Boulder's City government implements over 300 "community" and "governance" programs spread across 21 departments. Community programs provide direct service to residents and businesses, while governance programs provide support services to other city departments.
More than 50% of the operating budget goes to 5 departments: police, open space and mountain parks, parks & recreation, utilities and city governance/administration (city council, attorney’s office, clerk, communications, city manager, finance, HR, IT).
Note that “governance” includes city debt payments and operating reserves. The city has been building towards a 20% operating reserve for the last ten years.
How are budget priorities set?
Overall budget priorities are set through the "priority based budget process." Programs are placed into one of four categories and ranked, based on staff's analysis of community values. Category 1 programs receive the most funding, and category 4 programs the least.
Our library has consistently been ranked in the 3rd and 4th categories.
In the 2018 budget, staff summarized results:
"From 2011 when the city implemented Priority Based Budgeting, to today, the total budget has increased 35 percent, and Quartile 1 programs have increased 16.5 percent while Quartile 4 programs have decreased 16 percent.
Quartile 2 and 3 programs also increased over the years largely due to programmatic increases in Human Services Homelessness initiatives and Police code enforcement, general investigations and major crimes.
City Council's role in priority setting
Over the years, city staff has done a good job of keeping the city solvent in challenging circumstances.
But the budget process we’re using doesn’t let us see budget tradeoffs. Staff ends up making the tough choices about what to fund - and what not to fund - and neither Council nor the community sees tradeoffs. Here's how it works:
January: Every two years, a new Council sets priorities for the following two years. New programs and initiatives are added, and some former priorities are de-emphasized or changed, but (usually) nothing is dropped. Council doesn’t discuss the budget implications of its priorities, or impacts to the ongoing work of the city.
February: The Executive Budget Team develops a workplan based on Council’s priorities. That workplan sets the Council agendas - and the City’s priorities - for the next two years. The current workplan is 39 pages long and contains 88 priority items. Most of these activities are over and above the normal work of running the city.
March-April: Meanwhile, department heads are developing budget proposals for their departments. These budget proposals contain funding requests for the department’s ongoing work and its unfunded needs. Advisory boards review the proposed budgets for their departments in March/April and make recommendations. The proposed budgets and advisory board recommendations then go to the Executive Budget Team. Council and the community don’t see department [proposals or advisory board recommendations. (You’d have to dig into every advisory board’s meeting packets and minutes to find them - and not all departments have advisory boards.)
May-July: The Executive Budget team does the hard work of balancing the budget - deciding what to fund and what not to fund. Budget priorities and tradeoffs are determined at this stage. A proposed budget is submitted to Council in August.
August: City Manager submits the proposed budget to Council. Council packets provide information on what the Executive Budget Team is recommending for funding - no information is provided about what is NOT being funded. (The April 2019 budget study session on unfunded needs was the first time we saw what is NOT being funded through the regular budget process.)
September-October: Council holds public hearings and adopts the budget. (The city charter requires adoption of a balanced budget by the end of the preceding calendar year.)
Where do City revenues come from?
Funding for the City budget comes from a variety of sources, including sales and use taxes, property taxes, fees, and federal and state grants
Three revenue sources represent roughly 70 percent of all city funds
- Sales and Use taxes 38%
- Utility rate charges 18%
- Property taxes 13%
Revenues for the city's three utilities are governed by state law and can only be used for water, wastewater and flood purposes.
User fees (parking, permits, and fees related to land development) provide the majority of funding for some departments (such as community vitality & planning and development services Developmen
Sales tax revenues are the largest source of funding for the city budget. But sales tax revenues are not rising as fast as the costs to deliver programs and services (see Boulder's Shrinking Budget Pie).
How much of city revenue is flexible?
Only about 30% of the city budget can be freely used for any purpose.
Restricted” funds make up more than 70% of the total budget.
Uses for utility funding are restricted by state law. Utility funding accounts for about 16% of the total total budget.
Other funds are restricted through a vote by the Boulder community. These funds are commonly referred to as “dedicated” or “earmarked” funds. Examples include transportation, open space, climate action, parks and recreation, library and the sugary beverages programs. Uses for these funds can only be changed by a community vote
The amount of revenue dedicated to various departments varies substantially.
The vast majority of funding for transportation, open space, parks and recreation, housing, energy future and climate action comes from dedicated sources.
The .333 mill property tax dedicated to the library generated about 15% of the library’s budget in 2018.
Because so much of the city budget is restricted to specific purposes, Council has very little latitude to reallocate funding - even without the unfunded needs (see Boulder's Shrinking Budget Pie).
What is the City’s current sales tax rate?
2019 City of Boulder sales tax is 3.86%
0.1 cent = $3.4 Million
More than half of the sales taxes we pay in the city go to support non-city programs and services.
Overall, Boulder’s sales tax rate is among the highest in the region.
Some portions of the city's existing sales tax are scheduled to expire over the next 20 years. While lower sales taxes may be great for our taxpayer pockets, lowering sales taxes will result in even less revenue available to fund city programs and services.
Here's a snapshot of how the sales tax rate will decline without community votes to extend expiring portions of sales tax.
What is the City's current property tax rate?
City of Boulder property tax 2019 is 11.981 mills
1 mill = $3.61 Million
Only about 14% of the property taxes we pay go to fund city programs and services.
A provision in the City Charter sets a limit of 13 mills on city property taxes.
Boulder's property taxes are among the lowest for cities in the region.