2023 Citywide Context, Strategic Planning & Budget Process

Boulder's History

The Boulder Valley was first the home of Native Americans, primarily the Southern Arapaho tribe who maintained a village near Haystack Mountain north of Boulder. Ute, Cheyenne, Comanche, and Sioux were occasional visitors to the area. In 1858, gold seekers established the first non-native settlement in Boulder County at Red Rocks, now named The People’s Crossing, near the entrance to Boulder Canyon. Throughout the 1860s and 1870s, Boulder became a supply base for miners in search of gold and silver, and railroad tracks were laid to provide service south to Golden, southeast to Denver, and west to the mining camps, expanding the city’s economic and social reach. In the 1890s, Boulder was a site for a Chautauqua, a traveling show providing education and entertainment, and Boulder residents voted to issue bonds to buy the land around what is now the historic Chautauqua Park.

Between 1920-1950, Boulder’s population grew from approximately 11,000 to 20,000. By 1950, Boulder leaders were actively recruiting new "clean" industry and improved transportation, securing a new highway, the Boulder-Denver Turnpike, and the National Bureau of Standards in 1952. In 1959, Boulder voters approved the “Blue Line” city-charter amendment, which restricted city water service to altitudes below 5,750 feet to protect the mountain backdrop from development. In 1967, Boulder became the first city in the nation to institute a dedicated sales tax to purchase open space lands. With the adoption of the Boulder Valley Comprehensive Plan in 1970, passage of the building height restriction ordinance in 1972, historic preservation code in 1974, and the residential growth management ordinance in 1977, Boulder began a period of infill and re-use of its past architectural development which continues to present.

In 1999, an inclusionary zoning ordinance was adopted, requiring 20 percent of new residential development to be permanently affordable for low to moderate income households. The city adopted Zero Waste principles in 2005 and passed a municipal carbon tax in 2008 to counteract climate change. Most recently, in 2021, Boulder voters approved the renewal of the 0.3% dedicated sales tax, the Community, Culture, Resilience, and Safety Tax, to fund critical city infrastructure projects and a grant pool to support non-profits serving the people of Boulder.

City of Boulder Government

The City of Boulder has a Council-Manager form of government. Under this form of government, the elected nine-member City Council sets the policies for the operations of the Boulder government while the administrative responsibilities of the city rest with the council-appointed City Manager. The City Council also appoints the City Attorney and the Municipal Judge. The City Council selects both a Mayor and a Mayor Pro Tem from among the council members, both of whom serve two-year terms. Council members are elected at-large and are non-partisan. The City’s organization chart is presented below.

STRATEGIC PLANNING & BUDGET PROCESS

Strategic Planning & Budgeting for Resilience

The City of Boulder developed a Sustainability, Equity, & Resilience Framework and a Boulder Valley Comprehensive Plan that aligns with this framework. Through the adoption of a Sustainability, Equity, & Resilience (SER) Framework, the city has identified several outcomes necessary for Boulder’s vision of a great community.

The City is in the first year of a three-year plan to implement an enhanced approach to outcome-based budgeting, called Budgeting for Resilience, to incorporate better performance metrics and identify outcomes, advance cross-department and -program collaboration, and increase the transparency of the development of the annual budget and our investments as they align with community goals.

During the 2023 budget development cycle, city departments, in partnership with the Central Budget Office, performed a citywide program and project inventory and aligned identified programs to the SER Framework. In conjunction with these efforts, the City implemented a new budgeting and transparency tool, OpenGov, to enhance the identification and articulation around the City’s intended outcomes and to better understand how the City’s existing and future investments align with these goals. These enhancements provided ease for cross-departmental collaboration and an improved decision-making process during budget proposal review. In 2023 and 2024, the City will identify measurements and key performance indicators (KPIs) for program areas and ultimately use this data to guide budget decisions.

In addition, the Boulder Valley Comprehensive Plan, Department Master Plans and Strategic Plans, and Subcommunity or Area Plans are developed to align with and support the achievement of the outcomes of the SER Framework. Together, they inform development standards, financial policies, and resource allocation through the annual budget process. Recent adopted or approved master plans include Facilities, Parks & Recreation, Library, Transportation, Open Space & Mountain Parks, and Fire-Rescue. Management is committed to incorporating future financial impacts of adopted goals and strategies during the planning process to ensure plans align with available and future resources.

Long-Term Financial Planning

The City of Boulder has focused on long-term financial planning and developing and implementing policy changes that positively impact long-term financial sustainability. Factors influencing long-term financial planning are not unique to Boulder and include: reliance on sales tax, changing demographics toward cohorts that spend proportionately less disposable income on purchases subject to sales tax, shifts in spending patterns away from taxable goods toward nontaxable services, and the growth of online shopping.

To continue to provide a sound financial future, the city has:

• Created the Financial Strategy Committee, comprising four appointed members of City Council, who assist to study and make recommendations on the City’s annual budget and financial policies.
• Approved robust financial management policies including:
  • Developing and adhering to specific reserve policies and targets for all funds to help fund core services during economic downturns and recovery from natural disasters;
  • Developing and adhering to a policy to ensure ongoing expenses are funded with ongoing revenues and not one-time revenues; and
  • Ensuring ongoing operating costs associated with new capital projects can be absorbed with current revenues, or if significant, a new source of revenue is secured to fund the ongoing costs.
• Asked for and received voter approval to:
  • Remove Taxpayer Bill of Rights (TABOR) limitations on all general city revenue (General Improvement Districts continue to have this limitation);
  • Renew expiring taxes. In November 2021, voters approved of the renewal of the expiring 0.3% Community, Culture and Safety tax as the Community, Culture, Resilience, and Safety tax for a period of 15 years through 2036;
  • Implement new taxes dedicated to high priority capital needs and projects;
  • Leverage existing revenue streams and issue debt to fund high-priority capital needs.
• Assessed and adjusted development taxes and fees to ensure growth pays its own way.
• Strategically redesigned employee benefits plans, with an increased emphasis on employee wellness and employee cost sharing.
• Dedicated resources to resiliency and process improvement efforts.

Budget Development Process

The City operates on an annual budget process with the fiscal year aligned with the calendar year. The coming year’s budget is adopted by December 1, as provided by the City Charter. Once adopted, within the parameters of policy guidelines, departments are given full spending authority for their approved budget appropriation.

The City of Boulder Charter establishes the budget process timeline. The budget development schedule is designed to fit within the charter mandate and to allow for active and early participation by the City Council and the community. As shown in the chart below, the City’s budget is developed throughout the year, with the most concentrated effort spent between February and October.

• In January, the City Council and City Management perform an annual retreat to discuss and set priorities.
• From January through May, departments perform budget planning and development in preparation for budget request submittals in May.
• In May and June, the Central Budget Office receives budget requests from departments, then reviews and develops analyses on submittals, and provides summaries and recommendations to the Executive Budget Team. The Executive Budget Team comprises the City Manager, Deputy City Manager, Chief Financial Officer, Human Resources Director, and three rotating department directors.
• In June and July, the Executive Budget Team performs a review and approval of budget submittals and the annual budget package.
• In September, the City Manager’s Recommended Budget, including the six-year Capital Improvement Program, is publicly released and presented to the City Council during a study session.
• In October, the budget and annual appropriation ordinances for the upcoming fiscal year are considered by City Council and adopted during budget readings. Public hearings are held during Council budget readings, which provides the opportunity for the community to comment on the Recommended Budget.
• Once approved by City Council, the Central Budget Office compiles the Approved Budget document and publishes the document before the beginning of the new fiscal year.

Budget Amendments

The City uses the annual comprehensive budget development process to craft the annual recommended budget submitted for City Council consideration and approval each October. However, there are opportunities during the fiscal year for changes to the annual appropriation approved by City Council, such as unanticipated expenses or new mid-year initiatives. The City schedules two budget supplementals, or adjustments-to-base, in May and November of each fiscal year for Council consideration to incorporate these appropriation changes to the approved budget.

Budget Philosophy

Municipal budgets serve several important functions. In addition to laying out a basic spending plan for the city and allocating resources to meet the diverse needs of the community, Boulder’s budget:

• Is a principal policy and management tool for the city’s administration, reflecting and defining the annual work program;
• Provides a framework for the city to accomplish its vision: “service excellence for an inspired future”; and
• Reflects core city values of customer service, respect, integrity, collaboration, and innovation.

The city takes seriously its responsibility to the community as a steward of public funds, which is likewise reflected in its philosophy and approach to the budget process. The City of Boulder holds itself to the standard of providing high-quality services at reasonable cost. City staff have accepted these interrelated challenges, developing the budget within the context of searching for creative solutions for the efficient and effective delivery of city services. As such, the budget:

• Is based on timely, consistent, and clearly articulated policies;
• Is realistic and includes adequate resources to meet assigned work programs;
• Is a cooperative, citywide effort grounded in teamwork, excellent communication, community outreach,
• Emphasizes measures to improve the productivity and effectiveness of service delivery to residents.

Budget Basis

Budgets are prepared on a modified accrual basis except for outstanding encumbrances, which are budgeted as expenditures. Simply, this means obligations of the city are budgeted as expenditures, but revenues are recognized only when they are measurable and available. “Measurable” means the amount of the transaction can be determined and “available” means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are generally recorded when a liability is incurred.

The Annual Comprehensive Financial Report (ACFR) shows the status of the city’s finances on the basis of generally accepted accounting principles (GAAP). In most cases, the ACFR conforms to the way the city also prepares the budget. One exception is compensated absences (accrued but unused vacation or sick leave), which are treated slightly different in the budget and in the ACFR.

Fund Financials & Fund Accounting

The City of Boulder has 41 funds subject to appropriation. The City's fund accounting is designed to demonstrate legal compliance and to aid financial management by separating transactions related to certain government functions. Funds are classified into three categories: governmental, proprietary, and fiduciary. Each category, in turn, is divided into separate fund types.

• Governmental funds are used to account for all or most of a government’s general activities, including the collection and disbursement of earmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital project funds), and the servicing of general long-term debt (debt service funds). The General Fund is used to account for all activities of the general government, not accounted for in another fund.
• Proprietary funds are used to account for activities like those found in the private sector and where the determination of net income is necessary or useful to sound financial administration. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the government (internal service funds). The city applies all applicable Financial Accounting Standards Board (FASB) pronouncements, issued prior to November 30, 1989, and General Accounting Standards Board (GASB) statements since that date in accounting and reporting for its proprietary operations.
• Fiduciary funds are used to account for assets held on behalf of outside parties, including other governments, or on behalf of other funds within the government. When these assets are held under the terms of a formal trust agreement, a pension trust fund must be used. Agency funds are generally used to account for assets the government holds on behalf of others as their agent.