42-4-1102. Altering of speed limits.
(1) (a) Whenever the department of transportation determines upon the basis of a traffic investigation or survey or upon the basis of appropriate design standards and projected traffic volumes in the case of newly constructed highways or segments thereof that any speed specified or established as authorized under CRS 42-4-1101 to 42-4-1104 is greater or less than is reasonable or safe under the road and traffic conditions at any intersection or other place or upon any part of a state highway under its jurisdiction, said department shall determine and declare a reasonable and safe speed limit thereat which shall be effective when appropriate signs giving notice thereof are erected at such intersection or other place or upon the approaches thereto; except that no speed limit in excess of seventy-five miles per hour shall be authorized by said department.
(2) Whenever county or municipal authorities within their respective jurisdictions determine upon the basis of a traffic investigation or survey, or upon the basis of appropriate design standards and projected traffic volumes in the case of newly constructed highways or segments thereof, that any speed specified or established as authorized under CRS 42-4-1101 to 42-4-1104 is greater or less than is reasonable or safe under the road and traffic conditions at any intersection or other place or upon any part of a street or highway in its jurisdiction, said local authority shall determine and declare a reasonable and safe speed limit thereat which shall be effective when appropriate signs giving notice thereof are erected at such intersection or other place or upon the approaches thereto. No such local authority shall have the power to alter the basic rules set forth in CRS 42-4-1101 (1) or in any event to authorize by resolution or ordinance a speed in excess of seventy-five miles per hour.
(3) Local municipal authorities within their respective jurisdictions shall determine upon the basis of a traffic investigation or survey the proper speed for all arterial streets and shall declare a reasonable and safe speed limit thereon which may be greater or less than the speed specified under CRS 42-4-1101 (2) (b) or (2) (c). Such speed limit shall not exceed seventy-five miles per hour and shall become effective when appropriate signs are erected giving notice thereof. For purposes of this subsection (3), an "arterial street" means any United States or state-numbered route, controlled-access highway, or other major radial or circumferential street or highway designated by local authorities within their respective jurisdictions as part of a major arterial system of streets or highways.
(4) No alteration of speed limits on state highways within cities, cities and counties, and incorporated towns shall be effective until such alteration has been approved in writing by the department of transportation. Upon the request of any incorporated city or town having a population of five thousand or less, the department of transportation shall conduct any traffic investigation or survey that is deemed to be warranted for determination of a safe and reasonable speed limit on any street or portion thereof that is a state highway. Any speed limit so determined by said department shall then become effective when declared by the local authority and made known by official signs conforming to the state traffic control manual.
(5) Whenever the department of transportation or local authorities, within their respective jurisdictions, determine upon the basis of a traffic investigation or survey that a reduced speed limit is warranted in a school or construction area or other place during certain hours or periods of the day when special or temporary hazards exist, the department or the concerned local authority may erect or display official signs of a type prescribed in the state traffic control manual giving notice of the appropriate speed limit for such conditions and stating the time or period the regulation is effective. When such signs are erected or displayed, the lawful speed limit at the particular time and place shall be that which is then indicated upon such signs; except that no such speed limit shall be less than twenty miles per hour on a state highway or other arterial street as defined in subsection (3) of this section nor less than fifteen miles per hour on any other road or street, nor shall any such reduced speed limit be made applicable at times when the special conditions for which it is imposed cease to exist. Such reduced speed limits on streets which are state highways shall be subject to the written approval of the department of transportation before becoming effective.
(6) In its discretion, a municipality, by ordinance, or a county, by resolution of the board of county commissioners, may impose and enforce stop sign regulations and speed limits, not inconsistent with the provisions of CRS 42-4-1101 to 42-4-1104, upon any way which is open to travel by motor vehicles and which is privately maintained in mobile home parks, when appropriate signs giving notice of such enforcement are erected at the entrances to such ways. Unless there is an agreement to the contrary, the jurisdiction ordering the regulations shall be responsible for the erection and maintenance of the signs.
(7) Any powers granted in this section to county or municipal authorities may be exercised by such authorities or by any municipal officer or employee who is designated by ordinance to exercise such powers.
What does all this mean? A state, county or municipal department of transportation may not arbitrarily set a speed limit - there must be a survey as a basis