A budget shortfall of up to $10 million is putting Boulder in a bind.

The city is entering a hiring freeze for most vacant positions through the end of the year, it announced in a Friday news release. Additionally, city departments have been asked to find ways to underspend for the rest of the year, and it’s unlikely there will be budget increases or new positions in 2026.

The city estimates that about 85 openings could be subject to this freeze, city spokesperson Sarah Huntley told the Daily Camera.

Exceptions will only be made to critical roles, such as those necessary for public safety or water quality. The city still plans to fill an opening for a new transportation director, Huntley said. All exceptions to the freeze will require approval from City Manager Nuria Rivera-Vandermyde.

“We do not take this step lightly, but we, like many other local governments, are facing challenging conditions,” Rivera-Vandermyde said in Friday’s news release. “We have a responsibility to ensure we can fulfill our obligations to serve our community within a balanced budget.”

Huntley said the city has around 120 vacant full-time equivalent positions open and that written or verbal offers have been made to candidates for 35 of those. Any accepted offer will be honored, Huntley added.

Driving this decision is a sharp drop in tax revenues. As Huntley bluntly said, “People are not spending as much money.”

While Boulder’s 2025 budget was already based on “moderately conservative projections,” according to the release, the city has seen revenue flatten more from the end of 2024 through the early months of this year. Sales and use taxes are the city’s primary source of revenue, and the city’s General Fund is under the most stress, the news release said.

The city has seen lower sales and property taxes than anticipated, the latter of which has been driven by caps set by recent bills passed by the Colorado Legislature. The city also said that sales taxes on marijuana and e-cigarettes are down. The city’s utility franchise fee has also declined.

While not a major factor, Huntley added that the city is closely watching the situation with the Trump administration possibly pulling various sources of federal funding. At this time, the city is not aware of any.

“(T)he city will evaluate cost savings proposals from every department, with a goal of reducing spending while preserving essential functions and minimizing disproportionate impacts,” the release said.

Stormy skies have been looming over Boulder for some time. The Boulder City Council in May heard from economic experts Brian Lewandowski and Richard Wobbekind of the Leeds School of Business, who expected an impending recession and financial fallout should the Trump administration make sweeping federal cuts that could harm research and development in Boulder.

“The president’s budget I think puts a lot of risk on places like Boulder with federal spending at the labs and universities,” Lewandowski said at the May 10 meeting. “I think there’s more downside risk than upside.”

A tight 2025 budget has been on the horizon for a while.

Boulder anticipated such in 2024 when the City Council was told of slowing retail activity and commercial vacancy rates.

The news release concluded that the city plans to hold a “series of engagement opportunities” about the budget and for feedback on future spending decisions.