Boulder Council reviews 2026 recommended budget to close $7.5 million general‑fund gap

City of Boulder staff presented a balanced 2026 recommended budget at a council study session, laying out a package of program reductions, service realignments, proposed new fees and capital investments intended to close an identified $7,500,000 shortfall in the general fund. The presentation outlined $507.2 million in total projected revenues for 2026 and a six‑year capital improvement program that staff estimate will total roughly $789.5 million. Council did not take formal action tonight; staff said the budget ordinance and related special‑district resolutions will come to first reading and public hearing Oct. 9 and to second reading and adoption Oct. 23.

The recommended budget responds to “flattening” revenues — notably a small decline in sales and use tax and slower reassessment growth in property tax — and to state legislative changes staff said reduced some revenue streams. “The budget before you, as proposed, is balanced,” Krista Morrison, chief financial officer, told council. Charlotte Husky, the city’s budget officer, summarized staff’s forecast and direction: staff identified a $7,500,000 general‑fund shortfall during 2026 development and asked all 18 departments to propose 5% reduction strategies and program realignments so decision‑makers could consider options across the organization.

Why it matters: General fund shortfalls can force cuts to core services or require new revenue sources. The staff package mixes ongoing and one‑time reductions with a small number of enhancements and relies on a combination of restricted and discretionary funds, proposed new fees and potential ballot measures to maintain services and capital programs.

Staff highlighted the major revenue and policy elements driving the plan. Sales and use tax, which staff said comprises 35% of city revenues, is forecast to decline 0.3% year over year in 2026; property tax (about 12% of revenues) is projected up 3.1% year over year but at the lowest reassessment growth since 2011, which lowered baseline projections. Other forecast changes called out in the presentation included a projected 30% increase in affordable‑housing cash‑in‑lieu revenue (driven by projects in the pipeline), a 32% decrease in intergovernmental revenues driven by timing of Colorado Department of Transportation grants, a 6.7% decline in utility franchise fees tied to lower natural gas usage, and a 69% ongoing decline (about $405,000) in state shared marijuana revenue tied to recent state legislation. Husky told council staff continue to monitor federal funding and had not received any notifications of federal funding cancellations.

To shore up the general fund, staff proposed a mix of reductions, realignments and a small number of revenue measures and fees incorporated into the recommended budget assumptions. Those revenue items included a proposed transportation maintenance fee (estimated at $2,250,000), a modest $0.50 hourly increase in on‑street and garage parking fees (estimated $800,000), speed‑on‑green camera enforcement tied to traffic‑safety goals (estimated $2,600,000), and a proposed single‑family housing expansion impact fee (estimated $400,000, $15 per square foot for significant expansions). Charlotte Husky emphasized that some of those proposals will come to council as separate policy items for full consideration.

Council members extensively questioned staff about tradeoffs and contingencies. Several members asked about the effect on core services if proposed fees or future ballot measures do not pass and were told that any council amendment would need an identified offset. Staff asked council members to submit any proposed substantive changes and offsets by Oct. 6 to be considered before the Oct. 9 first reading.

On service changes, staff described program realignments and a small number of reductions. Scott Carpenter, principal budget analyst, said behavioral health response staffing would be reorganized: the Community Assistance, Response, and Engagement (CARE) program will be reduced in scope and three FTEs identified for elimination, while remaining resources (about four FTEs) would be restructured into a cross‑functional behavioral‑health response team. Carpenter said the data used to redesign the model showed the department’s clinicians and case managers accompanied officers when conditions required and that behavioral‑health calls had increased; he noted the reorganized approach aimed to maintain flexible non‑police response when appropriate. For homeless services, staff proposed removing BHARE (Boulder Targeted Homeless Engagement and Referral Effort) city funding so nonprofit partners could continue targeted outreach, shifting some support to the Building Home program and using a one‑time balance from the eviction prevention and rental assistance fund to support retention services.

Capital highlights in the staff presentation included $113.3 million in new 2026 appropriations (staff said 115 projects are expected in 2026 and 173 projects across the six‑year CIP). Major projects singled out included the Western City Campus consolidation (operations and customer service efficiencies; remaining capital was previously authorized), a $25 million replacement of Fire Station 2 (construction start 2026, opening 2027), a Civic Area Phase 2 park renovation (planned 2026 appropriation $3.5 million; total project budget $18 million), downtown garage renovations paid from downtown district funds, Pearl Street Mall refresh ($3 million in 2026), and multimillion‑dollar water transmission and storage investments staff cited as necessary to modernize aging infrastructure.

Staff also described the long‑term financial strategy that council placed as a top priority in 2024 and noted plans for a CCRS (Community Culture, Resilience and Safety) ballot measure this November that would propose a 0.3 permanent extension of the existing CCRS tax and expanded debt capacity; staff said CCRS revenues are proposed to support some CCRS capital projects and community nonprofit grants (90% city projects, 10% grants) and that debt issuances related to CCRS projects are planned for 2026–2027. Charlotte Husky and Krista Morrison credited multiyear planning, prior long‑term strategy work and prior commission recommendations for placing the city in a comparatively stronger position than many peers.

Council members representing a range of views praised staff work and pressed for more detail in several areas: clarity on which grants and programs are competitive versus non‑competitive; the proposed single‑family expansion fee’s implementation and how the city would proceed if the fee does not get council approval; outreach and business impacts tied to the transportation maintenance fee; and the ongoing status of pilot programs such as Elevate Boulder, which staff said is in its final cohort year with a final evaluation report forthcoming. Several council members asked staff to produce clearer, publicly accessible presentation materials and to publish hotline responses before the Oct. 9 hearing.

No motions or votes were taken during the study session. Staff said they will return with the budget ordinances and special‑district resolutions for first reading and a public hearing Oct. 9, with a second reading and adoption planned Oct. 23.