Boulder Council kicks off ‘deep dive’ into budget with focus on library, food tax, racial equity

Yates, Young volunteer for subcommittee in two-year project

Vicki Somberg browses the shelves at the Boulder Public Library on Nov. 27. City officials hope to refresh analysis in March of what it would mean for the city budget if the Boulder Public Library is severed from city control and funding through the formation a special district.

Questions on how forming a new library district, ceasing taxes on food purchased at grocery stores and broadly applying racial and social equity measurements would impact the city budgeting process are at the forefront of a Boulder City Council project that kicked off Tuesday.

Council is set to take a “deep dive” into municipal revenues, expenses and unfunded needs and projects over the next two years. It laid out a process by which it will analyze departmental budget items’ effect on progress toward racial and social equity goals.

Council also gained a clear picture of just how many unfunded operating and capital needs there are across the city: Approximately $300 million. That amount is the total of what all city departments have claimed they need to achieve their operating and capital priorities that cost $1 million or more.

“Relocating fire stations alone is $60 million,” Boulder Executive Budget Officer Kady Doelling said. “A lot of it is the large capital needs that may not be realistic within the next five to 10 years, but it definitely is a need within the departments that isn’t overstated in my opinion.”

Debate emerged regarding how high city staffers should aim during departmental master planning processes when listing their respective “vision levels” of service, or the wish lists city leaders would deliver if funding were unconstrained.

“I think master plans that are unrealistic do a disservice to the community about expectations that are never going to be fulfilled,” Councilman Mark Wallach said. “I think reining that in a little bit, talking about those things that are capable of being achieved in some defined period of time.”

Councilman Aaron Brockett agreed that vision levels of master plan funding could be watered down from their current rates; the recently approved update to the Transportation Master Plan came with a staff-anticipated $200 million annual funding shortfall to achieve its full vision.

“It seems like the vision plans are not really a doable thing,” Brockett said. “I like the idea of maybe paring the visions down to something that we could actually achieve, or could conceivably achieve half of.”

Mayor Sam Weaver gently pushed back, noting the north Boulder library branch set to go under construction as soon as late 2020 was included as a vision level item in the North Boulder Subcommunity Plan passed more than 20 years ago.

“I wouldn’t want to make our master plans not have some somewhat ambitious goals in them, but I think they should be the most important ones,” Weaver said. “… I think it should be the most important, difficult to achieve but worthwhile goals. … There should be some real concentration about what would be the best bang for the buck if we were able to get an extra 20% for three years or get our project in the capital improvement plan for the next five years.”

City officials hope to refresh analysis in March of what it would mean for the city budget if the Boulder Public Library is severed from city control and funding through the formation a special district, essentially a new local government that would have to receive voter-approved funding through a new property tax.

Master plans for the city’s fire department, police department, parks and recreation and facilities are scheduled to be completed or updated next year.

Councilwoman Rachel Friend raised questions about the equity impacts of the food tax, and the possibility of expanding the demographics eligible for the city’s Food Tax Rebate Program, which Council is set to discuss next week.

Taxes on food purchased for at-home consumption raise an estimated $9 million to $12 million annually for the city; the 2018 total sales tax revenue from food stores was $16.5 million, but not all sales are for at-home consumption, staff noted.

Some city-issued bond repayment programs carry a sales tax pledge as part of the bonds, Boulder Chief Financial Officer Cheryl Pattelli.

“At the end of the day, this could be problematic to our bond rating, and to our investors if we took revenue that we said we were going to pledge and we reduced that amount. In general, rating agencies are not huge fans of voluntary reductions in revenues,” Pattelli said. “… The second item just to think about is when we look at our sales tax picture, food is kind of one of those only items you need no matter what the economy looks like. We’ve always used this tax to kind of balance downturns and those types of things, because it’s more of a stable form of sales tax.”

Mayor Pro Tem Bob Yates and Councilwoman Mary Young volunteered to serve on a subcommittee for the budget project, the initial focus of which will be revenue; part of the discussion in the next year will be the feasibility of voters passing a countywide sales or property tax to fund transportation and affordable housing projects. The county is working on polling to gain an idea on the prospects of voters passing such a measure in the 2020 election, and the city will be a part of those discussions, officials said.

City officials hope to discuss a proposed two-year work plan on the budget in April.

City staff plans through the first quarter of 2020 to research how other communities that use a racial equity budgeting tool developed their methods to ensure the city isn’t just focused on equitable delivery of service, but also the budgeting impacts on equity. Through the rest of 2020, Boulder hopes to pilot a racial equity measurement tool for the 2021 budget, and expand it into a broader budget practice for the 2022 budget.

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