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.
The entire CU South situation is a mess. Lets start with this…the land we call CU South is a FLOOD PLAIN. Its natural job is to serve as a place for flood water from the mountains’ drainage to spread out. But the original owner of the land, a gravel pit company, built a berm (if you walk CU South , you walk on that berm) then failed to remediate the site back to its original condition as required by law. The State never held that company accountable for that, thanks to an old boys network. CU bought that unremediated land for cheap thanks to a old boys network. CU never removed the berm. When the 2013 flood happened, the berm did what it was designed to do…it kept the creek flood waters away from where the gravel pits had been. Thanks to the berm, the flood water was pushed east and north across 36 and into the neighborhoods that got flooded. When CU asked yhe city to annex the site and change the zoning from agriculture to high density, the berm was still there and CU passed the eventual costs to deal with flood control to us, the taxpayers
because the land is still a FLOOD PLAIN. CU got approval to develop a huge amount of student housing, office buildings, a small stadium, and roads….all of which will be built on a FLOOD PLAIN. It will flood again. There will be flood damage. I think the city f’d up when it approved the annexation. But driving this whole sordid story: $$$$$$$$$$.
The position of the City, that the lawsuit is frivolous, is rightly shot down by the Court of Appeals. The Court held “[w]e conclude that Save South’s arguments on appeal are not substantially frivolous, groundless, or vexatious. Though it did not prevail on appeal, we do not consider Save South’s arguments so lacking in substance as to be frivolous or groundless. And other than its assertions that Save South wants to delay the project, Boulder doesn’t point us to anything in the record showing that Save South’s appeal is vexatious.” The City Attorney was soundly defeated in the attempt to silence the people.
Whether the “fees” fit the official definition of a tax or not the amount in question is $66M passed with a council emergency vote. How low class of the city to ask for damages. Maybe they were trying to recoup the money they lost with the unsuccessful lawsuit against the FAA.
Meanwhile people should at least consider looking at Ben Binder’s extensive and dogged research on CU South. Here is a youtube link:
https://www.youtube.com/watch?v=1TZpSXe7s88
“Previous attempts to block the project through ballot measures failed in 2006, 2021 and 2022.” I.e., democracy, whether or not wise.