A Boulder County District Court judge on June 10 dismissed a lawsuit by residents seeking to block the South Boulder Creek flood mitigation project at CU South, clearing one legal hurdle for a $66 million project more than a decade in the making.
The lawsuit has stalled the city’s ability to issue bonds to finance the project. The project includes building a concrete spillway along U.S. 36 and creating a detention pond aimed at reducing the risk of flooding for about 2,300 residents living in the 100-year South Boulder Creek floodplain. Those homes have a 1% chance of flooding in any given year.
The judge’s decision theoretically clears the way for the city to move forward. But the plaintiffs, a group called Save South Boulder, plan to appeal, potentially prolonging the delay and increasing project costs.
The dispute centers on whether the city’s use of stormwater utility fees to fund the project constitutes a tax. The plaintiffs argue that it does, and therefore should have required voter approval under the state’s Taxpayer Bill of Rights (TABOR). They also claim the fees violate TABOR because many residents who pay them will not directly benefit from the project. In addition, they argue the fees qualify as taxes because, if the project ends up costing less than $66 million, a city ordinance passed in March could allow leftover funds to be used for purposes beyond flood mitigation.
City attorneys have rejected those claims. They argue the fees benefit all city residents by maintaining the citywide stormwater system. They also contend that the ordinance in question must be read in the broader context of city code, which restricts any leftover funds to be spent on other stormwater-related uses, not general city spending. They asked the judge for a fast ruling to avoid rising costs caused by construction delays.
In a ruling on June 10, Judge Michael Kotlarczyk sided with the city on the core questions in the case. Kotlarczyk agreed the primary purpose of the fee is to pay for stormwater projects and city code restricts how the city can spend the money.
Regarding the argument over whether the stormwater fee benefits residents outside the South Boulder Creek floodplain, the judge said “mathematical exactitude” between who pays the fee and who benefits is not necessary.
“Courts have acknowledged that some misalignment between those paying a fee and those intended to benefit from the fee does not convert a fee into a tax,” he wrote. “Accordingly, there is no genuine dispute of fact that all those who pay the Fee will benefit somewhat by the Fee by the operation and maintenance of the stormwater system, and to the extent some will benefit more (based on their proximity to the Project), that is permissible under binding precedent.”
The CU South site, currently mostly undeveloped and used informally as open space, is slated for mixed-use housing and university facilities under a 2021 annexation agreement between the city and CU Boulder. In exchange, the university agreed to allow the city to use part of the land for the flood mitigation project.
Opponents — including PLAN-Boulder County, an organization that has long advocated for open space — have fought the project for years, citing concerns about its impacts on informal open space and aesthetics. Previous attempts to block the project at the ballot box failed in 2006, 2021 and 2022.
Flood mitigation efforts at CU South gained urgency after the 2013 flood, when South Boulder Creek overtopped U.S. 36 and sent waist-deep water into nearby neighborhoods, including the Frasier Meadows retirement community. Some critics of the project sought alternatives that would provide a greater level of flood protection. But many ideas received pushback from CU Boulder, which owns the land, and the Colorado Department of Transportation, which owns the highway right-of-way.
On March 6, the Boulder City Council passed the ordinance authorizing the city to issue bonds on an emergency basis, citing favorable interest rates at the time. In a legal motion seeking to end the lawsuit, the city wrote, “delay in issuing the Bonds will increase the costs of the Project, both in the form of rising interest rates and construction costs.”
The favorable ruling does not end the dispute, however. The plaintiffs plan to appeal to the Colorado Court of Appeals, potentially stalling the city’s efforts to finance the project for months.
During a hearing on May 16, Thomas Snyder, a lawyer representing the city, implied the city may seek to recoup losses or costs incurred from the plaintiffs if they appeal. He told the judge the city would “be a little bit more aggressive if there were an appeal filed” in terms of “holding the plaintiffs responsible for the delay that this is causing.”
One of the plaintiffs, Margaret LeCompte, a professor emerita at CU Boulder and former treasurer for Save CU South, a 2021 ballot measure committee that sought to undo the annexation, said she considered the comment from the city attorney a threat.
“That’s just a threat that is trying to scare us,” she told Boulder Reporting Lab. “We have every intention to continue pursuing this all the way to the Supreme Court.”
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