2D: Utility Occupation Tax Extension and Repurpose

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illustration of upcoming election


Boulder voters will consider five ballot measures on the Nov. 3, 2020, election, including this one. Use the form on this page to ask the city factual questions about this ballot measure. We will answer questions submitted through Oct. 16.


Overview

Voters will decide whether to extend the existing tax on electricity bills to fund projects, pilots and programs that arise from the potential partnership with Xcel Energy. The tax, called the Utility Occupation Tax, is charged on electricity bills, raises about $2 million dollars per year and currently funds the city’s efforts to create a local electric utility (municipalization).

If both the franchise agreement and Utility Occupation Tax extension pass, the city would repurpose municipalization funding to support the Xcel projects, programs and pilots under the new Xcel partnership. Learn more on the city’s website.

Ask questions about the Utility Occupation Tax extension or the larger settlement package on this page.


Ballot Language

Utility Occupation Tax

Without raising the tax rate shall the existing Utility Occupation Tax, which in 2021 and 2022 will be in the amount of $2,076,181, be extended from a current expiration date of December 31, 2022 to December 31, 2025 and be repurposed to pay all costs associated with the formation of a municipal electric utility and to be used to fund projects, pilots, initiatives and research that support the city's clean energy goals in the context of the city's racial equity goals and the community's commitment to the Paris Climate Agreement such as:

  • Providing energy-related assistance to disadvantaged members of the community, including support for utility bill payments and access to renewable energy;
  • Improving system reliability and modernizing, and supporting clean energy-related businesses, including, without limitation, new approaches in electrification of buildings and transportation, enhancement of resilience;
  • Implementing a partnership agreement with Public Service Company of Colorado; and
  • Increasing access to energy efficiency and renewable energy solutions

Only if a majority of registered electors approve a Franchise Agreement with Public Service Company of Colorado at the November 3, 2020 Election,

And shall the increased and extended portion of the tax be subject to the same terms and conditions as the original tax and all earnings thereon (regardless of amount) constitute a voter approved revenue change, and an exception to the revenue and spending limits of Article X, Section 20 of the Colorado Constitution?

FOR THE MEASURE ____ AGAINST THE MEASURE ____



Boulder voters will consider five ballot measures on the Nov. 3, 2020, election, including this one. Use the form on this page to ask the city factual questions about this ballot measure. We will answer questions submitted through Oct. 16.


Overview

Voters will decide whether to extend the existing tax on electricity bills to fund projects, pilots and programs that arise from the potential partnership with Xcel Energy. The tax, called the Utility Occupation Tax, is charged on electricity bills, raises about $2 million dollars per year and currently funds the city’s efforts to create a local electric utility (municipalization).

If both the franchise agreement and Utility Occupation Tax extension pass, the city would repurpose municipalization funding to support the Xcel projects, programs and pilots under the new Xcel partnership. Learn more on the city’s website.

Ask questions about the Utility Occupation Tax extension or the larger settlement package on this page.


Ballot Language

Utility Occupation Tax

Without raising the tax rate shall the existing Utility Occupation Tax, which in 2021 and 2022 will be in the amount of $2,076,181, be extended from a current expiration date of December 31, 2022 to December 31, 2025 and be repurposed to pay all costs associated with the formation of a municipal electric utility and to be used to fund projects, pilots, initiatives and research that support the city's clean energy goals in the context of the city's racial equity goals and the community's commitment to the Paris Climate Agreement such as:

  • Providing energy-related assistance to disadvantaged members of the community, including support for utility bill payments and access to renewable energy;
  • Improving system reliability and modernizing, and supporting clean energy-related businesses, including, without limitation, new approaches in electrification of buildings and transportation, enhancement of resilience;
  • Implementing a partnership agreement with Public Service Company of Colorado; and
  • Increasing access to energy efficiency and renewable energy solutions

Only if a majority of registered electors approve a Franchise Agreement with Public Service Company of Colorado at the November 3, 2020 Election,

And shall the increased and extended portion of the tax be subject to the same terms and conditions as the original tax and all earnings thereon (regardless of amount) constitute a voter approved revenue change, and an exception to the revenue and spending limits of Article X, Section 20 of the Colorado Constitution?

FOR THE MEASURE ____ AGAINST THE MEASURE ____


CLOSED: The city closed this Q&A on Oct. 16.

Under the Fair Campaign Practices Act, the city is limited to the information we can provide during election season. We will not provide opinion or analysis, but we can provide factual information in response to specific questions to help inform your decisions. We will answer questions submitted through Oct. 16. 

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    Is this repurposing the tax increase or is it the franchise fee in the franchise that is the increase? Doesn’t the pair increase our cost for electricity?

    Tom asked over 3 years ago

    Thanks for the question, Tom. 

    No, the cost for electricity will not increase as a result of passing the Franchise and the Utility Occupation Tax. 

    Currently, the Utility Occupation tax serves two functions:

    1. Raising about $4.7 million per year for the city's general fund. If the franchise agreement passes, this portion will be replaced by the franchise fee. 
    2. Raising about $2 million per year for municipalization funding. If the Utility Occupation Tax extension passes, this funding would go to projects and programs that arise from the city's partnership with Xcel Energy. 

    If both measures pass, there will be no net impact to customer bills. 

    relationship to franchise fee,tax rate,customer bills
    relationship to franchise fee tax rate customer bills
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    Asked and answered: Does the repurposed UOT proposal conflict with the franchise agreement, by which the city agrees not to impose any kind of occupation tax? If the franchise question passes and the UOT issue passes in November, and the UOT is supposed to end, would collection of the repurposed portion of the UOT be permitted? And if so, how would it be collected? On Xcel customers’ bills, like the UOT? ANSWER: Per section 4.3 of the franchise, the proposed UOT extension does not conflict with the franchise. "Notwithstanding anything in this Section to the contrary, the City reserves the right to adopt and implement lawful taxes or fees to fund city energy related projects."

    Deborah asked over 3 years ago

    Thank you for posting this, Deborah.  

    Per section 4.3 of the franchise, the proposed UOT extension does not conflict with the franchise. "Notwithstanding anything in this Section to the contrary, the City reserves the right to adopt and implement lawful taxes or fees to fund city energy related projects."

    If passed, the extended UOT would continue to be collected on customer Xcel bills.

    relationship to franchise agreement,tax collection
    relationship to franchise agreement tax collection
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    What were the Utility Occupation Tax rates for 2011 through 2020? What will be the UOT rates for 2021 through 2025 under this proposed extension? I am also curious how the rate is set each year? Thanks,

    1973CUGrad asked over 3 years ago

    The Utility Occupation Tax rate is calculated each year as follows:

    1. Boulder provides Xcel the total amount of occupation tax to be collected for the year.
      1. Chapter 3-13 of the Boulder Revised Code, 1981 defines the Utility Occupation Tax revenue requirements.
      2. The 2012-2019 revenue collections, and 2020-2022 projected revenues, set aside to fund the municipalization project are summarized in the July 21 City Council Packet (pages 468-474).
      3. Sheets 126, 126A, 126B in the Xcel Electric Tariff provide additional details
    2. Xcel forecasts the expected total electric revenue from the city for the year.
    3. The total occupation tax is divided by the total expected electric revenue for the year to set the occupation tax rate to be collected on each bill.
    4. Amounts for 2016-2020:
      1. 2016: 3.93%
      2. 2017: 3.55%
      3. 2018: 9.27%
      4. 2019: 7.33%
      5. 2020: 4.71
    5. The 2023-2025 revenue collections to fund the municipalization project are consistent with the 2020-2022 projections of an annual $2,076,181 contribution.
    6. If the franchise agreement is approved by voters, the general fund portion Utility Occupation Tax would no longer be collected.  It will be replaced by a franchise fee.
    tax rates
    tax rates
Page last updated: 06 Oct 2020, 02:41 PM