Tax extension in Focus as Boulder Mulls Muni Ballot MeasuresPublished on: Saturday, July 8, 2017
If renewed in November at its current rate, the soon-to-expire tax that funds Boulder’s effort to form a municipal electric utility would generate a projected $6.3 million over the next three years.
That amount would be roughly $10.2 million short of what staff working on the municipalization project anticipates it would need through 2020, a memo from staff to the City Council stated.
Future funding and its potential mechanisms will be discussed during a council study session Tuesday on ballot measures related to municipalization, at least two of which are expected to reach voters in November.
The question of how, if at all, to pursue the amount of funding staff expects to need seems to have numerous potential answers, according to the memo.
In its latest application to the state Public Utilities Commission — the regulatory body currently presiding over Boulder’s bid to separate from Xcel Energy and pursue local energy independence — the city writes of a “go/no go” decision to take place in 2019 or 2020.
This is the point at which Boulder will, theoretically, have completed Xcel asset condemnation and determined the costs of acquisition, transition and facility separation.
But to even reach that point, staff says, it will need $5 million for regulatory and legal work, $4.5 million for system design, $4.2 million for staffing and a $2.8 million contingency.
City staff has advised the council to consider seeking funds through extension scenarios that run from two to six years. The most costly scenario presented by staff would see average residential monthly bills rise $3.22. Longer extensions would spread costs out to below $0.50 on average, staff wrote.
If Boulder looks to scenarios that bring rising monthly bills, however, the memo added, “the dollar impact to large scale users, such as Ball Aerospace” — which has repeatedly opposed the municipalization effort in its current form — “and the University of Colorado, would be significantly greater.”
Should the City Council opt against a tax extension on the ballot but still seek to fund municipalization, it could look to reallocate money from elsewhere in Boulder’s budget — though that “would not be painless for the city,” the memo stated.
“It would require severe reductions in some services and would eliminate enhancements for other programs and services during the time the expenses were being absorbed,” city staff wrote.
Staff has also advised consideration of an alternative tax measure — one that would be aimed at generating revenue for climate-related action separate from municipalization — that would only go into effect if it received more votes than an extension of the current tax.
The council will also discuss on Tuesday asking voters to extend the council privilege to discuss municipalization in executive session and to amend a section of city charter.
The section in question includes the passage, “The city council shall establish a light and power utility only if it can demonstrate, with verification by a third-party independent expert, that the utility can acquire the electrical distribution system in Boulder and charge rates that do not exceed those rates charged by Xcel Energy at the time of acquisition.”
Staff’s memo suggests that council may wish to omit “at the time of acquisition.”
The council’s Tuesday session will come more than two weeks before the city begins its trial before the Public Utilities Commission. The commission will have a deadline of Sept. 13 — which comes after ballots must be certified by the city clerk’s office — to issue a decision, though Terry Bote, a spokesman for the regulators, reaffirmed this week that the commission “has committed to issuing a decision as expeditiously as possible.”
The different potential judgments in the case could impact the course of municipalization in Boulder, and thus impact funding, among other factors that could be included on the ballot.
But city spokeswoman Sarah Huntley said that city attorneys are not recommending the council put any contingent measures to the voters.
“Staff is not considering or putting forth proposed language that would be contingent on a particular outcome,” of the commission, she said. “We think it would be incredibly difficult to foretell the range of possible outcomes and capture that in a word that would be very clear for voters.”
This Letter to the Editor was originally published in the Daily Camera.