Boulder, Colorado — A group of local residents has filed a lawsuit against the city over its plans for financing the South Boulder Creek flood mitigation project. This is the latest effort to halt the controversial proposal to construct a spillway and detention pond at the CU South site, a plan that has been under consideration for decades.
The lawsuit, submitted on April 2, claims that the city is barred under Colorado’s Taxpayer Bill of Rights (TABOR) from using water utility fees to fund the project. Plaintiffs argue that these fees should be classified as taxes that require voter approval, posing a significant challenge to the city’s funding strategy.
The outcome of this legal action could have widespread implications for how Boulder finances similar flood mitigation efforts, which often depend on utility fees and the sale of bonds. In recent legal proceedings, city officials indicated that the lawsuit has already delayed the project’s financing. Nevertheless, the city aims to begin construction later this year.
Under a 2021 annexation agreement between Boulder and the University of Colorado Boulder, the largely undeveloped CU South property is slated for development into mixed-use housing and university facilities. The city plans to build a concrete spillway along U.S. 36 and establish a detention pond on university-owned land, intended to safeguard roughly 2,300 residents living in the South Boulder Creek floodplain.
The need for flood mitigation at CU South has intensified following a significant storm in 2013, which caused the creek to overflow, flooding neighborhoods and impacting the Frasier Meadows retirement community. Opponents to the project, including the political organization PLAN-Boulder County, have unsuccessfully pursued ballot measures aimed at blocking it in 2006, 2021, and 2022.
Leading the lawsuit is Save South Boulder, an organization opposed to the flood mitigation project. Other plaintiffs include Margaret LeCompte, a professor emerita at CU Boulder, former treasurer of a committee aimed at reversing the site’s annexation; Ann Harlin Savage, a former secretary of that committee who resides near CU South; and Steven Telleen, president of the South East Boulder Neighborhood Association.
According to the group’s complaint, members of Save South Boulder derive significant enjoyment from the open space that the project would alter. They cite recent legal precedents suggesting that utility fees must benefit all contributors, arguing this project fails to meet that criterion. Additionally, they contend that since bond proceeds might be diverted to other uses if the project costs less than $66 million, the fees could be deemed taxes under TABOR.
In response, city officials refute the characterization of utility fees as taxes. They have requested an expedited ruling to avoid further delays by preventing the case from advancing to trial.
The filing of the lawsuit has created a barrier to the city’s ability to sell bonds, effectively serving as a “de facto injunction.” The sale of these bonds is crucial for obtaining upfront funding needed for the initial phase of the project, which is now hampered by the pending litigation.
Boulder County District Court Judge Michael Kotlarczyk has set a hearing for May 16 to discuss the city’s request for a summary judgment regarding the matter.
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