Agenda Date: 06/10/2025
Subject:
Title
Potential Ballot Question Adjusting the City’s Indebtedness Cap
Body
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From: |
James L. Becklenberg, City Manager |
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Prepared by: |
Kathleen Osher, Deputy City Manager |
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Presentations: |
Kathleen Osher, Deputy City Manager |
PURPOSE:
Discussion of a potential ballot question to the registered electors of the City of Littleton, Colorado regarding an adjustment to the City’s indebtedness cap identified in the City Charter.
LONG-TERM OUTCOME(S) SERVED:
Vibrant Community with a Rich Culture; Robust and Resilient Economy; Safe Community
DISCUSSION:
During the March 14-15, 2025, retreat, Council discussed priorities for capital investments and the potential use of debt. While the City has made progress in addressing deferred maintenance, a growing backlog would benefit from accelerated action through debt. During that retreat discussion, Council noted that while the City may need significant capacity for debt financing, the indebtedness cap identified in the City’s charter could be a hinderance to addressing needed capital and operating investment in the future.
City Charter in Section 89. General Obligation Bonds, states that: “the total outstanding general obligation indebtedness of the City, other than for water and/or sewer bonds, shall not at any time exceed three and seven-tenths percent of the assessed valuation of the taxable property within the city as shown by the last preceding assessment for tax purposes.”
C.R.S. § 31-15-302 sets forth general indebtedness caps for municipalities at three percent (3%) of the actual value of the taxable property in the municipality which differs from the City’s Charter which caps indebtedness at three and seven-tenth percent (3.7%) of the assessed value.
The difference between using “actual” value as set forth by state law as the basis and “assessed value” as set forth in the ity’s Charter as the basis is a significant amount. Three and seven-tenths percent (3.7%) of “assessed value” equates to roughly $46 million bonding capacity subject to voter approval. Conversely, the calculation for three percent (3.0%) of actual value would be approximately $290 million subject to voter approval.
Staff performed a comparative analysis that includes Littleton’s nine peer cities - Arvada, Centennial, Englewood, Greenwood Village, Lakewood, Northglenn, Parker, Westminster, and Wheat Ridge. The limit not to exceed three and seven-tenths percent of the assessed valuation of the taxable property is generally out of line with other peer cities. Most of Littleton’s peer cities set their general obligation indebtedness limit at three percent of actual valuation of the taxable property.
During the April 8, 2025, study session, Council renewed their interest in exploring an adjustment to the City’s indebtedness cap identified in the City Charter as well as forming a Charter Review Committee. Staff presented an overview of the Committee and shared the timeline associated with potential ballot measures:
• August 19, 2025- last meeting day for council to refer ballot measures on first reading without convening a special meeting
• September 2, 2025- last meeting day for council to refer ballot measures on second reading and public hearing without convening a special meeting
• September 5, 2025 - last day for the clerk to certify ballot content to the county/ies
Given this timeline, City Council direction is needed to proceed with a ballot question on the November 2025, ballot, or to refer this question to the Charter Review Committee for its consideration and potential referral to the City Council for a future ballot.
If Council were interested in bringing a question to our registered electors regarding debt limits to more align with neighboring communities and state law, staff believes that the following question would be appropriate: “Shall there be an amendment to the Littleton City Charter Section 89 to limit the general obligation indebtedness cap from three and seven-tenths percent (3.7%) of assessed value to three percent (3.0%) of actual value of the taxable property, as set forth in state law.”
Timing factors for Council’s consideration include:
• Placing the question on the November 2025 ballot would be proactive and would allow for the City to more ready to issue a higher level of general obligation debt in the future when it is needed.
• November 2025 constrains the schedule to address the limited public understanding of need and rational
• City has enough debt capacity for currently identified project priorities; next issue likely not needed for 3-5 years
• A future year could increase public understanding of need and rationale
• Facility assessment report anticipated in August 2025
• Informal community discussions suggest the need is not clearly understood
• Public education initiative could begin: Summer 2025 - 2026
• Charter Review Committee Report due in early 2026; could provide important citizen-driven basis for change
In discussion with the City’s past opinion research consultant, Todd Vitale, Pulse Decision Science, he emphasized the need to clearly identify a challenge or problem that voters could address. He cautioned staff that previous City efforts began with focus groups and interviews to determine the baseline of understanding so that the opinion research survey can test key messages. Opinion research will help gauge citizen priorities, impressions of local government, opinions about potential solutions, sensitivity to new taxes, and other relevant issues that will help messaging.
BACKGROUND:
The City of Littleton created its first comprehensive Capital Improvement Plan (CIP) in 2024. This plan provides a strategic framework to administer and implement projects and equipment acquisitions across the organization. The CIP identifies over 175 projects in the 5-year horizon of the plan, with $300 million in identified funding and another $158 million in needs without an identifiable funding source.
The source of funding for the CIP combines the City’s capital improvement sales tax (commonly referred to as 3A), grants, and in some cases general funds, but the unfunded and emerging projects identified by ongoing assessments such as the facilities assessment report will require additional funding and could be accelerated through debt.
Prior Actions or Discussions
• March 14, 2025 - City Council Retreat Discussion of Capital Investment Priorities and Potential Debt Tools
• April 8, 2025 - Council Study Session on Creation of the Charter Review Committee and Potential Ballot Questions
FISCAL IMPACTS:
Conducting opinion research is estimated at $20,000 per survey.
STAFF RECOMMENDATION:
Staff recommends identifying the indebtedness cap as an item for review by the Charter Review Committee.
ALTERNATIVES:
On April 15, 2025, City Council approved Resolution 39-2025: The creation of a Charter Review Committee to perform a comprehensive review of all charter sections and make recommendations to council for amendments and deletions; it has been more than 10 years since a Charter Review Committee was convened. The indebtedness cap could be analyzed by the CRC and determined if it has both merit and priority for voter consideration.