The Colorado Court of Appeals has upheld Boulder’s use of stormwater utility fees to pay for the South Boulder Creek flood mitigation project at CU South, marking the latest setback for residents seeking to block a project that has been in the works for more than a decade.
The project includes building a concrete spillway along U.S. 36 and creating a detention pond to reduce the risk of flooding for about 2,300 residents who live in the 100-year South Boulder Creek floodplain. Properties in that floodplain have a 1% chance of flooding in any given year.
The lawsuit centers on whether the city’s use of stormwater utility fees to fund the project constitutes a tax. The plaintiffs, Save South Boulder and several Boulder residents, argued that it does and therefore requires voter approval under the state’s Taxpayer Bill of Rights (TABOR). They also argued the fees violate TABOR because many residents who pay them will not directly benefit from the project.
City attorneys have rejected those claims. They argue the fees benefit all city residents by maintaining the citywide stormwater system.
The Aug. 20 ruling, written by Judge Craig Kuhn with Judges Rebecca Freyre and Sueanna Johnson concurring, sided with the city on all substantive questions, finding, among other things, that the fee is not a tax requiring a vote.
The city lost on one point. It had asked the court to require the plaintiffs to pay its attorney fees, describing their claims as frivolous, groundless and vexatious. The judges refused, stating that the arguments were not “so lacking in substance as to be frivolous or groundless.”
The lawsuit has stalled the city’s ability to issue bonds to finance the project. As a result, the city said it now plans to fund construction year by year using money from the stormwater fund. This would stretch construction from three years to five.
The city has been negotiating with CEI, a contractor based in Denver, to build the project. And the longer schedule drove the negotiated cost to $76.5 million, up from a previous estimate of $66 million, according to city officials.
A city spokesperson said the contract is designed to accelerate the project and cut costs if the litigation is resolved and bonds become available.
City officials said they are still waiting for a final permit from FEMA. Officials have previously declined to say how much the permitting process or the lawsuit have delayed the project. Construction was previously slated to begin in 2025.
“The City of Boulder received the opinion by the Colorado Court of Appeals and is pleased by the conclusions reached by the court,” Sarah Huntley, a spokesperson for the city, told Boulder Reporting Lab. “However, we cannot comment further at this time due to the possibility of a writ of certiorari in the Colorado Supreme Court.”
In a statement, Randall Weiner, an attorney for Save South Boulder, said the group believes voters should have decided whether to impose the fee increases associated with what he described as the largest public works project in Boulder’s history.
“Because this will be the largest public works project in the City’s history, and Boulder residents’ utility fees will increase as a result, we argued that the increased charges related to the dam had to be put to the voters under TABOR,” Weiner, of Weiner & Cording, said in a statement.
The CU South site, currently mostly undeveloped and used informally as open space, is slated to be developed into 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 through ballot measures failed in 2006, 2021 and 2022.
Flood mitigation efforts at the CU South property became more urgent 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 sought alternatives that would provide more protection against extreme floods. 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. Other alternatives would have required the city to dispose of additional open space.
On March 6, 2025, 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 ruling does not end the dispute. Save South Boulder can ask the Court of Appeals to reconsider the case or petition the Colorado Supreme Court to review it. The group said in a statement that it is considering its legal options.
