25CA1984 Save South v Boulder 08-20-2026 COLORADO COURT OF APPEALS
Court of Appeals No. 25CA1984 Boulder County District Court No. 25CV30273 Honorable Michael Kotlarczyk, Judge
Save South Boulder, Margaret Lecompte, Ann Harlin Savage, and Steven Telleen,
Plaintiffs-Appellants, v. The City of Boulder, Colorado and The City Council for the City of Boulder, Defendants-Appellees.
JUDGMENT AFFIRMED
Division III
Opinion by JUDGE KUHN
Freyre and Johnson, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced August 20, 2026
Weiner & Cording, Randall M. Weiner, Annmarie Cording, Boulder, Colorado, for Plaintiffs-Appellants
Teresa Taylor Tate, City Attorney, Luis A. Toro, Senior Counsel, Boulder, Colorado; Kutak Rock LLP, Thomas W. Snyder, Denver, Colorado, for Defendants-Appellees
Rebecca Sopkin, Susan Canny, Lakewood, Colorado, for Amicus Curiae Tabor Foundation
¶1 Plaintiffs, Save South Boulder, Margaret Lecompte, Ann Harlin Savage, and Steven Telleen (collectively, Save South), appeal the district court’s entry of summary judgment in favor of defendant, the City of Boulder. We affirm.
I. Background
¶2 In March 2025, Boulder adopted Ordinance 8690. Boulder, Ordinance 8690 (Mar. 6, 2025). Ordinance 8690, an emergency ordinance, authorized Boulder’s Stormwater and Flood Management Utility Enterprise (stormwater enterprise) to issue $66 million in flood management revenue bonds to fund a flood management project (project) on South Boulder Creek. The project included the construction of an eighteen-to-thirty-foot-tall dam and a spillway. The bonds were to be paid off by a Stormwater and Flood Management Fee (stormwater fee) billed to customers of Boulder’s sewer and water system. See Ordinance 8690, § 1.02; Boulder Rev. Code § 4-20-45.
¶3 Shortly after Ordinance 8690 was enacted, Save South, “a coalition of citizens primarily residing in south Boulder,” sued Boulder. It alleged that the project would subject many of its members to “adverse effects of the [project’s] flood control
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developments and the aesthetic deficits of the [s]pillway and [d]am.” Save South also argued that the fee was actually a tax subject to the Taxpayer’s Bill of Rights (TABOR), the stormwater enterprise is not an enterprise under TABOR, and Ordinance 8690 was improperly adopted by emergency decree because no emergency existed at the time it was adopted.
¶4 Two weeks later, Boulder moved for summary judgment. Among other things, Boulder argued that the fee was not a tax subject to TABOR, the stormwater enterprise met the definition of a TABOR enterprise, and the court could not review whether an emergency existed when Ordinance 8690 was passed.
¶5 The district court ultimately granted Boulder’s motion for summary judgment. The court concluded that Ordinance 8690 was not the enabling statute for the stormwater fee, the stormwater fee was not a tax subject to TABOR, the stormwater enterprise is a valid TABOR enterprise, and Save South “failed to establish a genuine issue of material fact that would allow the [c]ourt to second guess Boulder’s emergency declaration.”
¶6 Save South now appeals.
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II. Analysis
¶7 Save South contends that the district court erred by concluding that (1) Ordinance 8690 didn’t impose a tax subject to TABOR; (2) the stormwater enterprise meets TABOR’s enterprise definition; and (3) Save South didn’t establish that there was a genuine issue of material fact regarding bad faith. We address each contention in turn.
A. Applicable Law and Standard of Review
¶8 In 1992, Colorado voters adopted TABOR, amending the Colorado Constitution. Colo. Union of Taxpayers Found. v. City of Aspen, 2018 CO 36, ¶ 16; Colo. Const. art. X, § 20. TABOR “limit[s] the legislative taxing power of the state and local governments by requiring that any new tax . . . receive voter approval prior to implementation.” Colo. Union of Taxpayers Found., ¶ 2. “TABOR applies to ‘districts,’ which are defined as the ‘state or any local government.’” Id. at ¶ 17 (quoting Colo. Const. art. X, § 20(2)(b)). However, TABOR doesn’t apply to enterprises. TABOR Found. v. Colo. Bridge Enter., 2014 COA 106, ¶ 48. Under TABOR, an “enterprise” is defined as “a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual
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revenue in grants from all Colorado state and local governments combined.” Id. at ¶ 49 (quoting Colo. Const. art. X, § 20(2)(d)).
¶9 To determine whether a government implemented a fee or a tax subject to TABOR, we consider three factors. Id. at ¶ 22. “First, we review the language of the enabling statute.” Id. at ¶ 23. Second, we analyze the primary purpose for which the money was raised, and not “the manner in which it is ultimately spent.” Id. at ¶ 24. And third, we look to the practical realities of the charge and consider “whether there is a reasonable relationship between the direct or indirect cost to the government of providing the product or activity assessed and the amount being charged.” Colo. Union of Taxpayers Found., ¶ 27. This test allows us to determine whether a charge raises revenue for general government spending, and is therefore a tax, or if the charge is designed to defray the costs of a particular service and is therefore a fee.
¶ 10 “We review de novo a trial court’s grant of summary judgment.” Huber v. Colo. Mining Ass’n, 264 P.3d 884, 889 (Colo. 2011). We also review “a trial court’s legal conclusions concerning the interplay of TABOR and related statutes de novo.” TABOR Found., ¶ 18.
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B. Ordinance 8690 Didn’t Implement a Tax Subject to TABOR 1. Ordinance 8690 Is Not the Enabling Statute
¶ 11 Save South contends that Ordinance 8690 is the enabling statute that imposed a tax on Boulder voters. More specifically, Save South argues that the “additional fees” generated to support the project constitute a tax. Accordingly, they assert that Boulder should not have implemented Ordinance 8690 without first obtaining voter approval. See Colo. Union of Taxpayers Found.,
¶ 17. Save South therefore asks us to conduct a TABOR analysis on the “additional fees.”
¶ 12 Boulder, on the other hand, argues that Ordinance 8690 is not the appropriate enabling statute for us to consider. Instead, Boulder argues that the stormwater fee “is not new” and was in fact implemented in the 1980s. So Boulder claims that we should examine the stormwater fee under TABOR instead. We agree, in part, with Boulder.
¶ 13 Boulder passed Ordinance 8690, which authorized the issuance of revenue bonds through the stormwater enterprise. But the ordinance doesn’t impose any charge on its own. Instead, the costs of the revenue bonds are to be paid “solely out of the [n]et
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[i]ncome derived from the Fee.” Ordinance 8690, § 2.05. And Ordinance 8690, section 1.02(a), defines “Fee” as “the Stormwater and Flood Management Fee billed to customers of the City’s water and sewer systems pursuant to [s]ection 4-20-45, [Boulder Rev. Code].”
¶ 14 Therefore, we don’t agree that Ordinance 8690 imposes a new charge to pay for the bonds, as Save South contends.1 It instead utilizes an already existing charge — the stormwater fee. Thus, we conclude that we must review the existing stormwater fee ordinance — as modified by Ordinance 8690 — to determine whether Boulder has imposed a tax or a fee.
1 Save South also argues in the reply brief that “[e]ven if not a new
tax, the Ordinance authorized a ‘tax policy change directly causing a net tax revenue gain to any district.’” (Quoting Colo. Const. art. X, § 20(4)(a)). Save South further argues that because Ordinance 8690 allows the stormwater fee to be used “in a manner not previously authorized,” “it is a new tax policy and must be voted on.” This is a distinctly different argument from Save South’s new tax argument. And “[w]e do not consider arguments raised for the first time in a reply brief.” City of Westminster v. Centric-Jones Constructors, 100 P.3d 472, 480 (Colo. App. 2003). Therefore, we do not consider it further.
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2. Label and Stated Purpose
¶ 15 To determine whether Boulder enacted a tax or a fee, we must first “review the language of the enabling statute,” TABOR Found., ¶ 23, and examine “the government’s stated purpose and the label that the government gives the charge,” Colo. Union of Taxpayers Found., ¶ 27. We do this to determine whether the government intended the charge to “raise revenue for the general expenses of government,” in which case it is a tax, id. at ¶ 20, or to defray the costs of “providing a service or regulating an activity under that scheme,” in which case the charge is a fee, id. at ¶ 26. Though the government may mislabel a charge, we also cannot ignore legislative intent. TABOR Found., ¶ 30.
¶ 16 Save South contends that the stated purpose of Ordinance 8690 is to raise revenue for the “first phase” of the project. It argues that the language of the ordinance demonstrates that the revenue from the charge will be used for general utility purposes. For its part, Boulder argues that the purpose of the stormwater fee — as expressed in the municipal code authorizing the fee — is to fund “the construction, operation, maintenance and replacement of the stormwater and flood management utility.” Boulder Rev. Code
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§ 11-5-9(b). This language, Boulder further argues, “is virtually dispositive that the [stormwater fee] is not a tax.”
¶ 17 Boulder enacted the stormwater fee in 1983. Owners of “detached residences,” “attached single unit metered residences,” and “owners of all other parcels of land on which any improvement has been constructed” are required to pay a monthly fee. Boulder Rev. Code § 4-20-45(a)-(b). As noted, the stated purpose of the stormwater fee is “for the construction, operation, maintenance and replacement of the stormwater and flood management utility.” Boulder Rev. Code § 11-5-9(b). The purpose is not, therefore, to raise funds for general government expenses, but to defray the cost of stormwater and flood management services for Boulder residents.
¶ 18 Further, section 11-5-9(b) of the city code labels the charge as a fee. While labeling a charge a fee does not necessarily make it so, Colo. Union of Taxpayers Found., ¶ 27, we cannot ignore Boulder’s legislative intent in enacting the charge, see TABOR Found., ¶ 30 (holding that while the General Assembly’s declaration that a charge was a fee didn’t make it so, the court “cannot ignore the stated legislative intent”).
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¶ 19 Ordinance 8690 changes some of the way that the stormwater fee functions. Section 5.03 of the ordinance requires that the stormwater fee first be used to pay for the operation and maintenance expenses of Boulder’s “Stormwater and Flood Management Utility System.”2 It then permits interest and principal payments for the bonds that Boulder used to fund the project. Ordinance 8690, §§ 5.04-5.05. After these costs were paid, any remaining revenue from the stormwater fee could be used for the purchase of any outstanding bonds, the prior redemption of any outstanding bonds, the “repair, enlargement, extension, betterment and improvement of the Stormwater and Flood Management Utility System,” the operation and maintenance of the utility system, and “any other lawful purpose.” Id. § 5.11(a)-(e).
2 Save South also argues that the court erred when it found that the
stormwater and flood management project was “a local . . . flood control project that protects 3,500 people and 600 structures along South Boulder Creek, as opposed to generally funding the utility department’s operations.” Save South argues that while Ordinance 8690 requires that money from the stormwater fee first be used to pay for operations of the Stormwater and Flood Management Utility System, the overwhelming majority of the funds are intended to pay the bonds. This argument doesn’t alter our analysis because the project is part of the overall stormwater utility system’s operations.
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¶ 20 With the exception of the “any other lawful purpose” clause, the stated purpose of every other expenditure authorized by the ordinance is to defray the costs of providing flood and stormwater management services and to fund the stormwater project. We discuss the “any other lawful purpose” clause more fully below.
¶ 21 After reviewing the language of the enabling statute for the stormwater fee, as modified by Ordinance 8690, we conclude that the label and stated purpose of the charge show that Boulder did not intend for it to raise funds for general government purposes. Facially, therefore, the stormwater fee is not a tax.
3. Primary Purpose for Which the Money Was Raised
¶ 22 We next look to the primary purpose “for which the money is raised, not the manner in which it is ultimately spent.” TABOR Found., ¶ 24. We do this by “focus[ing] our core inquiry on the practical realities of the charge’s operation to determine . . . the charge’s primary purpose.” Colo. Union of Taxpayers Found., ¶ 27.
¶ 23 Save South contends that the district court erred by analyzing how the funds were to be spent rather than how they were raised. Boulder responds that the court “correctly determined the stormwater fee is primarily . . . generated for stormwater purposes.”
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¶ 24 In its order, the district court first acknowledged that it must look to the purpose for which the money was raised and not necessarily how it was ultimately spent. It then determined that both the city code and Ordinance 8690 “prioritize raising money for the purpose of operating and maintaining Boulder’s stormwater and flood water system.” And because this money is used to defray the costs of providing stormwater and flood water services, “the primary purpose for which the [stormwater fee] monies are raised is to fund the management of the city’s stormwater and flood water system.” Thus, the court properly analyzed the primary purpose for which the funds were raised.
¶ 25 After completing this analysis, the court then addressed Save South’s argument that Ordinance 8690 and the city code allow funds to be used for general government expenses. The court concluded that the stormwater fee still satisfies the applicable test because the ordinance only permits leftover funds to be spent for other purposes. Save South argues that the court’s analysis improperly focused on how the money would be spent rather than for what purpose it was raised.
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¶ 26 Save South’s argument is focused on the language in Ordinance 8690 that allows revenue from the stormwater fee to be used for general government purposes. Ordinance 8690, section 5.11, states that any funds remaining after Boulder pays for utility and bond expenses “shall be used for any one or any combination of the following purposes in any order.” One of the authorized purposes that the stormwater fee can be spent on under the ordinance is “any other lawful purpose of [Boulder].” Id. § 5.11(e). Save South argues that this purpose makes the charge a tax because it raises money for general government use. See Colo. Union of Taxpayers Found., ¶ 3.
¶ 27 When we review a city code, “we construe it using the same rules for interpreting statutes.” Mahaney v. City of Englewood, 226 P.3d 1214, 1217 (Colo. App. 2009). “Our primary task is to give effect to the drafters’ intent[] by looking to the code’s plain language.” Id. We construe the city code in a way “that gives consistent, harmonious, and sensible effect to all of its provisions.” Id. So “[i]f two provisions appear to be in conflict, we must attempt to construe them in a manner that avoids the conflict.” Id. And in
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the event we cannot avoid a conflict, “the more specific provision prevails over the general provision.” Id.
¶ 28 We agree with Save South that if the ordinance raised funds for “any lawful purpose,” that would pose a problem for its categorization as a fee. But that’s not how we read the municipal code as a whole.
¶ 29 The city code limits the use of the stormwater fee to services and facilities necessary for flood and stormwater management. Boulder Rev. Code § 11-5-10(a). The district court interpreted Ordinance 8690’s provision in section 5.11(e) allowing the fees to be used for “any other lawful purpose” as “allowing only for the other use of such funds that are not otherwise inconsistent with city laws.” We agree with the court’s conclusion on this point. The stormwater fee can be spent for “any other lawful purpose” that is consistent with the express limitations on its use for stormwater and flood management. Boulder Rev. Code § 11-5-10(a). This interpretation reads the city code and Ordinance 8690 consistently, harmoniously, and sensibly and permits Ordinance 8690 to raise funds in compliance with the limitations on the stormwater fee.
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¶ 30 Though we don’t perceive a conflict between Ordinance 8690 and the city code, we would reach the same conclusion if we did. Section 11-5-10(a)’s limitations on the use of the stormwater fee is the more specific provision, and it would prevail over section 5.11(e) of Ordinance 8690’s general language permitting revenue from stormwater fees to be used for “other lawful purpose[s].”
¶ 31 Given our interpretation of the ordinance’s language as only permitting the use of stormwater fee funds for flood and stormwater management purposes, we conclude the charge raises funds in exchange for a service, not for general governmental expenditures.
4. Reasonable Relationship Between the Charge and the Cost of Service
¶ 32 Finally, we focus on the practical realities of the charge’s operation and consider whether “there is a reasonable relationship between the direct or indirect cost to the government of providing the product or activity assessed and the amount being charged.” Colo. Union of Taxpayers Found., ¶ 27.
¶ 33 Save South contends that there is “no reasonable relationship between the costs of the [p]roject and the [c]ustomers who will pay for it.” Boulder counters that the district court correctly found that
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the stormwater fee seeks to defray the costs of stormwater and flood management services for those who must pay the stormwater fee. We agree with Boulder for three reasons.
¶ 34 Section 11-5-10 of the Boulder city code includes the following:
(a) The stormwater and flood management utility shall hold all monies received by the city under this chapter in a separate account and make expenditures thereof only for the purpose of:
(1) Development review, administration, stormwater quality, inspection, construction, installation, repair, maintenance, improvement, replacement and construction of drainage facilities in the city and all other facilities necessary to adequately handle stormwaters and floods in the city; and
(2) The purchase of interests, including, without limitation, ownership and easements, in land that may be necessary to implement the purposes of this chapter, including, without limitation, land for installation and construction of drainage facilities that are reasonably required for the proper handling of stormwaters and floods in the city.
(b) The city may pledge stormwater and flood management fees collected under this
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chapter and those anticipated to be collected to the retirement of the principal and interest of revenue or general obligation bonds issued by the city for financing any of the activities set forth in subsection (a) of this section.
Boulder Rev. Code § 11-5-10(a)-(b).
¶ 35 First, revenue from the stormwater fee is held in a separate account from any other governmental revenue, and most importantly, Boulder’s general fund. See Boulder Rev. Code § 11-5-10(a) (“The stormwater and flood management utility shall hold all monies received by the city under this chapter in a separate account . . . .”); TABOR Found., ¶ 5 (holding that a charge was a fee because, among other reasons, the Colorado Bridge Enterprise had a separate account from the state’s general fund).
¶ 36 Second, the funds in the stormwater fees account are used “only for the purpose of” flood- and stormwater-related services like “construction, installation, repair, maintenance, [and] improvement.” Boulder Rev. Code § 11-5-10(a)(1). The city code also allows revenue from this account to be used for “the retirement of the principal and interest of revenue or general obligation bonds issued by the city for financing any of the activities set forth in
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subsection (a).” Boulder Rev. Code § 11-5-10(b) (emphasis added). So subsection (a) specifically limits the use of the funds to flood and stormwater services. See Colo. Union of Taxpayers Found., ¶ 26 (holding that if the “charge is imposed as part of a comprehensive regulatory scheme, and [its] . . . primary purpose . . . is to defray the reasonable direct and indirect costs of providing a service or regulating an activity under that scheme, then the charge is not raising revenue for the general expenses of government”).
¶ 37 Third, there is a reasonable relationship between the cost of the stormwater fee and the services provided. For a Boulder resident, the monthly stormwater fee depends on the type of parcel they own and the size of the parcel. Boulder Rev. Code § 4-20-45(a)-(b). For instance, if a resident owns a detached residence on a lot that is up to 15,000 square feet, they are subject to a $29.88 stormwater fee. Boulder Rev. Code 4-20-45(a). However, if a resident owns a similar residence on a parcel that is over 30,001 square feet, they must pay a $42.44 stormwater fee. Id. So there is a reasonable relationship between the cost of the stormwater fee and the flood and stormwater management services
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the stormwater enterprise provides because the fee charged depends on the size and type of parcel.
¶ 38 As for Ordinance 8690, Save South argues that while all Boulder residents are subject to the stormwater fee depending on their “lot size and the amount of impervious surface on their properties[,] . . . [i]mpervious surfaces through Boulder have no relationship with [the] creation of the South Boulder Creek flood risk, since the waters which create flooding along South Boulder Creek originate in the mountains far above [Boulder].” Save South also argues that only the “3,500 people and 600 structures that fall within the South Boulder Creek floodplain” will benefit from the project, and in fact, some of the plaintiffs will have increased flood risk, yet these nonbeneficiaries are subject to the fee.
¶ 39 While a subset of individuals and structures may benefit from this particular project, that doesn’t mean that there is no reasonable relationship between the stormwater fee and the flood and stormwater management services provided. This is a variation of the argument rejected in Colorado Bridge Enterprise, where the challenger “essentially contend[ed] that the service must be utilized only by those who must pay the charge or alternatively by all those
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who must pay the charge” in order to qualify as a fee. TABOR Found., ¶ 38. But as the division noted, “the supreme court has made it clear that even imposing a fee that generates revenues for street maintenance but not for any specific property does not support a conclusion that the charge is a tax, and not a fee.” Id.
¶ 40 Accordingly, it is not dispositive that the project will primarily benefit some individuals within the South Boulder Creek floodplain or that the project focuses on this floodplain area in particular. The proper question is whether the stormwater fee is reasonably related to the overall cost of providing flood and stormwater management and improvement services and is imposed on those who are reasonably likely to benefit from or use the service. See id. at ¶ 40. Here, revenue from the fee is used to maintain and improve the stormwater and flood management system as a whole, which benefits all Boulder residents, and it is charged to those residents.3
3 As noted above, this is the first phase of a multiphase stormwater
and flood management project. Therefore, while any individual improvement project might not directly benefit an individual fee payer, the next project or phase may benefit them but not their neighbor across town. See TABOR Found. v. Colo. Bridge Enter., 2014 COA 106, ¶ 38 (rejecting the argument that a service must be used only by those who pay a charge or by all who must pay the charge).
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We thus conclude that there is a reasonable relationship between the overall cost of providing the service and the fee.
¶ 41 Therefore, the practical realities of the stormwater fee’s operation support the conclusion that it is indeed a fee because the funds are kept separate from Boulder’s general fund, they are only used for flood and stormwater management services, and there is a reasonable relationship between the cost of the fee and those that are subject to it. Accordingly, we conclude that the stormwater fee — as modified by Ordinance 8690 — is a fee and not a tax subject to a TABOR vote.
5. A Fee Increase Doesn’t Create a Tax
¶ 42 Lastly, Save South contends that an increase in the stormwater fee creates a tax. We again disagree.
¶ 43 Save South cites MetroPCS California, LLC v. City of Lakewood, 2025 CO 53, to support its argument. In that case, the court held that “[t]he expansion of a tax to a new class of goods or activity may constitute a new tax.” Id. at ¶ 18. However, Ordinance 8690 doesn’t expand a tax, it modifies an existing fee. Moreover, the modification doesn’t expand the stormwater fee onto a new “class of goods or activit[ies].” Id. While the project will eventually increase
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the amount of the fee, the fee is still charged on the same basis and spent on projects related to flood and stormwater management services. And as Boulder points out, section 37-45.1-106(3), C.R.S. 2025, specifies that “a change in the rates charged by a district for its water activity enterprise services . . . shall not be deemed a tax.”4 So an increase in the stormwater fee does not convert the stormwater fee into a tax.
C. The Stormwater Enterprise Is an Enterprise Under TABOR
¶ 44 Save South contends that Boulder’s stormwater enterprise “falls outside the definition of a TABOR ‘enterprise.’” More specifically, it argues that the stormwater enterprise doesn’t constitute a TABOR enterprise because it “receives more than 10% of its revenues from charges that are ‘billed monthly to customers of the City’s sewer and water system.’” We disagree.
4 A “[w]ater activity enterprise” means “any government water
activity business owned by a district, which enterprise receives under ten percent of its annual revenues in grants from all Colorado state and local governments combined and which is authorized to issue its own revenue bonds pursuant to this article or any other applicable law.” § 37-45.1-102(4), C.R.S. 2025.
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¶ 45 As noted supra Part II.A, under TABOR, an “enterprise” is defined as “a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined.” TABOR Found., ¶ 49 (quoting Colo. Const. art. X, § 20(2)(d)). TABOR does not apply to enterprises. Id. at ¶ 48.
¶ 46 Boulder’s stormwater enterprise is defined as “the stormwater and flood management utility business owned by the city, which business receives under ten percent of its annual revenues in grants from all Colorado state and local governments combined and which is authorized to issue its own revenue bonds.” Boulder Rev. Code § 11-5-2. Based on the plain language of the ordinance, Boulder owns the stormwater enterprise, and the stormwater enterprise is authorized to issue revenue bonds. These criteria both align with TABOR’s definition of an enterprise. See TABOR Found.,
¶ 49.
¶ 47 However, Save South’s primary complaint is that the stormwater enterprise receives more than 10% of its revenue from Boulder. To support its argument, Save South cites one of Boulder’s Water Resources Advisory Board agenda item documents,
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which stated that “[r]evenues generated from the monthly utility bills are the largest revenue source for each utility,” including stormwater and flood management. These “utility bills” include the monthly stormwater fee. Save South argues that Boulder itself imposed the stormwater fee, so transferring the utility bill payments to the stormwater enterprise constitutes a “grant.” And because the revenue from “Boulder’s fee” is the “largest revenue source” for the stormwater enterprise, Save South argues that the enterprise receives more than 10% of its revenue from Boulder. We disagree.
¶ 48 A grant is “any direct cash subsidy or other direct contribution of money from the state or any local government in Colorado which is not required to be repaid.” § 24-77-102(7)(a), C.R.S. 2025. A grant does not, however, include “revenues resulting from rates, fees, assessments, or other charges imposed by an enterprise for the provision of goods or services by such enterprise.” § 24-77-102(7)(b)(II).
¶ 49 While Boulder does bill the stormwater fee on its utility bills, Boulder does not impose the stormwater fee. Instead, the
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stormwater enterprise imposes the stormwater fee.5 Boulder Rev. Code §§ 11-5-9, -10. Boulder simply transfers the stormwater fee revenue that it collects on the stormwater enterprise’s behalf. This does not constitute a grant under section 24-77-102(7)(a) because it is not a contribution of money from the city. Further, under section 37-45.1-102(2), grants do not include “public funds paid or advanced to a water activity enterprise by the state or a local governmental entity . . . in exchange for . . . services.” Therefore, because the transfer of revenue from the stormwater fee is not a money contribution from Boulder, and funds paid to the stormwater enterprise in exchange for services are not grants from the city, the
5 Save South also argues that Boulder “conceded in its [summary
judgment] briefing that ‘the [stormwater enterprise] does not impose service fees.” In Boulder’s motion for summary judgment, the city asserted that “the [stormwater enterprise] does not impose service fees; that is done by . . . [Boulder], of which the [stormwater enterprise] is a part.” However, counsel clarified during oral argument that while Boulder bills the fees to residents, the stormwater enterprise imposes the fee. The plain language of the ordinances supports this position. Thus, while the statements in the summary judgment motion may have been inartful, we conclude that they do not constitute a concession on this point.
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stormwater enterprise doesn’t receive more than 10% of its revenue from Boulder.6
¶ 50 Given all of this, we conclude that the stormwater enterprise is a valid enterprise within the meaning of TABOR.
D. Bad Faith
¶ 51 Finally, Save South contends that the district court erred by not requiring Boulder to show that there was no genuine dispute of material fact regarding Boulder’s bad faith in enacting Ordinance 8690 by emergency action. Instead, Save South argues, the court “put the burden on . . . [Save South] to demonstrate a disputed factual issue.” Boulder argues, however, that Save South did not initially allege bad faith and failed to present clear evidence of bad faith. More specifically, Boulder argues that Save South failed to
6 Save South cites Board of County Commissioners v. Grand Valley
Drainage District, Mesa County Case No. 16CV30317, in support of its contention that the stormwater enterprise is not an enterprise and that there’s no reasonable relationship between the fee and the cost. In that case, the district court had determined that the challenged fee was a tax and that it was imposed by the district, not the enterprise. And while it’s true that the court in that case concluded that there was no reasonable relationship between the fee and the cost of service, it did so based on the unique facts before it. Given these differences, we do not find this case persuasive.
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explain why giving the public more notice, having a later bond sale date than required, and relying on its interest rate reasoning for the emergency are considered bad faith. And Boulder contends that Save South failed to preserve the question “whether [the] emergency determination comported with [the city charter],” as Save South raised this issue “for the first time in their C.R.C.P. 59 motion to reconsider.”
1. Additional Background
¶ 52 Save South alleged in its complaint that Boulder acted “arbitrarily and capriciously” when it adopted Ordinance 8690 by emergency decree. It argued that the emergency procedure was inappropriate because “[t]here was no emergency.” In its motion for summary judgment, Boulder argued that whether an emergency existed “[was] not subject to judicial review.” In support of its argument, Boulder cited TCD North, Inc. v. City Council, in which a division of this court held that “[w]hether an ordinance is necessary for the immediate preservation of the public peace, health, or safety is a legislative and not a judicial question.” 713 P.2d 1320, 1323 (Colo. App. 1985).
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¶ 53 In Save South’s response to Boulder’s summary judgment motion, it noted that a legislative declaration of an emergency can be reviewed on appeal if there is a “showing of bad faith or fraud.” Save South then argued that Ordinance 8690 was enacted in bad faith because the city had been warned about “approving measures on an emergency basis” before, “Boulder noticed the emergency meeting [for] Ordinance 8690 over two weeks prior to the meeting,” Boulder didn’t issue the bonds between the time that the ordinance was enacted and the lawsuit was filed, and “fluctuating interest rates are a fact of business.”
¶ 54 The district court concluded that because Save South didn’t demonstrate “a genuine issue that the emergency declaration was fraudulent or in bad faith,” a “determination of emergency legislation is conclusive on judicial review” under Board of County Commissioners v. City of Lakewood, 813 P.2d 793, 795 (Colo. App. 1991).
2. Applicable Law and Standard of Review
¶ 55 Summary judgment is a “drastic remedy [that] denies litigants their right to trial and is never warranted except on a clear showing that there is no genuine issue as to any material fact.” Ginter v.
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Palmer & Co., 585 P.2d 583, 584 (Colo. 1978). “The moving party has the initial burden to show that there is no genuine issue of material fact.” AviComm, Inc. v. Colo. Pub. Utils. Comm’n, 955 P.2d 1023, 1029 (Colo. 1998). When the moving party meets its initial burden, the burden then shifts to the nonmoving party, who must “establish that there is a triable issue of fact.” Id. While the nonmoving party is “entitled to all favorable inferences that may be drawn from the undisputed facts,” id., the nonmoving party “may not rest upon the mere allegations or denials of the [moving] party’s pleadings, but[,] . . . by affidavits or [as] otherwise provided in this Rule, must set forth specific facts showing that there is a genuine issue for trial,” C.R.C.P. 56(e).
¶ 56 “We review de novo an order granting summary judgment.” McDonald v. Zions First Nat’l Bank, N.A., 2015 COA 29, ¶ 44.
3. Preservation
¶ 57 We must first determine whether Save South preserved this issue for appeal. Boulder argues that while Save South preserved the issue of whether the “Council’s determination to utilize its emergency procedure was fraudulent or made in bad faith,” it didn’t preserve the issue of whether the “emergency determination
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comported with [the city charter].” Save South argues that it preserved this issue in its response to Boulder’s summary judgment motion, “which raised a genuine issue of material fact on whether the City Council violated the [c]ity [c]harter in bad faith.”
¶ 58 “To properly preserve an argument for appeal, the party asserting the argument must present ‘the sum and substance of the argument’ to the district court.” Gebert v. Sears, Roebuck & Co., 2023 COA 107, ¶ 25 (quoting Madalena v. Zurich Am. Ins. Co., 2023 COA 32, ¶ 50).
¶ 59 Though Save South argues that it preserved this issue, it doesn’t make any argument in its briefing that the emergency declaration violated the city charter. Therefore, regardless of preservation, we decline to address this issue further. See Sanchez v. Indus. Claim Appeals Off., 2017 COA 71, ¶ 41 (declining to address underdeveloped arguments).
¶ 60 Both parties agree that whether Ordinance 8690 was enacted in bad faith is preserved.
¶ 61 We now turn to that question.
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4. Save South Didn’t Establish a Triable Issue Over Whether Ordinance 8690 Was Enacted in Bad Faith
¶ 62 As the moving party, Boulder had the burden to show that there was no genuine issue of material fact as to whether Ordinance 8690 was improperly enacted by emergency decree. Boulder satisfied its burden when it showed that the reason for the emergency was stated within Ordinance 8690, as required by the city charter. Further, Boulder argued that “[w]hether an ordinance is necessary for the immediate preservation of the public peace, health, or safety is a legislative and not a judicial question.” TCD N., Inc., 713 P.2d at 1323. The burden then shifted to Save South to establish that there was a triable issue of fact.
¶ 63 In response, Save South argued that there is an exception to the presumption that emergency declarations are not reviewable that applies when an ordinance was enacted in bad faith or fraudulently. Save South argued that Ordinance 8690 was enacted in bad faith for several reasons.
¶ 64 First, Save South argued that Boulder was “warned twice by courts for approving measures on an emergency basis.” Save South cites two cases in support of its argument, Fladung v. City of
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Boulder, 417 P.2d 787 (Colo. 1966), and McCray v. City of Boulder, 439 P.2d 350 (Colo. 1968). However, neither case held that the city of Boulder acted in bad faith. In Fladung, the court concluded that the charter’s requirements to pass an emergency measures were met, “but barely.” 417 P.2d at 789. In McCray, the court warned Boulder about “skirting close to invalidating ordinances by the indiscriminate invocation of the emergency provision, without giving the specifics as required in various city charters.” 439 P.2d at 388. Save South doesn’t explain how these sixty-year-old warnings — neither of which held that Boulder acted in bad faith — demonstrate that there was a triable issue of fact as to whether Boulder enacted Ordinance 8690 in bad faith.
¶ 65 Second, Save South argued that Boulder gave notice for the emergency meeting two weeks before it happened and that Boulder could have used the nonemergency process during that time. It also argued that Boulder didn’t issue the bonds between the time the ordinance was enacted and when Save South filed its lawsuit. But again, Save South doesn’t explain why Boulder giving a two-week notice before the emergency meeting constitutes bad faith. And Save South doesn’t explain why Boulder’s decision not to
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issue the bonds between March, when the ordinance was enacted, and April, when the lawsuit was filed, amounts to bad faith. To the contrary, as Boulder points out, “[I]t would have been foolhardy for [the] Council to schedule the bond sale sooner than thirty days after [Ordinance 8690] became effective, because litigation challenging the Bonds issuance could have been filed up to April 5, 2025.”
¶ 66 Finally, Save South argues that fluctuating interest rates are a part of business and that fluctuation is no reason for an emergency ordinance. Save South clearly disagrees that fluctuating interest rates are a valid reason to enact an ordinance by emergency decree. And perhaps under different facts, this circumstance could be a basis supporting the conclusion that a city acted in bad faith in enacting an ordinance on an emergency basis. But Save South doesn’t explain how fluctuating interest rates being part of business shows that Boulder enacted Ordinance 8690 in bad faith, especially in the context of a multi-million-dollar deal. Indeed, Save South’s disagreement, without more, doesn’t prove that Boulder acted in bad faith by relying on fluctuating interest rates as a basis for the emergency declaration.
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¶ 67 Therefore, we agree with the district court that Save South failed to “establish that there [was] a triable issue of fact,” and we conclude that the district court did not improperly shift the burden to Save South. See AviComm, Inc., 955 P.2d at 1029.
E. Attorney Fees
¶ 68 Boulder requests an award of attorney fees on appeal under section 13-17-102(4), C.R.S. 2025. It claims that Save South’s arguments are frivolous, groundless, and vexatious because Save South “knew at the time of filing their [c]omplaint . . . that the pendency of this litigation is delaying the issuance of the [b]onds, and therefore delay[ed] the launch of the Project.” Boulder further argues that the first factor of the test to identify a tax under TABOR was satisfied, Save South never refuted the supreme court’s holding in Zelinger v. City & County of Denver, 724 P.2d 1356 (Colo. 1986), Save South “ignored” statutes that the transfer of fees from a city to an enterprise doesn’t constitute a grant, and Save South alleged bad faith “only after Boulder pointed out the controlling law to them.”
¶ 69 Save South doesn’t present an argument against the award of fees; however, it notes that Boulder allegedly made the same
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argument to the district court, and Boulder’s argument was rejected. Instead of making an independent argument on appeal, Save South filed a document titled “Plaintiffs’ Notice of Supplemental Authority,” which included as an exhibit a transcript of the district court’s attorney fee hearing. This court’s rules permit a party to provide “pertinent and significant new authority, including legislation, [that] comes to a party’s attention after the party’s brief has been filed.” C.A.R. 28(i). However, a notice of supplemental authority under that rule is not an appropriate substitute for supplementing the record on appeal with a missing transcript. See C.A.R. 10(f). We do not consider Save South’s improper notice or its attached transcript in deciding this issue.
¶ 70 Section 13-17-102 permits a court to assess attorney fees when it determines that an action lacks substantial justification. An action lacks substantial justification if it is substantially frivolous, groundless, or vexatious. § 13-17-101.5(1), C.R.S. 2025. An action is substantially frivolous if “the proponent can present no rational argument based on the evidence or law in support of that claim.” Harmon Contractors, Inc. v. Carter & Burgess, Inc., 229 P.3d 282, 299 (Colo. App. 2009) (quoting W. United Realty, Inc. v. Isaacs,
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679 P.2d 1063, 1069 (Colo. 1984)). An action is substantially groundless if “the allegations in the complaint, while sufficient to survive a motion to dismiss for failure to state a claim, are not supported by any credible evidence at trial.” Id. at 300 (quoting W. United Realty, 679 P.2d at 1069). And “[a] vexatious claim or defense is one brought or maintained in bad faith, which includes conduct that is arbitrary, abusive, stubbornly litigious, aimed at unwarranted delay, or disrespectful of truth and accuracy.” Front Range Home Enhancements, Inc. v. Stowell, 172 P.3d 973, 976 (Colo. App. 2007). “Under section 13-17-102, an award of fees on appeal is appropriate only in clear and unequivocal cases . . . .” In re Estate of Shimizu, 2016 COA 163, ¶ 34.
¶ 71 We 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.
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¶ 72 We therefore deny Boulder’s request for attorney fees under section 13-17-102(4).
III. Disposition
¶ 73 The judgment is affirmed.
JUDGE FREYRE and JUDGE JOHNSON concur.