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A group of Boulder residents has sued the City of Boulder over how it plans to pay for the South Boulder Creek flood mitigation project — the latest attempt to halt development of a spillway and detention pond at the controversial CU South site, a plan decades in the making.
The lawsuit, filed April 2, alleges the city is prohibited under the Taxpayer Bill of Rights (TABOR) from charging water utility fees to fund the project. The plaintiffs argue the fees amount to taxes and therefore require voter approval.
The case could have broader implications for how the city finances flood mitigation projects, which often rely on utility fees and bond sales. In recent court filings, the city said the lawsuit has already held up financing for the CU South project. The city still plans to break ground as soon as this year.
The CU South property, which is largely undeveloped, has served as informal open space for years. But under a 2021 annexation agreement between the city and CU Boulder, the site is slated to be developed into mixed-use housing and university facilities. In exchange, the university is allowing the city to build a concrete spillway along U.S. 36 and create a detention pond on a portion of university-owned land — aimed at protecting about 2,300 residents who live in the South Boulder Creek floodplain.
Flood mitigation at CU South has been debated for decades, but urgency for the project grew after a 2013 storm caused South Boulder Creek to overtop U.S. 36, sending waist-deep water into neighborhoods and the Frasier Meadows retirement community. Opponents — including PLAN-Boulder County, a political organization advocating for protecting open space — have unsuccessfully sought to block the project through ballot measures in 2006, 2021 and 2022.
Leading the lawsuit is Save South Boulder, an organization that opposes the flood project. The other plaintiffs are Margaret LeCompte, a professor emerita at CU Boulder and former treasurer for Save CU South, a 2021 ballot measure committee seeking to undo the annexation; Ann Harlin Savage, former secretary of Save CU South who lives near the project site; and Steven Telleen, president of the South East Boulder Neighborhood Association.
“Save South Boulder and its members derive aesthetic enjoyment and improved quality of life from the open space that will be destroyed by the Project, including by walking, hiking, photographing and watching and experiencing wildlife and rare habitat in the area upstream of the Project in the South Boulder Creek Floodplain,” the group’s complaint states.
They cite recent court precedent to argue that utility fees must benefit everyone who pays them — and say this project does not. They also contend that because bond proceeds could be redirected to other city uses if the project costs less than $66 million, the fees may qualify as taxes under TABOR.
In response, the city denied that utility fees are taxes and requested an expedited ruling to prevent the case from going to trial and to avoid further delays.
Officials said the mere filing of the lawsuit has prevented them from selling bonds, effectively acting as a “de facto injunction.” The issuance of bonds would provide the city with upfront funding for the project’s first phase. But the city said it cannot provide the certifications required by buyers affirming there is no pending litigation.
“Delay in issuing the Bonds will increase the costs of the Project, both in the form of rising interest rates and construction costs,” the city wrote in a recent legal motion.
Boulder County District Court Judge Michael Kotlarczyk has scheduled a hearing for oral arguments on the city’s request for summary judgment for May 16.
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