Colorado Court Backs Boulder's Stormwater Fee for Flood Project

The Colorado Court of Appeals has upheld the City of Boulder's stormwater fee as a legitimate fee rather than a tax under the state's Taxpayer's Bill of Rights (TABOR), clearing the way for the city to fund flood mitigation projects through revenue bonds without voter approval.

The ruling, issued by Judge W. Eric Kuhn with Judges Rebecca Freyre and Susan Johnson concurring, applied Colorado's three-factor test for distinguishing fees from taxes. The court concluded that the stormwater charge was imposed to fund a specific regulatory program, was reasonably related to the services provided, and was administered through a qualifying stormwater enterprise.

The decision stems from a lawsuit filed by the group Save South Boulder, represented by residents Margaret LeCompte, Harlan Savage, and Steven Telleen in court records. The group challenged the Boulder City Council's emergency ordinance passed in March 2025, which authorized $66.5 million in revenue bonds for the South Boulder Creek Flood Mitigation project. Plaintiffs argued that the stormwater fee was effectively a tax, requiring voter approval under TABOR, and that the project's benefits would primarily accrue to floodplain residents.

A spokesperson for Boulder, Sarah Huntley, said in a statement: "The City of Boulder received the opinion by the Colorado Court of Appeals and is grateful for the court's careful consideration. We are reviewing the opinion and cannot comment further at this time." The city has not yet announced whether it will appeal.

The court also ruled that Save South Boulder is not responsible for the city's attorney fees, a point the group highlighted in its statement. Randall Weiner, attorney for Save South Boulder, said the group is considering its options, which include asking the Court of Appeals to reconsider or appealing to the Colorado Supreme Court.

The project, which the city says will protect homes in the south Boulder floodplain, involves constructing a large concrete spillway near CU South—critics describe it as a dam—along with a detention pond and water diversion under S. 36 back into Boulder Creek. Construction is scheduled to begin in early October, with funding provided through stormwater revenues in partnership with the Mile High Flood District.

City attorneys have warned during court hearings that ongoing litigation has increased the project's estimated cost from $66.5 million at the time of the March 2025 ordinance to $76.5 million today. The city announced the construction timeline just over a week after the appeals court ruling.