Thread by @shayshinecastle

Next: Taxes (kind of). It's mostly about the city's many, many unfunded capital projects ($300M+ worth) and how to pay for them. Presentation here: www-static.bouldercolorado.gov/docs/CCS_Capit…

But taxes come in bc the Community, Culture, Safety Tax —
approved in 2014, extended in 2017 — is expiring this year. Staff recommending put another extension on the ballot, for a minimum of 10 years.

A little background:
The CCS has its roots in the 2011 Capital Investment Strategy, which ID’d $700M in unfunded needs

First initiative to close the gap was $49M Capital Improvement Bond for 100 projects.

Then came the CCS, a 0.3 cent sales tax which raised $27M from 2014-2017 for 13 projects
An extension 2017-2021 raised $42M
$31M for city projects, $7.9M for community nonprofit projects, provided organizations raised matching funds

CCS Projects:
Broadband Debt Service; Enterprise Data Warehouse; Human Resource Information System; Financial ERP Replacement; Hogan Pancost Purchase Payments; Pavilion Renovation Debt Service; Facilities Maintenance Fire Station 3

Ongoing ones can be found here: bouldercolorado.gov/pages/communit…

Throwing it even further back, CFO Cheryl Pattelli touching on the Blue Ribbon Commission, established in 2006 for long-term look at finances. (Kind of what the city is doing now)

Important actions spurred by the BRC:
2009 – permanent renewal of the 0.38 percent tax, undedicated
2010 – permanent renewal of the 0.15 percent tax, undedicated
2013 – permanent renewal of the 0.33 percent Open Space tax, with phased out dedication of 0.23 of the 0.33% tax

Also 2013 – 20-year renewal of the 0.15 percent Open Space tax, dedicated to Transportation for the first ten years and undedicated for the last ten years

What does dedicated vs. undedicated mean? Dedicated = legally tied to certain dept, programs, projects.

Undedicated = More flexible $$ that can be moved around.

The BRC recommended longer or permanent taxes that were NOT dedicated; that is, they had flexibility built in. Currently, more than 60% of the city's budget is dedicated. Read more about that here: boulderbeat.news/2020/06/13/sil…

The BRC was re-convened in 2009. This time, they tackled changes to the budgeting process itself:

1. Matching ongoing revenues with ongoing expenditures and one-time revenues with one-time expenditures.

2. Maintaining adequate reserves in each fund to mitigate the effects of economic downturns and natural disasters.

3. Employing different capital financing methods for different situations (pay-as- you-go , bonding, certificates of participation and public-private partnerships.

4. Earmarking funds only for capital purchases and construction, if possible.

So that's how we got to the budgeting process we have today. I know, kinda boring and intense, but so, so important.

In addition to the CCS renewal, here are some other taxes that might be up for votes soon:
CAP Tax expiring in 2023
0.15% sales/use tax expiring in 2024
Library district
Possible sales/use tax for homeless services
County tax for affordable housing/transportation

That last one will likely be 2022, Pattelli says. It was supposed to be last year but COVID happened.

Couple definitions:
CAP Tax = “Tax on energy usage that generates approximately $1.7 million annually and is dedicated to funding climate initiatives”

Sales/use tax = “a 0.15% increment in sales and use tax that goes directly to the General Fund is set to expire representing a $5 million impact on un-dedicated city funding.”

Boulder's sales/use tax rate is the highest on the Front Range. (Although the city's share of that is the second-highest, behind Broomfield)

So, if the CCS is renewed, what will it be used for? There's a WHOLE LIST that I will publish online; I'm not going to thread them all bc it's A LOT.

But it's $307M and includes things like moving/rebuilding 3 fire stations for an estimated $35 million EACH. Also three bomb robots (small, medium and large) and also quite a few tech/software systems.

$88M (30%) of needs are for “current funding” level of master plans — intended to work within existing budget amid stable or slightly declining revenue

$186M (63%) are “action level” — “the “next step” of service or facility expansion”

$20M (7%) are “vision level” — in line with what the community wants but kind of aspirational

$172M (59%) are Essential — “critical to health and safety and whose funding levels have significant and immediate impact to the city’s basic operations and functioning or established legal mandates.”

$122M (41%) Important — “valued by the community and created by the legislative action of City Council and whose funding levels have material impacts to the city’s basic operations and functioning.”

$64,000 (<1%) are Helpful — “enhance and advance desired community values but whose funding levels do not have significant impact to the city’s basic operations and functioning”

None are Amenity — “may be complementary and possibly duplicative of services already offered by another government agency or non- governmental organization and may serve limited purposes or specialized interest.”

BTW, all those categories — Essential, Important, Helpful, Amenity — are part of the city's new "Budgeting for Resilience" strategy, an attempt to prioritize spending in the face of slowing sales tax revenue.

Timing of all these unfunded needs:
$66M (22%) are Immediate — ASAP, within 2 years
$144M (49%) are Intermediate — 2-7 years
$84M (29%) are Long-term — 7 years or longer

Pattelli: “Even if we did this tax for 20 years, we would not be able to cover all our unfunded needs. This need is just something that will most likely grow over time as well.”

Wallach: We would prefer council do a 15 or 20-year extension. Deferring capital maintenance only leads to higher costs down the line.

Staff/ finance subcommittee also recommending a ballot question that asks voters for authority to issue debt.

There was some really great info on the city's debt obligations in the packet.

Outstanding debt: $118M
Actual value: $35.7B
That gives Boulder a debt to actual value ratio of 0.33%; anything under 0.75% is considered very strong (according to Moody's)

The city often issues Certificates of Participation to fund projects, a type of debt financing. City buildings are used as collateral.

There are two COPs outstanding on four city properties
East Boulder Community Center (through 2029 - $9.9M)
Public Safety/police HQ (through 2036 - $15.6M)
Atrium (through 2026 - $2.5M)
Municipal Building (through 2034 - $7.5M)

The ability to issue more COPs is limited because of a dearth of buildings to be used for collateral.

"It was very difficult to match eligible properties to use as collateral” in 2019, staff wrote.

I'll have more info on that in the story (I love all this data!); I don't want to overwhelm you in the thread.

Brockett: Are you imagining that the tax renewal would have any specific projects built into it? Or would it just establish a process for projects to be ID'd in the future?

Wallach: I would personally like to ID a couple projects and then establish a process for future projects to qualify for funding, to be authorized by city council.

Wallach Sigh-O-Meter: 1

It was a heavy 1 though

That was in response to a Weaver q: What about asking voters to issue debt? Is the intent to repay it using revenue from this tax...?

Wallach's answer was kind of hard to follow, but the basic is that they haven't decided all the details yet.

Will keep working on it.

Friend asks about how much of the tax would be dedicated, and if that's the best idea.

Wallach: "I think what we're trying to do is create a mechanism for *council* to (make) ... their ultimate judgement."

It would be dedicated to unfunded capital projects, which is a big umbrella, Wallach explains, but council could decide what those are.

"It's not programmatic," it's not for operating costs, Wallach says. It's for "more boring" capital needs.

Young: "All of these projects don't have dedicated funding." That's why they're falling behind "which is the problem with dedicated funds."

Much mention of the golf course, which got $6M in the 2021 budget to replace bathroom/dining facilities destroyed in the 2013 floods, to the consternation of many.

Great timing, as today I wrote the script for my video series Reader 101, and the golf course is the first example I use to demonstrate why you can't just read the headlines.... you gotta understand the context.

It's gonna be good.

Friend: If the ballot language is going to say this is for capital funds, why are we further restricting this by saying 90% will be dedicated to city projects?

Meschuk: There is flexibility, but that 90% language is because the first CCS tax also included $$ for community projects (like the Boulder Museum redo, Dairy Arts Center, etc.)

Wallach Sigh-O-Meter: 1.25

It was more of a huff, but I'm counting it.

Wallach: We want it to be as flexible as possible for future councils, especially if this is a 20-year tax.

Some talk about the community part of the CCS. Council doesn't want to be too restrictive in which orgs/projects get those, for the same reason.

Young: In the past, having "shovel-ready" projects has led to bigger organizations being favored more, bc they have more ability to plan comprehensively.

I really wish I could see all the council members RN but the presentation is in the way

Ahh, Brocket made the same point and it is now fixed. You love to see it.

All council members are here; Swetlik and his backlit couch, Nagle and her prairie dog background.

Brockett: I'm not sure we want to "lock ourselves down" by saying 90% of the tax will be used for city projects and the rest for the community. Let's give this and future councils "more latitude."

Weaver: "I think we should talk about what the number is ... but that doesn't bind us in any way to a certain distribution, I do not believe." This sets our intention.

"We do have some major, unfunded city infrastructure needs," Weaver says. "Idk that there's a right number for tonight." Suggests 85%/15% split but "these are guidelines."

Erin Poe — GREAT name — from the city attorney's office says the text needs to be carefully crafted. "We'd have to really watch our language."

Idk why I like the name Erin Poe so much, but it's just, like, perfect.

Wallach: "Unlimited discretion will ultimately need to more and more money going to community projects than to unsexy, unnoticed, underground capital infrastructure projects. That's always the temptation."

"One is visible. One is necessary but not visible. i would urge us not to open the door too wide" to shifting of funds."

Young: One of the reasons we're here is because of the "steady drip" of public feedback on potholes in roads, parks and medians that aren't maintained, etc.

They are unsexy, Young says, but "without them, we don't have a city."

Yates talking. He was pretty instrumental in the first CCS and getting some funds for the Boulder Museum to move.

In fact, their fancy new building is where he and I did his re-election interview in 2019. It was 3 hours long.

Weaver: "One of the key functions of city gov't is to make sure the key infrastructure works and is robust for a long time."

Weaver: "I have a strong preference that we look at a 10-year tax. It is really hard to see more than 10 years forward."

"I do understand why a longer tax is helpful, but for me 20 (years) is getting pretty far out."

Yates concurs: It becomes very challenging to see out more than 10 years. Yes, 10 years only funds 39% of the projects we're looking at now (and with current cost estimates that will only increase) but we can go back to voters in 10 years.

"I do think it is important to voter trust to have very specific projects identified," he says.

Brockett: Are we planning on a poll of the community at all?
Young: Either polling or a statistically valid survey. One or the other.

Ok, that's all for this one.

@threadreaderapp please unroll.