Background
In March 2025, Boulder enacted an emergency ordinance authorizing its Stormwater and Flood Management Utility Enterprise to issue $66 million in revenue bonds for the first phase of a South Boulder Creek flood-management project, including a dam and spillway. The bonds would be repaid from Boulder’s existing Stormwater and Flood Management Fee, billed to water and sewer customers.
Save South Boulder and individual plaintiffs sued, alleging that the charge was really a tax requiring voter approval under Colorado’s Taxpayer’s Bill of Rights (TABOR), that the stormwater utility was not a TABOR enterprise, and that Boulder improperly invoked its emergency-ordinance procedure. The district court granted summary judgment to Boulder.
The Court’s Holding
The Colorado Court of Appeals affirmed. Ordinance 8690 did not itself impose a new charge; it authorized bonds backed by the preexisting stormwater fee. Applying the TABOR fee-versus-tax analysis to that fee as modified by the ordinance, the court held that it was a fee: it funds stormwater and flood-management services rather than general government expenses, is held separately from the general fund, and bears a reasonable relationship to the services provided. The ordinance’s reference to using residual funds for “any other lawful purpose” was limited by the municipal code’s more specific restriction that fee revenues be used for flood and stormwater purposes.
The court also held that increasing the fee did not convert it into a tax and that the stormwater utility qualified as a TABOR enterprise. Revenue collected through utility bills was not a governmental grant because it consisted of fees imposed by the enterprise for its services. Finally, Boulder met its initial summary-judgment burden on the emergency ordinance, while Save South did not produce evidence creating a triable issue that Boulder acted fraudulently or in bad faith. The court denied Boulder’s request for appellate attorney fees.
Key Takeaways
- A preexisting service fee does not become a TABOR tax merely because it is increased or pledged to repay revenue bonds.
- Fee revenues may fund systemwide improvements even if a particular project directly benefits only some fee payers.
- Municipal emergency declarations generally are legislative decisions; a challenger must produce evidence of fraud or bad faith to obtain judicial review.
Why It Matters
The decision confirms that municipalities may use enterprise fee revenue to finance infrastructure through revenue bonds without a TABOR vote when the charge remains tied to the costs of providing the relevant service. It also underscores the importance of reading bond ordinances with the governing municipal code, particularly where broad residual-use language is constrained by more specific revenue restrictions.