City of Boulder 2L Ballot Issue Utility Occupation Tax Increase And Extension
SHALL CITY OF BOULDER TAXES BE INCREASED $4,000,000 ANNUALLY (IN THE FIRST YEAR) THROUGH AN INCREASE OF UP TO THAT AMOUNT IN THE CURRENT UTILITY OCCUPATION TAX IN THE YEAR 2018; AND $3,000,000 IN THE YEAR 2019; AND SHALL THE PORTION OF THE CITY'S UTILITY OCCUPATION TAX APPROVED BY VOTERS ON NOVEMBER 1, 2011, WHICH IN 2017 WAS IN THE AMOUNT OF $2,015,710, BE EXTENDED FROM ITS CURRENT EXPIRATION DATE OF DECEMBER 31, 2017 THROUGH DECEMBER 31, 2022; AND SHALL THE EXTENSION AND THE ANNUAL INCREASE IN THE TAX BE USED TO FUND COSTS ASSOCIATED WITH A MUNICIPAL ELECTRIC UTILITY THAT WILL SUPPORT BOULDER'S CLEAN ENERGY GOALS AND THE COMMUNITY'S COMMITMENT TO THE PARIS CLIMATE AGREEMENT, IMPROVE SYSTEM RELIABILITY, AND CREATE ENERGY-RELATED BUSINESS OPPORTUNITIES, PROVIDED THAT IF THE CITY OF BOULDER DECIDES NOT TO PROCEED WITH A MUNICIPAL ELECTRIC UTILITY, THE TAX SHALL EXPIRE AFTER COSTS ASSOCIATED WITH THE MUNICIPAL UTILITY EFFORT ARE PAID; AND SHALL THE INCREASED AND EXTENDED PORTION OF THE TAX BE SUBJECT TO THE SAME TERMS AND CONDITIONS AS THE ORIGINAL TAX AND ALL EARNINGS THEREON (REGARDLESS OF AMOUNT) CONSTITUTE A VOTER APPROVED REVENUE CHANGE, AND AN EXCEPTION TO THE REVENUE AND SPENDING LIMITS OF ARTICLE X, SECTION 20 OF THE COLORADO CONSTITUTION?For the Measure Against the MeasureMajor ProvisionsA yes vote means the existing Utility Occupation Tax would be extended for five years, through 2022. In addition, the tax would be increased for the years 2018 and 2019. The revenue would be used to partially fund expenses in pursuing municipalization, including engineering and legal work.A yes vote to continue this tax does not mean that municipalization will occur. Likewise, a no vote on this tax does not mean that the city will end the quest for municipalization. The city could use other sources of revenue, including the General Fund, which they have used in the past, to continue the effort to bring Boulder electricity, from 100% renewable energy sources.BackgroundIn 2011, Boulder voters approved a tax on electricity utility bills to pay for expenses associated with municipalization. This tax will sunset in December 2017. The intent of municipalization is to provide Boulder with electricity from 100% renewable energy sources. Since 2011, discoveries and Colorado Public Utilities Commission (PUC) rulings have made it clear the cost and complexity of municipalization was underestimated. The city’s current estimate of the costs of the engineering and legal work for municipalization exceeds the revenue expected from the proposed continuation and tax increase.
CHOOSE TWO CANDIDATES FROM BELOW TO COMPARE
Yes - For the Measure
No - Against the Measure
Those IN FAVOR say:
1. Boulder has received clear direction on how to proceed from the Public Utilities Commission, and now knows the steps it needs to take to start up its own utility like 29 other Colorado cities run. The 2L funding will enable final engineering for the creation of the Boulder utility with a very minor impact to taxpayers.
2. Cities like Longmont and Chattanooga have leveraged their existing public electric utilities to bring low-cost public broadband to their residents. Both financial and infrastructure resources from a public electric utility can enable a public broadband utility in short order.
3. The choice regarding separation from Xcel is a generational decision on par with previous landmark Boulder initiatives such as setting growth boundaries, creating our Open Space system, establishing the Pearl Street Mall, and limiting building heights.
4. With a muni, Boulder residents and businesses would have much more freedom to pioneer creative solutions to clean energy delivery within the City. Existing limits to the deployment of customer-sited solar and storage could be removed, and local businesses could sell excess energy from their solar system to their neighbors.
Those OPPOSED say:
1. The city has not wisely spent the $11.8 million generated by this tax between 2012 and 2017 and has actually spent $13.9 million on these lawsuits, with the $2.1 million shortfall being taken from the city’s General Fund.
2. The city staff has acknowledged that, even with a tripling of the tax in 2018, there will be insufficient money to pay the litigation bills and they intended to deplete the city’s General Fund Reserve, the city’s rainy day savings fund, by 20% next year.
3. The city staff really doesn’t know how much municipalization will cost taxpayers. In 2011, city staff predicted the following:
- Litigation costs would be no more than $6 million; now forecasted to exceed $30 million
- Network separation costs would be less than $15 million; now acknowledges the cost will exceed $100 million
- Condemnation award for the network assets would be about $120 million; staff now hoping that the award will not exceed the voter-imposed cap of $214 million.
4. When the tax was proposed in 2011, city staff predicted the municipal utility would be up and running by 2017. It now appears that it will take until 2023, or later. Meanwhile, Xcel Energy has filed a plan to retire coal plants and use new wind and solar facilities, increasing renewable energy to 55% statewide. In parallel, Denver and other Colorado cities (but not Boulder) are working with Xcel to meet their goals of 100% renewable electric energy by 2030.
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