Concerned about a potential $8 to $10 million shortfall, the City of Boulder is taking several financial steps to save costs for the remainder of 2025.
Concerned about a potential $8 to $10 million shortfall, the City of Boulder is taking several financial steps to save costs for the remainder of 2025. The most impactful of these is a hiring freeze for nearly all vacant positions between now and Dec. 31.
While some exceptions will be made for critical roles, such as those necessary to ensure public safety and water quality, any exception will require authorization by the city manager. The city will honor any offers that have already been made and accepted but will stop posting non-essential positions, effective immediately.
“We do not take this step lightly, but we, like many other local governments, are facing challenging conditions,” Rivera-Vandermyde said. “We have a responsibility to ensure we can fulfill our obligations to serve our community within a balanced budget.”
While the 2025 budget was already modeled on moderately conservative projections, the city is seeing more flattening of revenue coming in from the end of 2024 and the first few months of this year. The city’s primary source of income is sales and use tax, as well as a modest portion of property taxes collected within its jurisdictional limits. The majority of property tax revenue goes to the county and schools.
While all city funds that rely on these taxes are impacted, the General Fund, which covers many core services, including public safety, roads and paths, parks, recreation centers, many social service programs, communications and engagement, is under the most stress.
Lower-than-anticipated collections have not been limited to sales and use or property taxes. There have also been declines elsewhere, including in taxes on marijuana and electronic smoking devices, as well as in the utility franchise fee.
These trends are occurring against a backdrop of economic uncertainty. Inflation and tariffs may be causing changes in consumer behavior. Last month, Boulder City Council heard from independent economic analysts from University of Colorado Boulder who are predicting a mild recession by the end of the year.
State legislation that limits property tax increases and other types of revenue is also impacting the city’s projections.
Additional cost-saving proposals
In addition to the hiring freeze, every city department has been asked to look for opportunities to underspend its allocated budget over the next five and a half months and has received clear direction that new positions and increases in budgets are unlikely in 2026.
“This is not the time for expansion,” Rivera-Vandermyde told staff this week.
Consistent with Boulder’s commitment to outcomes-based budgeting, which seeks to foster resilience, equity and accountability, the city is seeking to avoid uniform, across-the-board cuts. Instead, the city will evaluate cost savings proposals from every department, with a goal of reducing spending while preserving essential functions and minimizing disproportionate impacts.
“We plan to take a thoughtful approach to all proposals, especially those that will result in changes in offerings or service delivery to our community,” the city manager said. “We do want to be transparent, however, that the combination of staff vacancies and reduced operational and programmatic spending could affect what we can provide as local government. We’re asking for our community’s understanding and patience.”
A look to the future
Despite these cautions, the city is hopeful these measures – combined with ongoing financial improvement efforts – will prevent mass layoffs, wage cuts or the need to dip into emergency reserves.
“We’re not alone,” Rivera-Vandermyde said. “Frankly, some of our peers are facing bigger gaps, but we’ve done some important foundational and strategic work that will help us weather this storm. I’m proud of the progress we’ve made.”
Over the past few years, the city organization has increased efforts to align spending with key priorities and desired outcomes; sought to address an over-reliance on dedicated funding, passed by taxpayers for specific purposes; updated many fiscal procedures; and implemented a modern-day financial management system.
Boulder City Council, last year, identified the creation of a Long-Term Financial Strategy as a top priority. The strategy, under development, could include new revenue sources, such as an increase in some fees, as well as new or more flexible taxes. The city has partnered with an independent survey company to gauge potential voter reaction to two potential November 2025 ballot measures.
At the same time, Boulder leaders recognize that bringing in more money is not the only solution.
“We have very generous voters, but residents, businesses and visitors are also experiencing financial pressures,” Rivera-Vandermyde said. “We need to have a serious conversation about what priorities matter most – and the level of service our community expects us to achieve.”
The city is planning a series of engagement opportunities later this year, inviting interested community members to learn more about the city’s budget and provide feedback to inform future spending decisions.
More information about the Fund our Future initiative is available on the city’s website. Additional details are available on the Long-Term Financial Strategy project webpage