we're going into the ballot measures. Okay. Can I ask two questions? Uh

I'll ask one question. I I can consolidate it. That's fine. Um so thanks team for all this. Um just can you talk about Sundance and and the um plan to incorporate Sundance into our financial projections as things become clear. Thank you.

I can u jump in um to start. Uh so as we collect the actual revenue from Sundance for sales and use tax, it will be incorporated into the sales tax model. Um we are taking a realistic approach uh in year one of Sundance. um trying to get a a a very concise and clear picture of 2027 revenues but also 2027 expenses and making sure that we do not overprogram any revenue that we have not yet received. Um so for year one we are we are going to be very cautious in in in our approach to Sundance.

Okay, that wraps up our financial forecast. I want to thank Richard, Brian, and Robert from CU for contributing um that information. A little bit dire but very important. Um we're going to move on to the next topic now. For the second presentation on ballot measures, staff has divided the presentation into three parts. Um so we'll stop at each part, ask for clarifying questions, and then have our discussion before moving on to the next session. Um, and now I will turn it back to uh, Nura for the item.

Thank you so much, council member. And, um, our next item is a followup from previous conversations, though. It feels like we as a community have been having similar conversations for many years. And, uh, and in fact, we just touched on some of that in our um, first presentation. Uh we mentioned it just briefly that the blue ribbon commission study was already signaling uh decreased sales tax and increases in inflation rates that would impact the operation of city offices and rec centers, construction and transportation cost, personnel costs, building materials, etc. All of those issues continue to exist today with additional demand for services in community. We have shifted some sales tax away from the general fund, increases in inflation. Uh that also uh as we keep uh up with the market on personnel and then sales tax continues to flatten. So uh I will say that in looking back at the blue ribbon uh report, I feel a little deflated that even then they were calling our city's finances constrained. So this is not my word. Uh it seems like it has been around for a bit. We have been charting a longerterm strategy for the past few years and I will say that I am tremendously grateful to you council who recognized the criticality of this work by naming it a council priority previously. the financial expertise of staff who are giving us the right financial data we need to have necessary though hard conversations and departments who've been really thoughtful at looking their programs to address these shortfalls in the past years and have again been asked the difficult uh task of making reductions in this year's budget as we continue to focus on retention and maintaining what we have as we're able to in the moment but it is clear we cannot do that with existing funds and need help in securing additional revenues to address the backlog of unfunded needs across the city and we hope to get your feedback and direction on the best ways to do that as we look

at potential ballot measure items. So with that I will pass it on to I believe Christa it is coming to you.

Great. Thank you Nuria and one moment we'll share our screen here. Thank you Scott. All right. So, this evening we are back again talking about 2026 potential ballot measures. Our agenda this evening, we will review the 2026 ballot potential ballot measures and staff recommendations to include scenarios to address priority building infrastructure needs both with existing authority and potential ballot measures. We'll discuss city council charter committee recommendations. We'll provide an update on community sponsored petitions. And then finally, a uh discuss potential 2026 ballot measures for the state and region. So this is our um conversation we've been having since March and it is uh really each conversation is building upon the next. So staff is providing council information with each conversation designed to inform the next to provide a comprehensive view of the city's financial position, analysis of any constraints or other considerations, alignment to the sustainability, equity, and resilience framework, and community priorities to ultimately inform the 2026 ballot measures. On March 12th, staff provided an update on the long-term financial strategy and presented a preview of 2026 ballot measures. On March 9th, staff provided an update on city facilities funding needs to include recreation centers. Unfunded infrastructure is one of several challenges Boulder is working to

address with the long-term financial strategy. The purpose of tonight's meeting is to provide the current financial forecasts to continue review of 2026 ballot measures, including scenarios to make progress in supporting unfunded priority capital investment needs and to receive direction from council on which ballot measures and charter changes staff should proceed with polling. Um, in speaking with Pbolski Research, they are our experts that we work with for polling. An optimal number of items to poll is three to four. We might get away with five, but just to put that in context as you're thinking about uh the items we're discussing tonight. In late June, staff will return with polling results. We'll also discuss recent community engagement, the fund our future community engagement results. And in July and August, staff will look to council for review and approval of tax ballot measures for the November 2026 election. Next slide, please. So, ballot measures are one component of the long-term financial strategy, which is a multiaceted approach to address decades of complicated issues. restrictions of funding, lack of diversity and types of revenue, our heavy dependence on sales and use tax more volatile to economic conditions, and unfunded infrastructure needs and underfunded programs. Named a C a top city council priority in 2024. The long-term financial strategy builds upon the recommendations of the blue ribbon commission reports of 2008 and 2010 and focuses on taking care of what we have addressing a backlog of

needs. In April you saw a view from our staff of the facility planning and asset management. So providing that comprehensive view of of facility condition and needs. Uh the long-term financial strategy focuses on prioritizing flexibility of funding to meet community needs and recognizing our challenges of restricted funding and coordination of tax ballot measures with broader city financial planning including alternative funding mechanisms and outcomebased budgeting. Also to distribute the tax burden more equitably. Looking to 2026, our key focus in the long-term financial strategy. Uh there are four categories here we're working on. The one we've touched on um during the uh financial forecast, but we are developing a long-term comprehensive financial plan. This work continues beyond 2026. A long-term comprehensive financial plan is in development for delivery in late 2026 and will serve as a strategy con to continue to address over the next years with revenue, financial policies, and service level uh decisions. The long-term plan will build upon the long-term financial strategy work in recent years, combining those revenue strategies, building on balance, ballot sequencing and financial policy updates, as well as fiscal health indicators and continued refinement of the outcomebased budgeting framework. We're working on prioritizing and evaluating alternative revenue opportunities. We've also conducted fund our future community conversations on service level tradeoffs and that again will be coming to you at the end of June

along with polling results. We're also um working on tonight's focus which is developing our potential 2026 tax ballot measures within the broader multi-year ballot strategy. So, how we got here? About 68% of the revenue we collect is already committed for specific purposes. That's voter intent over decades. And it was built with what residents value. But it also means with every cycle, the general fund is constrained to sustain essential services while new and visible programs, emerging and emerging needs compete for every new dollar. Cities across Colorado and the country are working on the same pattern. The long-term comprehensive financial plan coming forward is how we get in front of this. Not by undoing past decisions, but by sequencing the next one. So renewals, sunsets, and new revenue reinforce um others instead of colliding. So this is the chart of the general fund adopted budget from 2016 through 2026. Scott had a slide of Boulder's budget growth over the years in his financial forecast as well. Um in this chart the blue line is budgeted expend expenditures, red line is budgeted revenue. Uh the little green lines are our actual expenditures and yellow is actual revenue. kind of key takeaways from this chart. And if you would go to the next slide in the general fund from 2016 to 2025, actual annual expense growth was 4.5%. Outpacing revenue growth of 4.2%.

More recently, from 2024 to 2026, this gap has widened with annual expense growth at 4.2% 2% while revenue growth is growing at 1.9%. To combat this growing gap, um in 2025, uh we have we closed an 8 to10 million shortfall through a hiring freeze and implementing a midyear um required 5% operational savings citywide. In 2026, we face closing a $7.5 million shortfall um through implementing reductions and emphasized realignments, one-time insal transfers, and reductions of special revenue fund subsidies leading to an overall 7.8% reduction in the general fund. I think I know this is a lot of news and but if you saw in that forecast um beyond um in some of the outy years we really start to see a rebound. It is a modest rebound. Uh but this is the point in time that we're at and measures we're having to take at this time and uh we will look forward to that um rebound ahead. So with that, I will uh turn this over to Scott Carpenter, principal budget analyst to provide an overview of the items we discussed in March along with staff recommendations on those potential tax ballot measures.

Thank you very much, Christa. Um Scott Carpenter, principal budget analyst. Um, the potential 2026 tax ballot measures were developed as part of the multi-year ballot measure strategy, building on our efforts from last year's passage of the CCRS tax extension to have a more expanded approach, focusing on taking care of what we have and continuing to invest in our unmet needs. The options also incorporate prior council feedback to prioritize revenue flexibility and stability, understand the interaction between ballot measures in the broader long-term financial strategy, and focus on reducing tax burdens for historically excluded groups. This slide shows the range of ballot measure options discussed at the March 12th study session. Council reviewed the spectrum of ballot measure options and prioritized four tax ballot measure options to explore further. Those are highlighted in yellow. Uh the options were the parks and public improvement mill levy or expansion of use only. uh the second homes residential vacancy excise tax, the general fund debt authorization, uh and the public realm sales tax consolidation of existing dedicated funds. Uh the next few slides I'll discuss those four potential tax ballot measure options and the staff recommendation. The parks and public improvement mill levy is an option that was brought forward last year and would increase the city's property tax mill levy by 1.352 mills up to the max 13 mills allowable by charter. This would be specifically in the permanent parks and recreation fund and expands the usage of the fund to cover improvements for parks or other public improvements. Or the option could

just be to expand the usage without a tax increase. Um this would 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. Staff is recommending to consider this option and to move it forward to polling. More information on how this option can support priority facility needs is included ahead in the presentation. The next option is for a residential vacancy excise tax, also known as a second homes tax, creating an excise tax on residential properties that are deemed vacant at least 183 days in a calendar year. If passed, the city would be the first in Colorado to pass a vacancy excise tax, which comes with some risk as these types of measures haven't been vetted in Colorado's court system. state legislature attempted to produce enabling legislation for a vacant property or excise tax. However, that tax or however that measure did not pass. Uh but it could have the potential to succeed in future sessions. Uh for the staff recommendation, staff is actually is seeking feedback from council regarding the vacancy tax specifically on if council would like to consider this further if the scope of the potential tax should be for residential and or commercial property. any feedback on the structure and whether to include this option uh it for polling. Um this has a comparison that has present has been presented in the past and updated with current information showing rates um uh commercial uh vacancy options and residential vacancy um taxes for other cities. Um a summary of this additional research is that uh based on our comparative

research, vacancy taxes are typically structured as a flat tax or a fee based on property type category uh square footage and or number of years vacant ranging anywhere from 1,400 to 7,000 per unit. Um in addition, cities may include exemptions that apply to vacancy taxes or fees such as financial hardship exemptions. Um, some communities have a fee such as Mini the city of Minneapolis. Others have a tax um tiered or flat um like the city of San Francisco. Uh, next is the general fund debt authorization. This option will ask voters to authorize the general fund to issue debt. Currently, the general fund does not have the ability to issue any debt. Uh, the debt authorization doesn't increase revenue. Importantly, this means that when death debt is authorized, there will need to be an offsetting reduction of services in the budget to pay for the debt service. The staff recommendation is to not consider this further for this year. This recommendation is driven by the current financial forecast and flattening of revenue requiring strategies for reductions in 2027. Given there is no additional revenue, issuance of debt in the general fund would require offsetting reductions. staff recommends including general fund debt authorization in the long-term comprehensive plan for future year polling and vouchers. Uh and our final uh option uh is the public realm sales tax which combines the dedicated sales tax increments that currently fund the open space transportation and parks and w25 sales tax fund into one fund and expands its usage to provide more flexibility. This option does not raise taxes and the increased flexibility allows for better capital project planning across the entire city system and increases the city's ability to leverage financing options. Staff is recommending not to

consider this further for this year. Uh but staff, however, recommends this option be considered as part of the long-term comprehensive financial plan. And now I will turn it over to the city's director of facilities and fleet uh Joanna Creek.

Thanks so much. Good evening. I am going to provide a brief recap of the facilities investment strategy discussion from the April 9th study session. Next slide. So how did we get here? Our building portfolio and the current challenges we find ourselves in grew over the last hundred years. But we've been working on solutions for less than five. And in the midst of that, mostly reacting to emergencies in our buildings. This is not an easy problem to solve and it will take time. And while our challenge is a big one, we are not alone. The backlog of building maintenance is a nationwide crisis made more challenging by the cost escalation of building equipment and materials which is greatly outpacing revenue and funding sources. Next slide. The city has more than 75 buildings in our portfolio, most of which need investment. To make it manageable, we categorize the buildings and we're currently focusing on the 15 priority buildings. These are the ones that keep us up at night. And tonight we'll discuss options to fund some of these buildings. Next slide. These are the priority buildings, the 15, and all of them provide vital services to our community and are crucial in supporting the delivery of services. They are all in decline, and we're chasing emergency repairs across all of them to keep them fully functional and operational. Using the key performance indicators from the facilities plan, we reassessed or rep prioritized and ranked these buildings. And while some limited investments have helped some buildings hold steady, others have continued to slip, like our recreation centers, our public safety building remains where it was in 2021, at the bottom of the list in the worst condition. Next slide. Due to failing conditions, at a minimum, the priority buildings need roughly 20 million over the next five to six years

for capital major maintenance simply to keep the buildings operational. In your council packet, attachment D lists the major maintenance projects for the priority buildings, and this is a good reference if community members ask questions or if you have questions. You provided feedback in April to find a way to fund these needs, which we can do by using CCRS funds. And I'll turn it back over to Christa so she can talk more about this and other funding scenarios.

Thank you, Joanna. So staff has prepared scenarios of how we can begin to address the unfunded priority facility needs through existing funding and potential ballot measure recommendations for polling. Next slide, please. This chart illustrates how each scenario A through E, and we'll go into detail ahead on each scenario, how each can begin to address priority facility investments. Staff is offering a mix of existing authority along with potential ballot measures. We aren't covering today's specific projects. The intent is for this to be informed through polling the community to determine acceptable funding thresholds and priority for improvements. So you can see in this chart um there's each of the five scenarios that we're presenting. The green line in this chart represents the $500 million need presented by staff in April for the priority facility investments. Scenario A through E is shown with estimated maximum funding each can provide. And with each scenario A through E, the blue line represents the $100 million of existing funding that we already have built into the capital planning. How each scenario can impact or help us address the unfunded $400 million need is represented in orange. We'll go into each scenario in detail ahead along with staff recommendations. A mixture of scenarios is recommended by staff for investment in critical facility needs. The greater the investment overall now the lay the less

tradeoffs will need to be made in the overall time horizon. Not addressing the facility needs will result in a higher cost of ownership as maintenance and emergency repair costs increase along with inflation and construction cost escalation. The ask of additional funding is not considered lightly and staff has been working building best practice standards in re recent years such as the facility investment model you saw in April and budget standards of building in operating and maintenance costs into each building and major improvement. So we're not in this position in the future. So scenario A, this is existing authority through the CCRS fund. As part of the long-term financial strategy work of 2025, voters approved an extension of the CCS tax in perpetuity. The city is grateful for this support and approval of the CCS tax and added debt authority, a primary source for city facility improvements. The CCRS tax brings in approximately 13.9 million annually. The CCS tax is currently programmed fully from 2026 through 2031 to support projects to include fire stations 2 and 4, the Civic area, and East Boulder Community Center. The 2026 through 2031 CCRSCIP plan assumes the city will finance $74 million with a payback period of 10 years for the East Boulder Community Center, Civic Area, and Fire Station 2 projects. The annual repayment over that 10 years is $9 million annually. So what staff is proposing in scenario A

and next slide please is allowed and is possible due to voters authorizing a permanent extension of the CCRS tax. So staff is recommending that now because the tax is extended in perpetuity that we are now able to extend plan debt from 10 years to 20 years reducing the amount of the debt payment debt service payment annually. That gives us additional capacity. And what staff is proposing is that the increased uh amount $17 million is to support the East Boulder Center, East Boulder Community Center renovations. And the additional 10 million is funded between 2026 and 2031 to support critical capital maintenance to extend the life of facilities. So Joanna just provided the the the slide showing critical repairs. uh we would carve out $10 million to support that to extend the life of facilities. Staff does recommend including this additional capacity allowed by the CCRS tax extension uh with the 2027 budget development. Scenario B. This is parks and public improvement expansion only. This would expand the use of the permanent parks and recreation mill levy to support funding for capital infrastructure renovation replacement and maintenance projects and/or operation. This option provides flexibility for use of projects such as parks, open space, civic buildings and areas. While this option provides flexibility, it does not add capacity to address unfunded needs. staff is not recommending an expansion only to address the $400 million priority facility investment needs. An increase

in the mill levy is a viable option to address the $400 million in priority facility needs from revenue alone. Uh this would require a mill levy increase of 6.352 mills. And at the bottom of this table, you will see the estimated impact to residential and commercial property based on $1 million in property value. So that would be one item to increase the 6.5 uh 352 mills and that would arrive at the $400 million uh to address priority facility needs. We are facing decades of deferred maintenance and aging infrastructure and the solutions offered in C through E are intended to make progress at maybe a more affordable approach. This table provides a breakdown of each scenario of the estimated residential and commercial property tax increase based on a million dollars in property value. total estimated annual revenue for each of the scenarios as well as maximum debt capacity for each scenario assuming we would finance over a 20-year repayment term. Scenario C, and we'll go into more detail ahead, is to expand the use of permanent parks and recreation tax as described in scenario B, but it increases the mill levy by 1.352 to the current max 13 mills authorized. Annual revenue from this increase is 6.6 million. And the maximum capacity if the city were to issue debt, uh, we would be able to finance up to $80 million with a repayment term over 80 years. Looking at this table, the estimated property tax impact of scenario C is $85.50 of an increase in residential and $338

increase in commercial. Scenarios D and E are an additional funding mechanism that can help addition uh can help address priority facility investment needs, specifically through the issuance of general obligation bonds that would be payable through a mill levy set annually to service debt that will expire at the time the bond retires. We'll go into more detail ahead, but this is to provide a summary of the addition of each of the scenarios uh with staff's actual recommendation being scenario C and E. That would provide $200 million of maximum capacity so that we can begin to make significant uh progress in the unfunded priority facility needs. against the actual projects and threshold from the increase. Uh we plan to be informed through polling ahead. So as mentioned scenario C is the permanent is the parks and public improvement mill levy increase and expansion of use. Uh this would increase the permanent uh parks and recreation fund mill levy from 0.9 to 2.252 mills. The estimated annual revenue that would be generated is 6.6 million each year to address unfunded and underfunded facility and operational needs. With this regular revenue source, debt could be issued to make progress in priority facility needs. The prior slide breaks down and you can see here if we were to finance um and use this uh revenue source as a a dedicated source for that repayment uh we could finance up to $80 million. Staff recommends polling and consideration to include in the 2026 ballot measures

scenarios DNE. These are mill levy increases to specifically support debt. Under section 94 of the charter, the city can increase the city's mill levy above the 13 mil levy cap to specifically fund certain debts. This is an option that staff is recommending to help address the priority facility investment needs. With this option, general obligation debt would be issued and the mill levy set annually to support debt repayment. A benefit to this option is it allows the city to make progress on the large um backlog of priority facility needs and the mill levy will um end this increase will end when the debt retires. Additionally, the city will only issue bonds for projects when they're ready for major capital investments. So, the mill levy will only increase when the bonds are issued. Scenarios D and E are illustrations of what is possible. um to be uh to begin addressing this significant amount of investment need. Uh polling again will inform acceptable funding thresholds and priority facil facility in improvements and staff is recommending uh scenario C and E. Uh again providing um up to $200 million um for facility needs. The impact of that uh you can see here on residential property taxes is an estimated $211.98. That's based on a million-doll property value. And commercial um estimated in impact is $838 increase based on the million-doll property value. Next slide. Uh thank you. So a limitation with this approach is language written in section 97 of the

charter limiting the city's indebtedness not to exceed 3% of assessed value of taxable property within the city with bonds payable uh solely from ad valorium property taxes. This limits the city to approximately 150 million principal and interest in general obligation bonds. Other Colorado cities have similar limitations in their charter with a 3% debt limitation on actual value of um property in the city. Staff recommends proceeding with the charter amendment changing the 3% limitation to actual value of taxable property providing greater flexibility along with pulling the mill levy increase specifically to support priority facility improvements. So, that brings us to our council questions.

Thank you so much, uh, Christa, Scott, and Joanna. Um, I'm going to do the same thing again, just based on time. I'm going to limit everybody to one question. Um, clarifying questions for staff. And I see some hands raised. Let me get in here. Tara, um, hold on. Did I take myself off mute? Good for me. You're off me.

All right, that's great. Okay. Um, my question is this. I've gotten emails about how property taxes are affect are affecting our commercial businesses, our local businesses. And you all know and you told me that and obviously from the charts that what a person pays on their houses, the businesses, the commercial businesses pay way more. So, we just had this extremely depressing, in my opinion, and pessimistic report about the state of our economy. And now, I do have a question. Don't worry, Rob. And now, it seems to me we're going to pressure, and I'm not saying I'm against this, but we're going to pressure the businesses. What seems like per million dollars is obviously commercial businesses aren't a million dollars. So I guess my question is of all these scenarios, which are going and maybe you can answer this, which are going to pressure our businesses so much more considering we already have that transportation maintenance fee that we just added on by the way, right? That it is going to make our local business community, it's going to make it unsustainable for them, the commercial properties. So whereas I get that we need to fix our buildings, we also don't want to crush businesses. So in that sense, do you still have the same opinions about all of your what we should pick? How does that make sense?

It does. Well, like I know you looked at it from the point of view is how do we solve all problems, but I don't want to make more problems with our commercial businesses like fleeing the state. So, in that sense, what would you pick? Well, and I'll start here and maybe Chris feel feel free to jump in, but um I think that is the intent of polling to really determine the threshold of which um the community both residential and and and commercial um is is wanting or what they're wanting to support for these facility needs. And I think that is really the purpose of polling ahead. So just to be I'm sorry. So as an example of how much an average commercial property pays what we what is an average square foot here because it's not like $588 per you know in other words do you have an approximate amount and or is that not a do you know what I'm saying? It's like not $588. It's considerably more than that. So, I don't want I want the community to understand that because it's not that obvious how much people are paying. And I maybe jump in here. I'm wondering Scott um if we could share the slide with the breakdown of residential and commercial.

What? I I I don't know the average um assessed value for businesses. Um and in so I don't have that off the top of my head. Um we just have that amount right now broken down per million in that table. And maybe I'll I'll chime in and and add Chris Mchuk, deputy city manager of uh Tara, I think part of your question is um you know the range of difference for residential property values in the city. It it's big, but it it doesn't have as big of a range as commercial property. We've got some commercial properties that that are commercial condos that are pretty small that that probably have a an assessed value under uh a million. And then we've got, you know, big giant buildings that that have an assessed value that is much greater than 1 million. So I think I I hear your point of there's a lot more variation there and understanding the true impact for commercial property is a little more complicated than than residential property.

Okay, that's it. Mark,

um I first just want to chime in and say that Terara is correct. We need to understand the actual impact, not the theoretical impact of what we're doing. And we've had this conversation before. Um, and we need to have it again and and try to get a resolution on that. As for my question, um I I don't understand why we would not pursue um the debt authorization um since it's not going to incur any taxes. It's not going to raise any taxes and we um uh we're not going to use it this year. There's going to be a lag time for that. Why would we not want to pursue it if it if it's free? Um uh and just as a quick comment, I I also support changing the definitions of the 3% um limitation on debt from assessed value to market value. And I would think that combining it with another um initiative that is not going to raise taxes um would make people a little little happier than the initiatives that do. So, can can you tell me why we wouldn't take the free one?

Yeah, Mark, I I'll I'll jump in here. Um so the thought is um when we're considering polling um hearing from the experts um there is an optimal range of three to four items um for uh polling and the general fund debt while it does um allow capacity there's no new revenue with it. So is it when we do utilize that um it it will mean offsetting reductions. So since we're already planning for reductions in 2027 um that if we were to issue debt would be additive. I do think it's something um we would like to put in the long-term comprehensive plan ahead. It is a tool we would love to have in our toolbox ahead. Uh but it is not something that um would be planned for um use over the next year or two.

Well, I I guess I'm I'm saying that the next time you'll be able to do it is 2028. And you still won't be able to use it immediately. And so you keep we keep pushing the the rock down the road. And if it's a good tool for us, I I would prefer that we use it. That that's that's all I've got. Matt, you're up next.

Appreciate that, Rob. Uh, thanks for this sobering presentation. Um, this is why alcohol use is down because we've been forced into sobriety by conversations like this. Um, I Mark's got his thumbs up. My question comes around centered on the other side of the equation. Um, I think polling is going to be exceptionally, and I'll phrase it here. I I think polling is going to be very difficult unless we're really clear and focused on how we're reducing the expenses, not just of the city. We're working on that. I know, and I know we're doing that, but specifically on our capital projects, they have been funded exceptionally high and an exceptionally high standard. And we don't live in the environment where that's an acceptable norm anymore. And so I here we are talking about all the more money we want to acrue and bring in. Where's the conversation where we're saying, "Hey, these projects that we discussing, we're going to shave 20% off them because we have to. There's there's non-essential stuff that we actually can pull out of that or tweak. We need the other side of the equation here." And so I'm just wondering where's that conversation? Where are we being clear? Aside from just regular budget stuff, which I know we'll take care of in the budget, but on our capital projects, we're asking money for capital projects. Where are we reducing the cost on those existing ones so that we are balanced and we can stay true to our community that, hey, we're asking for money, but we're also tightening on our end, too, and it isn't just additive. So I maybe I'll take that one since uh I see no rushing to the table. Um it's a hard conversation, right? And I think in the April conversation you saw that we had presented some initial some initial scenarios on um the variations low and

high of some of our facilities, right? Those are choices to be made um as that moves forward. We don't know yet what those choices um are going to be uh as we're still thinking about how do we even fund even the lowest portion of that. Um and I think polling might be helpful uh as we move forward. Um but as you know with all projects I think similar to the conversation we are having about critical service levels um that departments are looking at now what is uh the demand what can we afford um what services should be at variety of facilities um we are categorizing some of that and we will likely be coming to you all in the future to continue that conversation as um I I'm not recalling what dates there are but those are continuous conversations we have to have about what you're talking about is service level and um what amenities are what amenities are in each of our facilities, right? Those give us some services as well.

Well, I'm actually not referring to services. I'm referring to actually the actual structures themselves. And let's just take East Boulder Rec Center for example. I'm not picking on it,

but it's a massive full renewable energy upgrades. Does it have to be? Can't it be a hybrid where we focus on maybe gas but we do the hookups for electric knowing that when our electric mix becomes truly green that's when we do it and we delay that full conversion because it's a premium right now and we're actually just plugging into dirty power. So those are the things that I'm looking at is these aren't service level. These are actually structural in nature. And I'll just and I'll just add the last piece I'll add is we need we keep saying we're having conversations. That's not working for community because here we're talking about a concrete thing that's going to hit their pocketbook. That's not a conversation. That's real. Where do we have the real impact on how we're reducing? So at some point these temporally have to cross each other where we have to be clear on what our reductions are financially in order to gain the confidence of community to ask for more money.

Yeah. No, I appreciate that. And I I guess to the same conversation we've also had at East Boulder Recre is uh what is the capacity for pool or swim lanes or whatever that's going to look like, right? That is a service that then has a an infrastructure um cost to it. Joanna, maybe you can better answer the question on energy because in part two we have a code that we need to lean into.

Yep. And um apologies that Michelle Crane's not here because I know she would do even better job than I will do. Um but uh it is actually hybrid a at the East Boulder Community Center in terms of what we've been looking at. So certainly understand and and acknowledge um that we are trying to thread a needle with the expensive buildings. I mean buildings are just expensive to build. Um and also trying to address and meet all the codes that we have and the regulations that we have to uh thread that needle in the most cost-effective manner. So absolutely hear the concern and also trying to balance the fact that we are the long-term owners of the building. So we also are trying to not cut any corners so that we end up with a larger total cost of ownership in the end. So we're trying to be thoughtful. Um but I can assure you we are always uh looking at and trying to find the most cost-effective manner to approach when we are building Well, there's more to discuss here, but I appreciate the the the response we've gotten so far. Appreciate that.

Tina, you are up.

Hi. Um, so I had a question about the last option where we raise the mill levy when we have identified the projects we want to work on and do the debt. um that uh my question is is there a way to talk about it and pull it that can um talk about the timing of when those when people would start paying more on their taxes. And part of it is I'm worried a little bit on the commercial side with the um addition of the transportation maintenance fee which would theoretically be coming in July or August at the same you know and then six months later moving into a mill levy if there might be a way to time those so it doesn't it's not as impactful and and and to some and there we actually have a lot of property owners that will have to absorb those two large fe or tax at the same time.

Yeah, really appreciate that feedback. And um I do think uh that is an area that that we'd want to be really clear in the polling is that the phasing of the projects and the timing, right? Because we're not going to be able ready to break ground on $200 million worth of projects and it's going to take time to do all the prep for those projects. So I do think that's something we would want to be very clear in the polling on the on the timing and the phasing of that. Thanks. Thank you

Nicole. Yeah. Um my question is um around thinking about some of the um the mill levy expansion um and increase and this is a little bit to terra's point low-income homeowners and small profit um businesses or nonprofits are going to be um hit potentially disproportionately by any any increase we do. Is there any way of including um like some amount of that uh that ask that could be used kind of like we do with the food sales tax rebates um where where where we kind of give it back to folks who are really needing it. Um because I don't you know we we do need this this funding for very critical things like public safety and rec centers and all that. Um, and I just I wonder if there is a a way that we could um help to offset that with this same thing. And I'm just um I that is definitely something I think we can look into. Um I'm not sure if uh Chris are um would have any additional advisement there on on um from examples from other um projects and experience. Yeah, actually I I would say the same thing is I think that's an interesting thing to look into and and explore further and you know we've had that experience with uh especially like property owners that are annexing into the city that are on a fixed income um that then they need to pay for those infrastructure costs. And so we've had those conversations in the past where it wasn't necessarily their property taxes that were going up, but it was that they were going to have to make a big lump sum payment and and we were trying to figure out how to how to be able to work

with that so that it didn't mean that they felt like they had to either not get clean drinking water or sell their house or that sort of thing. So I think we could explore that further and see if there are uh some options uh around that as a way to uh be able to maybe soften the the impact or the increase. Yeah.

Uh Ryan, I think my connection might be slow. If it is, I can turn off the video. I'll keep talking unless you signal. Um okay. My question is the the the procedure forward from tonight um if you know as we go forward presumably to do pro poll testing does c do you ask for council's feedback on you know the language or the items that go into that pole testing like will that happen tonight will that happen at all how how will that work

so our um we're looking for council to provide advice adisement on which items to poll on and that's that's what we're looking for tonight and then we would work over the next uh several business days on formulating the questions in that poll. Okay. So, you're looking for that now. Okay. Then my my Oh, Teresa.

Uh yes, council member. Um there are really specific legal requirements with respect to language for the ballot measures and and the polling lies uh relies heavily upon language. And so once council provides direction about which things to poll on, the city attorney's office works on that language.

Great. And then my just quick followup question is um so we've uh you know we've got these 75 facilities and the 15 critical facilities. Um the airport has not been considered usually in that domain. Um they've been sort of separate. I I've seen a number of um questions from the community that have come in today that have asked the question could and should this polling process include consideration of of airport? And I'm just wondering if staff's given this any thought like is that something we should be giving feedback on or yeah how how do you think about potentially including the airport in that? Uh why why don't I take this one? And I I just wanted to say uh furthermore to the the deadlines and perhaps um council member um Benjamin to your questions about when we're coming back. Survey results are coming back from the polling and the fund our future results which you have not all seen yet in late June. And then later on in the summer uh likely after your uh break we will be reviewing and approving tax ballot ordinance. So we'll have some of those conversations uh at those times. Um, Council Member Shuhard, to your question about the airport, um, I will say that we have not thought about that um, as part of our uh, potential items um, to date. Uh, if that is something that council wants us to be considering or uh, you want to think about as a polling measure, um, then certainly this is a lovely night to know that.

Okay. Thanks, Thank you. Um, I'm just going to add my own uh question here. Why why did staff decide not to use the uh general fund obligation or any other uh forms of debt? I I I understand that we would be using up all the revenue um on some, but can staff help us understand what revenue conditions would create pressure on debt service and whether a stress test scenario has been modeled? I think that downside picture along the baseline forecast will strengthen the credibility with voters. So the general fund debt authority if I is is if I'm understanding your question correctly Rob the general fund debt authority itself um the general fund is a balanced fund. So if we were to issue debt that would uh we would need to put an expenditure uh an additional expenditure for repayment of the debt. So there's no new revenue coming in which would mean for any amount that we issue um and have to repay uh that would come with an offsetting service level reduction. So considering we're already planning for cuts in 2027 um the we would not plan uh to utilize any general fund debt uh in the year ahead. uh which is why it was an item that we want to consider uh moving to the long-term comprehensive plan and then um talking about that in a future year.

Okay. Um I am going to move over to the main question now seeing that we have no other clarifying questions or comments. Does council agree with staff's recommendation to explore through further analysis and polling parks and public improvement mill levy expansion an increase to provide flexibility for community needs and up to $200 million debt and associated mill levy increase for unfunded priority facility improvements and change section 97 of the charter to 3% of actual valuation of taxable property. within the city. And looks like we have a question from Tara or a comment. Go ahead, Tara.

Yeah, I just have a quick question. Um, and that is, are you going to give community members multiple options for how much property tax they'd be willing to, if any, pay in this polling? Or that's my first question. or are you going to just pick one? And then my second question is is are you going to mention the South Boulder Rec Center and the North Boulder Rec Center in the ballot measure polling or is it too early and that's years away or something some other thing because we did get a lot of questions on that from the community as well. I want them to feel like their answers they got answers to that question. So, those are my two questions before I comment on anything else.

Christa, you want me to take this one? Perfect. Um, so Tara, on your two questions, the first one in terms of like options, um, the the recommendation as we wrote it in the memo is that we would pull the $200 million debt and it would describe what, you know, average increase for uh for property tax would be. Um, we do have the option that we have done in the past with pollsters before and our our pollster has confirmed we could do what they call a split sample. So if you were interested in polling say the $200 million option and you know the 80 or the 145 or the 400 option, we could do that. So you'd get a little bit of insight from voters if they see that oh I would support one but I wouldn't support the other. So that's an option for you. And then uh the second question is um are we going to list specific projects? And as Teresa answered in a previous question um when you poll for a ballot question, you actually write a ballot question right like it would be on the ballot in November and then you get a voter reaction to it. Then you ask some further questions and then you you get a second reaction to it. So we'll have to put put specific language in there and uh that's uh for some of us our tomorrow morning is uh having that exact conversation based on the feedback of which which uh types of things you want us to pull and then we'll be quickly drafting language. So uh hopefully that helps answer that question as well. Great. Um, Nuria, I'm going to ask you when we asked this question um about these three different points of the conversation, and I'm hesitant to ask this. Is this

through a straw poll? Uh, I I would say first um perhaps we see what council members have as a conversation um before. Or it could be that we may not need a straw hole as much as we get some feedback. Um, and if there perhaps is lack of clarity, we are happy to jump in and ask for that because not we're not usually shy about that. So, okay. Thank you. Yeah, it looks like we do have a few more questions here. Go ahead, Mark.

Thank you. Um, I would be supportive of polling, possibly a split poll um on the 200 million and because of the extent of our needs, I would take a shot and see if anybody will buy into the 400 million. I tend to doubt it, but um you know, it's really dealing with the problem. Um, I'm a little reluctant to have us um poll on uh a a tax exceeding our um mil levy limitations for a uh or a project um uh that's outside of that that funding source we discussed earlier. Um uh and I'm a little concerned with raising the mill lev polling on raising the mill levy for parks and asking people to uh uh raise taxes on themselves um for the 200 or the 400 or or any of those alternatives. There's only so many taxes you can ask people to impose upon themselves in one uh voting cycle. I I think we're um we're asking for two or three and and I I think it's not a good environment for doing that. I think we should pick one. I think it should be uh one of the um the funding sources that you know the 145, 200, 400 uh and see what people say. Um, I would be happy to have uh the language change for open space and parks so that they can use their dedicated funds for maintenance. Um, but I'm not sure I I want to suggest an increase in the mill levy to our maximum and then throw more on the table. I don't think that's a formula

for success. Thank you, Nicole. Thank you. Um, so just to kind of go through this list and we're just doing number one. Is that right, Rob? That's right.

Yep. Okay. So, for that one, um, I, uh, yes to, um, polling on the the, um, parks and public improvement mill levy. Um though I personally like the the um name public safety and public places because that's what it seems to capture um with this one. So I might just think about um including public safety in as we're talking about that with um uh with the um in the polling as we're getting ready for that. Uh I agree with Mark um that I think it it would be good to do the 200 million but also the 400 million option. Um I think that we definitely do need to include in include the specific projects but right now um we have people who are talking about the public safety building who are talking about needing um updated fire stations who are talking about needing pools and updated rec centers. And if nothing else, even if the the um the people responding to the polls say, "No way in the world are we going to fund all of this. Um we can't do it right now." Um, I think that at least gives us some information so that when we are having to say sorry to um a new public safety building in the next 5 to 10 years or sorry to a new south bolder rec center in the next 5 or 10 years, we have some information to um put that forward and I think it shows respect to the community that we are giving an option for funding everything at least in this poll, right? that and if if people are not having it that's fine but I really feel like we need to give people that choice um so that it's not just us assuming that people um don't want to uh pay for extra and I think if we can find a way to include something about um

having a small percent kind of like the 1% for art but like 1% for affordability in that that we could use to help people um offset the increased cost people and small profit and nonprofit businesses. I think that would that would help too. Um so I I would love to see that pulled with those two options. Um and then the um the other one, yes, I think to to pulling the charter change. Um that does feel important and I would actually advocate for potentially pulling the general fund debt um one too, even though we don't need it yet. The community is currently aware of our financial issues in a way that I don't know will be true in two or three years because of turnover that's happening and always happens in our community. Um we have spent so much time helping educate people about this moment. I worry that that's going to pass. And even though it's a tool that we wouldn't use until the future, we could say, you know, not before January 1st, 2029 or whatever that needs to be, but this to me feels like the year to include it solely because of the package of things that we've been talking about for years now. Um I I just really worry that if we don't put that in this year, we may lose um lose the moment. So um those Oh, yeah. Okay. Yep, that was it. Thank you,

Matt.

Uh, thanks. Two things I want to um certainly echo the general fund debt authorization. I think that needs to be pulled. Um, when we have things of substance, we need to give them a long runway and give them lots of oxygen. And even if we're not going to do it, pulling it sends a signal that it's serious and it's bonafide. And even if we don't do it this year, getting some of that polling is helpful. and it allows us h to know how much work we have to do if at all to build to a coalition and consensus that it is viable by next year. So I think that's a helpful just to know where our floor is. So thanks Nicole for bringing that up. I also want to uh uh kind of go a little further than what Nicole was saying with regards to the tradeoffs in the polling. It isn't just you don't get a new public safety building or you don't get a rec center. if the if we don't get this capital funding, it's oh, the things you're currently used to getting go away. So, so we we we kind of keep getting caught in the conversation of oh the you just don't get the new thing. People are okay not getting the new thing, but people are not okay with the thing they currently have going away. And we have to communicate that. That is essential for the trade-off conversation to land appropriately. It's not hyperbole. It's just reality. And so I think that's so essential for us to make sure we do that and paint that picture accurately. Um whether it's in the polling or just our messaging. We already talking about service reductions and other things. They need to know what that is, right? Um that that needs to be painted out loud and clear so that they know the alternative. So I would just go a little further than Nicole and yes to um the general fund on the polling. Uh everything else looks great to me.

Great. Thanks, Matt. If I may Matt, I'm sorry. Do you mind council member uh council member Benjamin do you have um uh a quantity that you think would be polling whereas we think about the 200 and 400 came up there was an option about um any any combination of the three.

Oh I I mean I'm I'm kind of I think the 200 is the right sweet spot. I think 400 is is is getting way over our skis to be honest. If if we limited in how much polling, right? We haven't even talked about vacancy in polling, Matt. So, I you know, I I want to make sure we don't have this uh long uh treatise of of polling. Uh I would I would exchange a $400 million question with a general fund debt authorization question. I

appreciate that. Great, Tina. Yeah, thanks for um explaining all this and I felt like I have a better understanding with this presentation than the the one we did prior. So, I appreciate that. Um I am this is polling so we're not making decisions now where our community will ultimately be making the decision and we're just offering some ideas essentially. So, I just wanted to um reframe that for myself. Um I am going to go with uh staff's recommendation on these and um what's really important to me in this process is making sure that we can um that it will help meet our goals that we can communicate it clearly to the community and that we can engage the community as much as we can. ideally doing something similar to the school do district with the citizens bond oversight committee so that we can engage the community um in a conversation about facilities specifically long term. Um so I think building that relationship is critical. Um and then just making sure that we um can also uh start this narrative that I think will be coming out of the long-term financial five-year plan. um just a clear idea of what the maintenance schedule looks like, you know, for the next couple decades would be extremely helpful. Um so yeah, I'm good with staff's recommendation on those three points. Thanks.

Uh just following up, uh council member Mark was that um staff 2 has been thinking about a similar task force. Um it is used in other situations, other communities. We have been thinking about that as well and so appreciate um that and knowing that uh there is um alignment. All right, Ryan,

I am uh I will endorse Nicole's comments. I think I just sort of agree with everything she says. So, yes to the three um that that uh staff have brought forward. I like the consideration of of some modified language around the parks and public improvement, but just just I thought that was interesting. Um I would also add the um for just for polling, I'd like to see the 400. Um you know, I think one of the principles we've heard from finance is that the the the more we continue to defer these costs, the more expensive they will be in the future. And so, um, I think at least getting the the public to weigh in on whether, you know, we there's an interest in in having a holistic approach that will have the lowest net cost. I think I think we owe that to the public right now, especially with all this this work that we've done. So, I' I'd support that. And you know, I think there's some there's techniques to do like AB testing and, you know, really really get a, you know, between the 200 and the 400 and really get a read on um how people react to those the differences between those two things. Um and I I like the idea of um like a pretty big tent approach to um what we're asking for. And if if there's space, I would put the airport in here, too. I mean, we just we just heard that this facility has has needs and um might as well add it to um to the polling. So, leave it at that. Thanks.

Thanks, Ryan. Aaron.

Yeah. Well, um staff, thanks for all the very hard and excellent work on bringing these options forward to us. Uh there are of course many unmet needs in our facilities. Uh we hear a lot about South Rec Center. We know the public safety building needs a lot of work in replacement. So, I'm uh looking forward to seeing what the polling says about our potential for raising revenues to tackle and solve these problems. So, I would uh tend to go for pulling more things rather than fewer. So, um I would I would certainly take the staff recommendation. Um I'd probably um add in that 400 million, not because that's necessarily what we want to do, but to to judge the appetite in the community uh for the different levels of debt authorization in millise. Um, in terms of the general fund bonding, I, you know, I'm interested in that as a tool, but I am definitely hearing from you that if we were to do it short term, it would involve service reductions, um, which is not something I want to pursue right now. So, I'm I'm comfortable with the staff recommendation of continuing to put that um, investigate it and keep it in the long-term potential strategy. Um, but don't necessarily need to move forward on that right this minute. Uh, does that address all the items on the table for question number one? Uh, it does. I mean, I think uh section 97 is a uh that's a necessary poll to make these other things happen.

Yep. Uh so what I got for number one, thanks. All right, Tara. Um I'm gonna go with Alex. Just kidding. That was a reference to Jeopardy. Um 200. I feel like 400 is personally I'm not complaining. I'm not saying you're all tonedeaf, but I'm saying to me it sounds tonedeaf to both the businesses. Well, I just Let's just leave it at that. I'll go with 200. I'm not going to even talk about it. Any other questions?

No, I'll just chime in for myself. I mean I mean Nurat, did I answer? Yeah, I'm sorry. We've heard some of your colleagues talk about whether or not they wanted to add the general fund debt. And as I'm tallying uh so that we perhaps avoid a straw poll, it'd be good to know whether you have an opinion. Um what's the vote right now? No vote. Oh, that's right. That was a joke. Glad that Tina's laughing at that one. Um I don't know. I don't it's not my I abstain. Thank you.

Okay. Uh Taiisha, I just wanted to chime in on the 200 piece and am feeling comfortable about that. Um and again this is again not a criticism to our forecaster experts but not having that water information when we know that the cost of water is going to be significant and not just at the at the water bill but all of the things that are needed for water that we consume that we use. Um, and so, uh, I have concerns around the 400. Um, and I feel more comfortable with the 200. Um, any other questions for me, Nuria?

Uh, similar, Council Member Adams, if you have an opinion on whether or not you would like us to pull on the general fund debt issue or if you have no opinions, that's good to note as well. I would be open for that. Can I just uh Tisha, I'm sorry. Did you finish because I want to go back and answer her question. I did. Thank you for asking. I'm going to go with the staff recommendation on that second question now that I had a chance to think it through in one second.

Um that was the 200 million ter as well. The 200 and then that second question you asked. I believe it was the staff recommendation to not pull on. Correct. The staff recommendation to not pull that. That's what I said.

Okay. Um, not seeing any more hands. I would be open myself to pulling the 200. Well, let me just back up. pulling the staff recommendations, but I also agree that it would be interesting to see what the community's appetite is for the 400 million. Um, I understand that the general fund obligation is not creating enough revenue to pay for it and that service is cut. Um, also when we do this, I think there really needs to be some language into some uh of the things that we've spoken about before, specifically like what projects are we putting on hold, what projects are we um cutting or downsizing because there are a lot of things in the work works now and what I hear is that these things just come up and they've got so much momentum and they're almost unstoppable. So maybe there are some things that are in the queue now that we can talk to the public about that we're not going to implement and we're not going to move forward. Um, I think that would really be helpful in the polling language.

And Council Member Kaplan, do you have uh an opinion on the on the recommendation to not pull the general fund bond or to move forward with that polling? Um, I don't think that we could pull the general obligation without pulling the 400 million just for the revenue source. Am I understanding that correctly?

Uh, well slightly separate issues, right? in terms of um one is the the staff recommendation on the amount of the particular thing. The other is whether or not we we move a separate measure on the um on uh the general fund debt. I mean I always think more information is more valuable than less information. So I would support pulling that. And if I may, I don't believe we heard from council member Marquis, and I don't want to assume that we did not hear. Oh, I'm so sorry. No. Um, on that particular issue, we heard on the other. Okay.

You are muted.

How embarrassing. Um, I am good with going either way. I think my concern would be if the polling firm were to come back and say that these different iterations of very similar questions were just too difficult to get solid information out of. I just want to hear that um because I'm and I I don't want to get to a point where I think if we do different groups that's okay but um and I know the polling firm can do this but I just want to make sure that people aren't given options where there's an obvious easiest path which is you know less expensive or um and then we get polling information that doesn't show appetite for going a little further. I'm not sure if I'm being really clear, but um understanding what the polling firm might think could be helpful in this case. So, I' I'd keep an open mind on this one, which is probably not that helpful. So, my apologies.

It works. Uh and if I may, one more clarifying question to um Council Member Wallak. uh when you first started the conversation uh I have um a yes to um different options um for uh the parks and public improvement mill levy. Um we currently have been talking about 200 and 400. Is that uh correct or are No, my preference was not to raise the mill levy but to raise but to broaden the scope of uses to which those funds can be put.

Got it. if we're also going to be polling for the 200 and or the 400 and I think there's just a limit as to how many tax measures you can um and do you have a preference on um whether to poll for the 200 and 400? Uh yes, I I would poll for for both in a split poll just to see if there's any appetite. Um all you can find out is is that there is which is a surprise or there is not um in which case we put it behind us that there's no policy

um consequence to doing that polling. It's just knowledge. Um, and staff, correct me, uh, keep me honest if you will, but I believe we have direction to pull on two options and direction to include the general fund debt.

That's what I heard as well. And I'll just uh highlight real quick, Tina, I think the point that you just made, we can get some feedback from the pollster on if they have some advice on that because I think there is that potential if you've got if we're pulling on can the city borrow money and increase taxes, can the city borrow money and not increase taxes? If those are side by side, will that skew the results? And I think we can ask the pollster that question. Great. Looks like Tara has one more question before we move on to our second question.

Sorry. Um here's my question. I want to make sure that my most important thing, Nura, which is to make sure that we uh can use the permanent parks and recck fund for operations as well. That is my most important thing right now in in this moment in history. Is that going to be pulled or are we automatically doing that? Uh we have not written out language yet, but we um we believe that that is part of what will eventually come into the language.

Okay. Okay. Okay. Second question. Does council wish to proceed on further analysis and pulling a vacancy excise tax? I'm seeing some hands. Matt, uh, I'll start with uh, yes. Uh, there's clearly community interest in this. Um, but I I think it's important to just knock right off, right? I know in the presentation it was talking about commercial. Maybe we just just move that aside. That's not on the card. So, we're just talking residential vacancy tax. Um, I will say that what I'm interested in, and I think some questions were brought up to it, is I'd like us to see what a tiered uh, vacancy tax is based on square footage because I want to make sure that we don't set a number that is disproportionately harsh on those that maybe own a smaller home versus someone who owns a gigantic home. So, a tiered structure, but also raising the overall number. I think our number is one is is only a couple thousand. I'd like to see the max go up to about 5K. So max up to 5K in a tiered structure, maybe three tiers based on square footage to me seems like that's fair, reasonable, and does a combination of modify behavior while also generating revenue.

I'm going to jump down to um Teresa real quick because I think she has an answer to that question based on adorum. Um, so that's something we would need to look into the legality of. That that hasn't been presented before. Um, so thank you for raising it and um, if it's something that council overall has an interest in, uh, it would require some legal research. Sure. Yeah, I was just San Francisco does it similarly. Obviously, they're a different state, but there is some precedent for that. U, but yes,

Oh god, they're so lucky, right? No. Yeah, exactly. Appreciate it. Uh yeah. And and does that is that fall within the realm of just regular staff research or is that extra and above and beyond? Oh, go ahead. I'm sorry. If we had a a consensus by council tonight, that would be sufficient to move forward with research. Okay. Great. Nicole, may I ask a clarifying question before I give my comment? Of course.

Um my my question is um if we were to move forward with the ballot measure for the tax, is that something the amount can then only be changed by another ballot measure? Because like when when we think about fees like the transportation maintenance fee, right? That can change um as we go potentially like with the public hearing and all that stuff, but this can only be ballot measure, right? Or yeah, another ballot measure. Yes, that's accurate.

Okay. Okay. Thank you. Um, so my comment is um I'm interested in further analysis, but I actually don't think we need to pull this one. And my my reason for that is because I think seems like there's a general consensus that if this gets on the ballot, this will pass. I think it's something that most of us feel like our community is really going to vote for. Um and so in the past when we we have put things on the ballot without polling and my my um this is a pollster question if the if we are already at our you know three or four ideal number um is this going to potentially interfere with the validity of that three or four because I really don't think we need to pull this one. I think that if we pulled it, we would find that twothirds plus people are are good with this. Um maybe wrong, but I and I think we all have that sense. So So that that's it. But what I would be interested in with the analysis is the like the the flexibility of um moving with square footage, the the change in the future, like how that kind of fits with the fee versus tax. Um, and so I guess sort of interested in some additional analysis, but really just based on comparing it with a fee um, as well, not like not necessarily analysis for ballot measure. I'm just curious if there are things we can do with a tax specifically that we can't do with a fee because it just seems more flexible with the fee. Okay. Um, see Erin up next.

Yes. So I am interested in this one. Um, so and I agree with Matt that the higher number would be good like a 5K seems like a a reasonable number to investigate if we are able to do it tiered based on the size of the house or the value of the house that I think would be intriguing. So I would agree that I would like to learn if that is an option and um I mean and unless uh staff feels very strongly that that including it would destroy the validity of the rest of the poll results, I would pull on it just to get um I think we can estimate what we think the support in the community is, but I would like to get um statistically valid information about that as well. Thanks

Mark. My first comment is a question for Teresa. Um, are we better off doing this as an ordinance so that we have the flexibility of changing that ordinance if we want to raise the fees or lower the fees or change aspects of the enforcement of it. Um, rather than being uh locked into a a a an initiative where we'd have to do another initiative to to affect a change. Uh, council member, I think what I would say to you is that there's a confidential memo addressing this issue and um,

accurate there is more flexibility with fees.

Okay. um you know on the assumption I am not in favor of this but on the assumption that a majority is my suggestion would be that we we do this in a fashion that gives us the greatest flexibility to adjust it in in the future rather than locking it into stone we may find that there's a great appetite for higher fees we may decide we want to have lower fees um and I think we ought to be if that's the will of the council and the will of the community, I I you know, to to get this done, I think a a more flexible uh approach would would be beneficial to us. As for the the merits of it, um I've I've stated before that I I'm not in favor of this. I look at the the jurisdictions that have done it, and it's sort of the usual suspects, Minneapolis, Berkeley, San Francisco, Oakland, and New York. not one of those jurisdictions I regard as particularly well-governed. Um, and we're just kind of chasing after it because that's the um that's the the tax/feour. Um, and so I do not support it, but in recognition of the fact that that many people do, um, and perhaps the community as as a whole will, um, I think we should do it in a way that best serves our purposes, um, and and not be, um, hampered by an initiative.

Council member Wallik, I assume you mean not well governed now that I'm not there, right? Of course. Of course. A clarifying question for you. They were fantastically governed until it was it was they were all cities. Quick question. Are do you have an opinion on whether to poll or not poll?

Um I would poll because the polling will tell us if that's the sentiment of the community to enact a form of vacancy tax. that doesn't compel us to do it as an initiative and prohibit us from doing it as an ordinance. And so if the community sentiment is there, I mean, if it gets 30% approval, okay, then then that we know what to do with that. If it gets 80% approval, that doesn't mean we have to do it as an initiative. We can simply commit to doing it as an ordinance and serve the will of the community with greater flexibility. You know, at that at that point, the argument is over and the question is what's best in terms of uh creating a vacancy tax that the community can support and that uh uh will be beneficial.

Thank you,

Tara. I agree with Mark, but I want to say that I'm wor because I'm worried about, you guessed it, unintended consequences. And um I was reading the Bara letter, which I hope you all read. It was concerning to me. Well, let me just say that I hope that staff read it. Did you read it, staff? Yes. and that they can be a partner with us in whatever we decide to do, whether it's an ordinance or a ballot measure, because I don't want in these very fraught times the wrong thing to happen from this initiative. I'm not saying I'm for it or against it. I'm neither for it nor against it. I'm fine with the will of council, but I like the flexibility part very much of what Mark said.

May I call for just a second? Um, my apologies to Teresa, uh, our city attorney. I usually go to sleep reading those confidential memos. I cannot tell you how I missed this one. Um, it will never happen again. Glad to know that my hard work is your bedtime story. And how do you go to sleep? They're so riveting. It should keep you up all night. You're betting a thousand tonight. That's why I have bags under my eyes. I can't sleep.

Okay, I'm just going to jump in here real quick. We have another um topic that uh Chris Meschek is going to present to us. So, I just want to keep us rolling with these questions and stay on time, but this is important. Um Tina,

yeah, I support um moving forward with the vacancy tax at a higher level as indicated by Aaron and I think Matt. And then um which I think I said at the last meeting also. And if we can if the pollster thinks we can pull it because this is significantly different than the other measures. I think the other measures are going to be the issue, probably not this one, then great. But if we don't pull it, that's fine. I'm still um would like to refer it to the community and the community can ultimately decide. Um and Mark, I I have to point out the state of Utah has been doing a separate an additional tax for property owners, second homeowners since 1986. So, it's not just the usual suspects we can talk about.

Well, Utah is of course my model for good governance. So, thank you for pointing that out.

Anytime. Okay, Ryan. Yeah, I'm I'm interested in the in the policy and and and moving it onto the ballot um at a probably a higher level. Uh so I just sort of go to staff on this question of is it um are we going to um distract and hurt our chances with the other the other initiatives if we put this one on? You could you could answer that now or not. I I guess I'm kind of willing to just defer to you if you want to think about it or get feedback from the pollsters. Yeah, I might uh I I'm I'm seeing other people nod. I think getting some feedback from the pollsters might be helpful. We may be, depending on the rest of your feedback tonight, be pushing the number of items poll limit. So, if uh if there's some grace for uh for some feedback, that'd be helpful.

You have my grace. Thank you. And then I'll just uh tie it up with um I have the feeling that this would pass without pulling. I do have concerns about it. I I do believe that there are some people that are actively marketing properties that um are unsuccessful and uh need a certain dollar amount to actually make it work. Um and it would be forcing rents down. I don't think it's going to make a dent in our housing. Um, but at the same time, I don't want this to become Aspen either. Um, I just notice we still need to hear from Council Member Adams as well.

Yes. Polling. Okay. Staff, do you have everything that you need? We do.

Okay. Well, I think now we are going to move on to the uh charter amendments and I will hand this over to Chris. Thanks, Rob. And I'll uh look to Scott to pull the presentation back up. I'm going to make this section uh here pretty quick. We've got uh that was section one. We've got two more, but they're both pretty quick. So, uh, I'm going to briefly present the, uh, recommendations from the charter committee and we'll go to the next slide. There are two charter changes that the charter committee has brought forward for council to consider. The first is an amendment to section 130 of the charter which outlines the parameters of our boards and commissions. And council placed an amendment to this section on the ballot in 2024 uh, to implement some of the recommendations of the boards and commissions assessment. Um that amendment failed uh with a margin of 65 votes. Uh the charter committees brought this one forward to see if council wants to reconsider this one this year uh with maybe some language tweaks uh regarding uh especially removal provisions for board and commission members. The second charter change that was brought forward from the committee is a change to charter section 176 which is related to open space purposes uh and to consider adding wildfire mitigation as an explicit use for open space land. Uh in staff's review uh we don't believe that the charter language for open space purposes and open space land right now limits any of our wildfire resilience activities. Uh but the charter committee considers that this might be a great way to to really signal to the community the importance of wildfire mitigation. Uh so with that uh I'll make it quick and go to the next slide which is the one question we have for council uh for feedback from uh the charter committee.

All right. Looks like we have Mark up first. I supported bringing the um uh the the first matter uh before council because it's a council decision. I happen to think that it is bad timing to uh bring this back one year after it lost. Um you don't want to lose the next one. I have no particular confidence that the l that the landscape has changed other than the fact that we're going to take out the removal um language and uh I would like to be a little sure of our prospects um before going forward with that. As far as the um the wildfire recommendation, yes, there is there's an element of symbolism to it, but if you look at the purposes um for um open space uses, there is nowhere that specifically authorizes us to use it for wildfire mitigation. And I would therefore argue the fact that we have not been burdened so far with anybody obstructing that use doesn't mean we will never have that problem in the future. And so I think a one-s sentence um addition to the charter spec specifying that open space can be used for wildfire mitigation is an important sign to the community that we're taking this matter seriously. doesn't cost us a dime, but I think it's an important thing to say.

Um, Rob, can I colloqui please since I'm on the boards and commissions and I want to explain it before everybody comments and picks. Please do.

Okay. So, last year we the board and commission subcommittee wanted to reduce the amount of years that you had to be on a board of commission commission because that was in the charter that it was I believe five years. Am I wrong? Anybody who knows? Right. And then staff, no offense, added on something that I didn't think was going to be popular and it was about being able to remove people, etc., etc. And I know for a fact because I asked people why those some people didn't want it and some organizations didn't was that second part was why. Nobody's going to be against reducing the amount that you have to give your life to a boarding commission is my opinion. So, um I just want you to explain that perspective before everybody decided and while I'm on I'm going to say yes and yes to both so you don't have to call on me again. Thank

great Matt.

Thank you. Um, I I'm not I'm not entirely clear about what the changes are on that right now. So, I'd like like the removal to be honest with you. Um, so maybe I need to know a little more. Um, but but sure, I'm happy with it going on there. I just want to make sure we retain the ability to remove people for cause because we've had to do that. So, that's an essential thing for us to need maintain. Um, with regards to wildfire and section 176, I 100% support this. What's missing is the other natural disaster that we are afflicted with, which is flood. And I think it's critically important if we're going to say that open space can be used for wildfire mitigation that it should also be clear that we should also be able to use open space for flood mitigation. It would be really odd for us to pick one disaster over another when they're both and Boulder is at the top of the list in the state of Colorado for both wildfire and flood risk. Why wouldn't we just do both in one fail swoop? I know some people might have uh hangover or PTSD from from our South Boulder Creek flood mitigation project, but at the end of the day, we've moved on from that. And at the end of the day, this is about creating maximum flexibility to protect ourselves from climate disasters with both flood and fire. So, I'd like to expand it to flood, maybe poll of two. I don't know the difference or not at all. Just see it. But it makes sense to do both.

May I call with you, Matt? And I'll call after the quali. My colloqui is short. Yes. My colloqui is um would you be open to natural disaster or ecological disaster or are you feeling strongly about um articulating both flood and fire? I feel strong. I I mean I I don't know. I mean other I'm just feel like other things could happen and we would need it for that. I'm just um I'm just Yeah,

maybe I I I mean, if it's going to be so broad as natural disaster, then say nothing because I think in any natural disaster, we have the legal authority to kind of do what we need to anywhere. I think specifically with flood and fire only because those are the two that we have highest measured risk. So, we have data to support those acute needs. So, that would be my only reason to name those two. Okay. But, but so, but if there's reason to do it another way like you suggest, I could be open to that, too. No, I just I wanted to get some clarification on that. So, I appreciate it. Um, yeah, that that was it on that. That was that's the end of my quality. I have other comments, but not on on on your time. Thank you. Okay, Nicole.

Thank you. Um, on the first one, um, I think it was act it was like us that added the extra words last time, but then the the community wasn't super comfortable with. Um, but I I do that one. I'm I'm not I don't know. I like I I still think it's a really good thing to do, but the volume of things that we're talking about for this year is concerning me a little bit. And I think that the the um taxing, debating, um those measures in my view are far more important because that's what's really going to get us the the um the support we need to address these critical facilities issues and the things that community is really pressing us for um as as our buildings fail. So, I would be okay with not doing that one this year. Um, I don't think it's as urgent of a need as these other things are. Um, I do see it as a need though. So, um, you know, Tara, I really glad that, you know, board commissions keeps talking about this because I I think it is something worth doing. Um, I think here again, if if the pollsters are like, you guys, this is way too many to pull and get get good data, this would be the first one for me to go. So, that's fine. I'm not offended open to it. I'm I'm I'm okay with it. I'm not against it. I think it is something we we should have at some point. Um I I just think there are more pressing things this year. Um and I I think I was one of the people who was was suggesting that this should go on this year. So just want to note that too. Um I am comfortable with the second one um with um adding with with including this um with having it on. Um I you know Matt Matt your point is valid about the the floods as well. And Taiisha, I really liked what you were saying too about just natural disaster in general. Um largely because for me the other threat that I think about with open space is desertification um of those lands and that is I think to your point Taiisha ecological disaster um as

well. And so I I'm going to leave that to staff and open space um and and you know the charter committee that brought this forward in the first place. Um thank you. All right, Tina.

Yeah, I can go uh similar to Nicole, I can go either way on the first one. I don't think it's particularly urgent, even though it would be my preference for the change. And um and on the second, I would defer to open space about, you know, we're just sort of doing this on the fly. So, um it's great to do flood and fire. I don't want to laundry list it. Um, and I want to be specific to what the work is that they're doing. And of course, this can be changed over time as we face new challenges. So I I don't know if I have a need to to think of everything that could happen as so much could. Erin,

yes, I'm good with the first one. I do think that the problematic part of it was the removal provisions that we added. So I think with those with the removal provisions removed, I think it's worth moving forward for additional flexibility. Um, on the second one, I would not include that. I'm hearing from staff and from open space that they have the flexibility to do the work that they need to for wildfire prevention without making this change. Um, and I am concerned that adding this language um, and even more so if we added flood would cause the community to be concerned that we were going to impinge on open space um, in some certain ways. Uh we certainly saw heard an earful from the community when they felt that open space was potentially under threat with the public realm tax combination. So I would uh I would recommend and I would vote against not vote sorry give direction to not move the second one forward to the ballot. Thanks.

Good learning Teresa. Uh Taiisha.

Yes. So, um, it, you know, it's always fun to get to bring up Colorado Parks and Wildlife in two twice in one meeting, but here I am. Um, so to the second question around open space, I asked it because one of the core functions of open space includes mitigation of those things. So, I too don't think that it's necessary to add. That's why I was trying to say more generally because I or if you felt strongly like you're hearing from community, they need to see these words. It helps them to want to fund. it helps them to want to contribute. Like those are the kinds of arguments that I'm here to I'm here for and that's why I was asking that kind of question. But from a technical question, I actually I I do agree with our mayor that you know according to staff and to my experience working across the state on these issues um that that mitigation was always considered. I also think we should add the boards and commissions. I think our community wants to see more accountability, wants to um, you know, really feel like they can build rebuild trust um, with the decisions that are being made. Um, just because we're having more community engagement and and I really applaud those efforts doesn't mean that we're building the trust in the decisions that are being made and how they're being made. So, um, I also want to lift that up because this year is going to just be a very, you know, people are going to be reading every single page. people are more engaged than we've ever seen them in the civic process. And so this is a great opportunity um to be able to to add that. And in addition, this is a year like we moved over our council um elections to even year because we know more people vote. So this is the time to really get more community members and not having 20 or 30% or whatever our voting um percentages on those odd years are. So those would be my recommendations and feedback in general. Thank you.

Great. Uh Ryan, clarifying question. Is is the question to us about whether to put these items on the ballot or is it whether to poll test them? Uh this question for the charter committee items is for whether you want us to continue working on maybe drafting what uh a charter amendment could look like. If you if you have strong feelings on polling, uh we're happy to hear those. Uh but the primary question is whether you want us to keep working on them.

Okay. Um Okay, then. So, I these are these are both these are both tough. So, I think for the first one, I I like I like the work, but I I I'm think we're it's too crowded this year. So, I' Yeah, I I would I'd say no on the first one um with some um trepidation. And then on the fire one. So can you I question can you clarify um staff does this have would this have an operational effect I mean you know with the current with current you know leadership of the city would it would it really change anything um at all.

I'll maybe start and then uh uh see if others want to chime in. Dan if uh you want to chime in if I get this wrong but uh I think the short answer would be not a operational impact. We're doing our wildfire work on open space now. Uh but Dan, correct me if I got that wrong.

Yeah, can you hear me? Dan Burke, director of open space and mountain parks. So, uh the the good news is is catastrophic wildfire and our wildfire mitigation sort of has co- benefits. So catastrophic wildfire has you know pretty negative effects on our efforts to preserve our natural areas, preserve our habitats, preserves agricultural lands, uh preserve agricultural waters and uses. Uh it has negative effects on our uh ability to uh uh preserve and manage for recreational values. Those are all central uh core tenants of the charter uh purposes for open space and and preventing or mitigating risk for catastrophic wildfire um is is is helping us preserve those values. So yeah, I don't I I I I don't see an area where uh our work would change uh with additional clarification in in the charter uh calling out uh wildfire. Uh for instance, we already have uh uh fire hydrants on certain aspects of open space which supports our prescribed fire program. Um we we have sistern on open space. Um so uh you know luckily there's co- benefits of min minimizing catastrophic wildfire while also preserving all these open space charter purposes that that we're working on.

Okay. Okay. Thank you. And then um sorry just one more but this is for Chris again. So work so the question to us is is um do we want you to continue to work on these? And so I I guess I'd be I don't want to, you know, do too much more research on the fly here, but I'm interested to continue to work on these in so far as um perhaps staff responding to some of the the the new language and ideas that have come up today. Um you know, if you have a viewpoint on, you know, adding flood versus adding, you know, something even more inclusive. But also, I think Aaron makes a good point that um maybe this there are unintended consequences or this isn't necessary. So, I'm actually not sure and I'd be looking for like a staff recommendation or something more from staff if that's possible. That that' be my version of working on this if you can.

And I appreciate that and I staff, correct me if I'm wrong. I mean, I think the work on it would be to draft language for you to see um with the possibility depending on what we hear tonight whether or not we include flood. So, if that is not something you're interested in, we simply would not. The staff recommendation is not to do that. But if there is a desire to put this on the charter, that's the next step. And so we would happily draft something, I want to make sure that um Teresa's uh clear on um what that impact would be for her team. Right. So there's a legal analysis to do um as well. And so I could see a confidential memo with respect to this.

Okay. Thanks. Okay. Then I would say please continue to work on it. I I don't know how how I feel about it, but I'd like to see the work. So thank you. Okay, I think we hit everybody but myself. Um, I will I support polling the boards and commission. I wasn't here for the last time that we did it, but um it seems like a pretty straightforward question. Um, I can see like, you know, if there are absences that go on and on, I mean, there needs to be some kind of repercussion for that. That said, if it does create polar fatigue, I'm I'm happy to let that one go. Um, as far as um the wildfire, um, I noticed, you know, even in the financial forecast in their SWAT analysis, they had, um, climate in both a weakness and a threat. And I'm going to apologize already because since I was moderating this, I wrote this down just that I wouldn't forget it. But, so I'm going to read, as we all know, Boulder sits at the edge of a wild land that does not negotiate. The Marshall fire was a clear example of this. And while we've done meaningful work since defensible space requirements, undergrounding fuel management, there remains a gap in our foundational legal structure that we have the opportunity to address. Charter 176 governs how we use our open space. Right now, fire mitigation is not explicitly named as a permitted purpose. staff tells us nothing is currently blocked and I believe them. But the charter is not written for today. It's written for the moment of crisis we haven't faced yet. The legal challenges we haven't encountered yet and the mitigation tools we haven't invented yet. The cost of including this in community polling is

minimal. What we gain is something essential. What we we learn whether Boulder residents see open space the way I believe they do, not just as a place to recreate and conserve, but as a living buffer that protects the homes and the neighbors behind it, the neighborhoods behind it. This amendment does something simple and powerful. It makes explicit that protecting our built environment from wildfire is not an incidental to what open space is for. It's part of what open space is for. before we decide whether this belongs on the November ballot, I think we should ask the community. Um, so this is very forwardlooking for me and I know that there are some legal ramifications. I understand, but um I would I would vote for that inclusion.

Wonderful. Well, as I um see your direction, we uh do not have uh enough interest to move forward the boards and commissions um change for this year. Uh although there seems to be some interest for some future year. Um we do have direction to uh do continued work on uh wildfire and inclusion of that. um we did not hear from enough uh folks to um move forward polling on this matter. So I will defer to Teresa to uh work on a research and we will get back to you.

And we have one last item,

one final section back to Scott. Thank you, Scott. So, we'll um just jump in here. This is intended to provide an overview of uh community sponsored city petitions as well as state and region potential ballot measures. So, we do have currently one community sponsored city petition. Uh this is included in your council packet. It is for commercial and residential vacancy tax and on the state and region potential 2026 ballot measures. Right now, Boulder County, Boulder, Boulder Valley School District, those are to be determined because of timing. Uh we did not have um official items for their ballot measures. And you'll see here and included in your packet and to include links um each of the state of Colorado uh potential ballot measures with uh tax uh potential tax impact. I won't go into detail unless you have questions. We do have I think Heather here online too to help uh support some questions if you have on the state of Colorado ballot measures. And and note as well, I know that the evening is late, um but we will be pling a legislative update in June. Uh if there is additional information.

All right, if there are no questions there, uh this concludes our presentation for the evening. And Erin has his hand up. Kristen, I'm sorry. Oh, sorry. Thank you. I just wanted to say um yeah, sorry Rob, thanks uh for calling on me. Um yeah, I didn't want to ask questions or talk any of that over now, but I did want to flag that I am very concerned about some of those ballot measures and I would like for us to discuss taking a position on them at a council meeting in the future. Uh but that'll be subject to a future CEC request and hopefully CC will be willing to schedule that. I'd like to like to see us take positions on several of those.

Okay. Um well, with no other items on tonight's agenda, I will close this meeting at 9:23. Thank you everybody. Appreciate all the work everybody's done. Thanks for getting us done in time.