Boulder will not have to cut library hours or make additional layoffs after voters on Tuesday approved Issue 2B, which will generate about $1.4 million annually through an occupation tax on Xcel Energy.

Voters overwhelmingly supported the measure, which garnered 69 percent of the vote by 3 a.m. Wednesday.

The tax will replace a franchise fee that the city will lose at the end of this year when a 20-year franchise agreement with Xcel expires. While the measure is not a new tax on Boulder residents, Xcel will likely pass the expense on to its customers in the city.

The measure will keep revenue from Xcel flowing into Boulder's budget through 2015, giving the city time to study alternative sources of energy. Options could include taking municipal control of the city's supply of electricity, or working with Xcel on a new franchise agreement that includes more renewable sources.

"This is a clear message to Xcel," City Councilwoman Lisa Morzel said Tuesday night. "Are you going to partner with us or not?"

Tom Henley, a spokesman for Xcel, said the company didn't take a position on the ballot measure, and that it will "continue to serve our customers in Boulder, as we always have, with the same reliable electric service at reasonable rates."

Not renewing the franchise with Xcel was a risky move for the city, which relies on the revenue from the franchise fee to support the general fund and city services.

"I think it was a risk we had to take," said Councilman Matt Appelbaum.

Appelbaum said the city will have to move quickly now to develop plans for where and how the city gets its electricity. With the new tax expiring in five years, Appelbaum said the goal should be for the city to go back to voters within the next two years with options.

The vote also means the city won't have to go to one of its backup budgets for 2011, which included $1.4 million in cuts, such as reduced library hours and layoffs.

"It's really a blessing," City Manager Jane Brautigam said of the measure's apparent approval. "What's really important is we get to keep the great services we've got in the city."

Brautigam praised the volunteers who worked to campaign in support of the measure.

One of those people is Julie Zahniser, who coordinated the campaign. She said it now becomes important for Boulder residents to get involved in the discussion about the city's energy future.

"People are going to need to be involved in the next decisions," she said. "It's an exciting opportunity we have here."

Boulder's other tax measure, Issue 2A, also seemed to strike a chord with voters on Tuesday.

As of 3 a.m., 68 percent of voters were in favor of increasing the city's public accommodations tax.

The measure will increase the city's accommodations tax from 5.5 percent to 7.5 percent to fund improvements and services to the residents and visitors of the city and to promote increased tourism in Boulder. Hotel visitors will now pay an additional $2 for every $100 they spend on lodging.