Budget draft with FAQ

The city’s fiscal year runs in tandem with the calendar year (January 1 to December 31). The budget development timeline is established by the City of Boulder Charter and the process is designed to allow for early and active City Council participation with an emphasis on public input. Although the budget is developed throughout the year, the majority of the effort occurs between February and October, with the budget for the coming fiscal year adopted December 1 per the City Charter.

Once the budget is adopted, departments are given full spending authority for their budgets within the parameters of the city’s policy guidelines. In years where new initiatives are launched and other unique circumstances become apparent after annual budget approval, additional adjustments to the base may be brought forward for council consideration.

The Charter requires that the City Manager submit an annual Proposed Budget to the City Council no less than 60 days prior to the beginning of each fiscal year.

The City Charter requires the City Manager to present an annual Proposed Budget to the City Council no less than three months prior to the end of each fiscal year. The Proposed Budget outlines the recommended spending plan and revenue estimates for the coming fiscal year.

The annual budget (also called Approved Budget) is a City Council approved spending plan for use of the city’s funding sources. The plan is a ‘living" document that guides the allocation of funds for certain purposes and is revised and adjusted throughout the year through adjustments to the base processes. The City Charter requires that the City Council approve a balanced budget for the following fiscal year by December 1.

Boulder’s Capital Improvement Program (CIP) is a comprehensive plan for capital investment in maintaining and enhancing public infrastructure, ensuring the city continues to provide a high level of municipal services. The 2020 Draft CIP calls for total spending of $85.6 million in 2020, with approximately $564.9 million projected from 2020 to 2025 on projects or categories of funding for ongoing city needs

The city owns and maintains 385 buildings and structures (including three recreation centers, five library facilities, eight fire stations, and five parking structures), 1,800 acres of parkland, 71.2K acres of Open Space and Mountain Parks, 305 centerline miles of streets, 159 centerline miles of bike facilities, 80 underpasses, two water treatment facilities, one wastewater treatment facility, 11 dams and over 800 miles of water and wastewater piping.

The city funds the construction and maintenance of these assets using a wide range of sources, including tax revenues, bond proceeds, and fees, and continues to look for ways to leverage its funding, through federal, state, and local grants and reimbursements, to maximize funding for capital projects.

Over the past ten years, the operating budget has increased 43%. The operating budget is roughly two-thirds of the annual budget any given year. In that same time period, the capital budget has increased 184%. This is largely attributed to new revenue sources being approved by the voters that are dedicated to capital, namely the 2011 capital bond, and the 2014 and 2017 Community, Culture, and Safety Tax ballot.

The total approved 2023 annual budget is $515.4 million.

The city receives revenues from many different sources. Most of them have restrictions on how they can be used. For example, monies received through Wastewater Fees must be used to operate and maintain the city’s wastewater system. The City of Boulder uses funds to budget, as well as to report on its financial position and the results of its operations. Fund accounting is used to demonstrate legal compliance and to aid in financial management by segregating transactions related to certain government functions or activities. Funds are classified into three categories: governmental, proprietary, and fiduciary.

Some city revenue has “strings attached.” This revenue can only be spent for specific purposes, which were decided by either the voters, city, state and federal law, and sometimes by legal agreements.

The budget must show this restricted revenue and how it will be spent. City financial reports during the year must also show how the restricted revenue was actually spent, to demonstrate that the city has complied with the law.

The largest fund in the city is the General Fund. The General Fund accounts for revenues and expenditures used to carry out basic governmental activities of the city such as public safety, human services, legal services, administrative services, and others not required to be accounted for in another fund. All other funds have varying degrees of restrictions for their use and are therefore less flexible in their ability to shift dollars.

The largest source of General Fund revenue for the city is taxes, which comprise over 83% of the total revenue in the General Fund. Tax revenue primarily consists of Property Tax, Sales Tax, and other taxes such as Accommodation-Admission Taxes, Franchise Taxes, Specific Ownership, and Tobacco Tax.

Total General Fund expenditures for 2020 are $161.5 million, including $3.65 million in dedicated funds to support the creation of a General Fund Capital Improvement Program for General Fund-supported departments (e.g., Police, Fire and Innovation & Technology).

An Enterprise Fund is a government facility or service that is self-supporting through the fees associated with operating that particular service. The city currently has six Enterprise Funds (Downtown Commercial District, University Hill Commercial District, Boulder Junction Access General Improvement District, Storm/Flood Management Utility, Wastewater Utility, and Water Utility).

Special Revenue Funds are established to account for the proceeds of specific revenue sources (other than special assessments, pension trusts, proprietary fund operations, and revenues received for major capital projects) that are legally restricted for specific purposes.

The city’s sales and use tax rate is 3.86%.

The number of authorized Full-Time Equivalent (FTE) positions for 2023 is 1,540.09. Some positions are required to work fewer than the standard number of working hours and days; therefore, the total number of positions in the city is not a whole number.

The property tax assessment process is managed by Boulder County and generates tax revenues that pay for schools, roads, public safety, and other public services. These revenues are distributed to taxing entities within the county, including the City of Boulder. The majority of property taxes is allocated to schools (56%) and county services (28%) followed by the city and special districts. About 14% of your property tax bill is available to support services the city offers. For every dollar of property taxes collected in Boulder, the city receives 14 cents. Of these 14 cents, nine cents go to general city operations, two cents go to general public safety, one cent goes to Parks and Recreation, and about one cent goes to the Community Housing Assistance Program.

For more on property tax calculations, visit the Boulder County Website.

Sales and use taxes comprise 41% percent of the city’s total revenues. This category includes: retail sales taxes, business/consumer taxes, utility revenues, construction use taxes, and motor vehicle use taxes.

For every retail tax dollar collected in Boulder, the city retains 44 cents, which is distributed across the city’s General Fund, Open Space Fund, Transportation Fund, .25 Cent Sales Tax Fund (which supports Parks and Recreation), and the Community, Culture, and Safety Capital Tax.

The budget cannot be solely about providing public services to improve quality of life in the budget year, but also planning for improvements in the future. The budget addresses community needs and priorities within the context of the current and projected economic climate.

The city’s long-term planning is most evident in the budget through its Six-Year Capital Improvement Plan. This plan presents the city’s assumptions about the revenue over the next six years and how city leaders propose to spend it. The highest expenditures are for large projects, such as roads, new sewer lines, and parks. Long-term plans to upgrade or maintain certain city assets are included too, such as resurfacing streets, improving traffic controls, or keeping sewer plants operating in compliance with legal requirements. Some future city initiatives are not always clear in the budget year, but money is allocated for them in a general manner in the plans, based on experience, with the goal of improving the city’s economy and well-being.

The operating budget is designed to provide funding for all ongoing city operations, as well as one-time, non-capital projects and work efforts, and to provide general support of the city and council work plan. The city prioritizes its operating budget resource allocation both across and within funds, providing capacity to respond to emerging and unanticipated needs, and in support of building resilience as an organization.

The city, like most responsible people and organizations, has a “rainy day fund,” or money set aside to help the city continue to provide services and fulfill commitments when revenue is not adequate during a short period of time. Each fund has different reserve requirements and can be found in the annual budget book.

General Fund reserves are 19.5% of total operating budget in 2020. This translates to about 2.5 months of primary operating costs the city is required to keep on hand to assist in times of financial crisis. Having reserves provides more financial stability and creates greater confidence among the public and City lenders.

State law and good business practices require the city to balance its budget. city expenditures should not exceed city revenue and funds on hand. Additionally, the City of Boulder prides itself in only spending one-time dollars on one-time expenditures.

Responsible financial management requires city leaders to consider all potential risks for two reasons: to prevent the city from committing future funds it may not have, and to guide them in adopting a fiscally responsible budget or plan that is not based on overly optimistic assumptions – revenue higher or expenditures lower than expected.

Staff continually compare actual events to the budget plan and make adjustments when necessary. During the year, financial reports are provided to city leaders and the public that compare the budget to actual values and provide information to help city leaders make decisions about possible changes in services and costs. Additionally, there are two forms times a year when the City Council can make budget adjustments.

The City Council holds study sessions on the Proposed Budget in August and September and public hearings in October. Below is a high-level summary of different opportunities to engage in the budget process throughout the year.