Boulder staff present balanced 2026 budget to close $7.5 million general fund gap; council debates fees, cuts and capital plan

City of Boulder staff presented a balanced recommended budget for fiscal 2026 during a council study session, telling the City Council the package closes an identified $7,500,000 shortfall in the general fund through a mix of department reductions, program realignments and proposed revenue measures. Staff also described a six‑year capital improvement program that includes new appropriations for 2026 and multiyear projects such as the Western City Campus and replacement of Fire Station 2.

Why it matters: Boulder officials said the budget aims to protect core services and staff while aligning resources with the city’s Sustainability, Equity and Resilience framework. Council members probed proposed fee increases, potential service impacts from staff reductions and the city’s reliance on restricted revenue streams and ballot measures for longer‑term stability.

Staff presentation and financial context City Manager Nuria Rivera VanderMeij and Chief Financial Officer Krista Morrison framed the 2026 package as a difficult but balanced set of choices. Morrison said, “The budget before you as proposed is balanced.” Budget Officer Charlotte Husky said staff identified a $7,500,000 general fund shortfall during 2026 development and that the recommended total citywide revenues for 2026 are projected at $507,200,000 (a modest 3% year‑over‑year increase).

Staff explained the shortfall reflects flattening sales and use tax receipts, changes from recent state legislation affecting property and marijuana shared revenues, and reduced intergovernmental grant timing. Sales and use tax comprises roughly 35% of city revenues while property tax is about 12%, staff said; sales tax forecasts show near‑term flattening with a modest uptick beginning in 2027.

How the shortfall was addressed Staff described a multifaceted approach: departments across the organization were asked to develop potential 5% reduction strategies so leadership could consider tradeoffs. The recommended budget uses reductions, realignments and a small number of enhancements to preserve priority services. Examples described by staff include:

- Behavioral health reorganization: Staff propose reducing the Community Assistance Response and Engagement (CARE) program staffing and realigning remaining clinicians and case managers into a cross‑functional behavioral health response team. Scott Carpenter summarized program performance data used for the change and said clinicians “will be accompanied by a police officer when conditions require, but have the option to respond with other behavioral health staff when an officer is not needed.”

- Homelessness and human services adjustments: The recommendation removes city funding for the Boulder Targeted Homeless Engagement and Referral Effort ("Be There") with an expectation other nonprofit partners can continue similar work, reallocates remaining state DOLA grant funds to shelter navigation, and proposes one‑time use of $275,000 from an eviction prevention and rental assistance fund to support the Building Home program.

- Operations and service trims: Examples include a proposed one‑time custodial reduction ($59,000) that reduces cleaning from five to three days per week for some city offices and a $59,000 proposed reduction to park‑to‑park shuttle operations (changing frequency from every 15 to every 30 minutes and removing two low‑usage satellite lots).

Capital program and projects Staff presented the six‑year capital improvement program (CIP) for 2026–2031. Key figures and projects discussed include:

- 2026 new appropriations of $113,300,000 and an overall six‑year CIP plan totaling $789,500,000 supporting about 173 projects.

- Western City Campus: Consolidation of city offices, scheduled to open in 2027; staff noted remaining project funding was previously authorized by council.

- Fire Station 2 replacement (estimated $25,000,000) with construction starting in 2026 and opening targeted for 2027.

- Water transmission improvements (projected $46,600,000 across the program) including pipeline replacements and rehabilitation of the historic Chautauqua water storage tank.

- Civic Area Phase 2, Pearl Street Mall refresh and ongoing investments in wildfire mitigation and open space maintenance were also highlighted.

Proposed new and adjusted revenues To increase revenue stability and diversify funding, the recommended budget includes several proposed revenue measures and fee changes, which staff said are incorporated into the 2026 projections but will require policy decisions or ordinance action before implementation:

- Transportation maintenance fee: projected to raise $2,250,000 to support transportation maintenance (roads, sidewalks, bridges); staff said the city completed a fee study and is conducting stakeholder outreach ahead of an anticipated ordinance consideration.

- Parking fee adjustments: an estimated $800,000 in additional revenue from a $0.50 hourly increase in on‑street and garage parking aligned with the city’s performance‑based pricing model.

- Speed on green (photo enforcement) revenue: projected at $2,600,000 in 2026 consistent with Vision Zero traffic safety goals.

- Single‑family housing expansion impact fee: projected revenue of $400,000 in 2026 based on a proposed $15 per square‑foot fee for significant expansions; staff noted a separate policy item will come back to council for formal consideration later in October/November.

Staff emphasized that projected revenue from any fee or new charge will only materialize after council policy approval and, in some cases, after implementation timelines that push revenue into later months or years.

Council concerns, questions and next steps Council members asked detailed questions about several items: the distributional impacts of new fees on small businesses and residents, the potential operational impacts of staffing reductions (for example, two vacant FTE reductions in the safe and managed public spaces program), the future of pilot programs such as Elevate Boulder, and how the city coordinates with Boulder County on human services.

Council received several timeline and procedural clarifications from staff: the first reading and public hearing on the 2026 budget is scheduled for October 9, 2025; staff asked council members to submit any proposed substantive changes with identified offsets by October 6 via hotline; and the second reading, public hearing and adoption are scheduled for October 23, 2025. Staff also said a standalone policy item on the single‑family expansion fee will be scheduled for council consideration (staff mentioned October 23 and subsequent council meetings).

Direct quotes from staff - City Manager Nuria Rivera VanderMeij: “This budget, barring the pandemic, is truthfully the hardest budget I’ve ever worked on in my professional career.”

- Krista Morrison, chief financial officer: “The budget before you as proposed is balanced.”

- Scott Carpenter, principal budget analyst (on behavioral health staffing): clinicians “will be accompanied by a police officer when conditions require, but have the option to respond with other behavioral health staff when an officer is not needed.”

Closing and follow up Council did not take any budget amendments at the study session; staff asked council members to forward any substantive amendments with offsets by the October 6 deadline so staff can prepare ordinance language and financial adjustments before the first reading and public hearing on October 9. Staff committed to ongoing outreach about the transportation maintenance fee and to returning with detailed policy items for fees that require council approval.

Ending note: staff and council framed the 2026 package as an effort to preserve essential services and staff while using targeted reductions and new revenue strategies to stabilize the budget in the face of flattened major revenues and evolving state and federal funding landscapes. The recommended budget includes both one‑time and ongoing adjustments and relies in part on future council decisions about proposed fees and ballot measures.