DENVER — Denver Mayor Michael Hancock submitted his 2021 budget proposal for the City and County of Denver Tuesday morning, and it included "significant and difficult" cuts, which he said are necessary to fill a large budget deficit.
They’re facing a $190 million budget shortfall for 2021.
"There's not very much further for us to go deeper without severely impacting our ability to deliver the services that we all count on as taxpayers," said Hancock.
The city made $220 million in cuts to the current 2020 budget in large part due to a decrease in tax revenue from decreased consumer spending due to the coronavirus, city leaders said in May. At that time, they announced that city employees would be required to take eight furlough days — five scheduled and three flexible — in 2020.
In 2021, workers will take between six and nine days, depending on their salary. Those include four dedicated days for everyone, and the rest are flexible.
Here’s the breakdown:
- Six days for those making under $51,999
- Seven days for those making 52,000 to 86,999
- Eight days for those making $87,000 and above
- Nine days for mayoral appointees
About 400 positions will be left vacant.
"There are others in our rec centers, in finance where we're going to be dealing with incrementally fewer staff and it's going to put an increased burden on other employees who are still here with the city," said Denver's Chief Financial Officer Brendan Hanlon, who noted it was the most challenging budget he's ever seen in his 20-year career.
The current budget forecast does not currently call for any layoffs, however, many city employees are taking extended furloughs due to the current financial situation. Employees in the arts and venues department have been hit particularly hard.
Earlier this month, it was announced that approximately 70 employees at Denver Arts and Venues face some level of furlough. Beginning at the end of the month, some will be furloughed full-time until at least the end of the year, while the rest will be furloughed part-time.
The 2021 budget proposal maintains contingency, reserves and an emergency fund to support the planning and resources needed to prepare the city to handle a potential surge of cases in the winter months, the potential distribution of a vaccine to the community, and funds continue to prioritize support for people most in need, including those experiencing homelessness, by investing in shelters, housing resources and other needed services.
In 2021, the budget includes the following funding related to COVID-19:
- $1.4 million to sustain mobile testing capability through the Wellness Winnie to deliver tests to the doorsteps of people who are homebound.
- $2.9 million toward public health inspectors to ensure businesses remain in compliance with public health safety measures that protect our community.
To close the budget gap, the city will implement $154 million in savings proposals that include:
- $39 million due to reduced hiring and holding more than 400 career service positions vacant.
- $14.5 million reduced General Fund support for the capital improvement program.
- $12 million generated by citywide furlough days.
- $9.6 million reduction in fleet replacement.
- $7 million through vacancies in sworn staff in police and fire due to smaller recruit classes.
- $7 million in technology equipment, project and licensing savings.
- $4.5 million from vacancies in the Sheriff Department.
- $3.2 million due to forecasted lower jail population continuing into 2021.
- $3.9 million of utility and facility maintenance savings.
- $2.3 million in reduced uniform overtime spending in safety agencies.
They plan to increase revenue through the following efforts:
- $3 million for court research fees (now at the same level as the state in terms of fees).
- $9 million through a property tax mills 0.448 for general fund (average impact of $14 per year for a medium family).
- $3 million through an online convenience fee.
Rebuilding the economy
To support the city’s economic recovery, the 2021 budget will begin the acceleration of the Elevate Denver bond program, where resources are already secured, by launching another $170 million in bond funded projects.
When coupled with the capital improvement program, the city will invest $478 million in capital program delivery through 2023 to support thousands of jobs for Denver residents, including job training opportunities to help people build careers in the skilled trades, and to provide opportunities for small and microbusinesses and women- and minority-owned businesses.
According to the city, the 2021 proposal manages the uncertainty of continuing public health and economic conditions with the obligation to serve the community and keep the city on a path toward rebuilding the local economy in a way that is sustainable and equitable.
While many places are seeing cuts, the city is investing in social services. The following areas will see increased funding:
- $187 million for Denver Human Services (DHS):
- That includes a $2 million increase to Temporary Assistance to Needy Families and eviction assistance and $1 million to increase for property tax refunds for families, seniors and people with disabilities. DHS will initiate work to increase eligibility to serve more families, seniors and people living with disabilities who own a home.
- $70 million for affordable housing and high-quality supportive housing and services for people experiencing homelessness through the Department of Housing Stability.
- That includes $5 million to operate a shelter off 48th Avenue to provide additional capacity to serve around 400 people experiencing homelessness in response to the public health emergency. The funding will support 24/7 operations with onsite services, housing connections and other support. About $1.5 million in funding is proposed for outreach efforts at encampments to help those experiencing homelessness access shelter, housing, medical care and other services.
- $2.9 million to continue the work of the innovative Health and Housing Social Impact Bonds (SIB) program.
Since inception, the program has helped more than 422 people exit the streets and the criminal justice system through supportive housing, with most successfully remaining in housing, the city said. The original SIB program contract ends in 2020m but the city will continue the investment in 2021 through the General Fund.
The 2021 budget also anticipates support for housing stability programs that help people stay in their homes, such as rent, utility and eviction assistance.
The 2021 budget supports a total of $78.1 million for youth programs, including:
- An additional $516,000 to fund community-driven youth programs and comprehensive strategies to promote and develop healthy youth and productive adults. The funds will be used to create a dedicated position to lead youth violence prevention and two popular community-led programs.
- $178,000 to continue the successful Safe Zone Pop Up Program which enlists community organizations to coordinate and host weekly events within neighborhoods experiencing the highest rate of violence in the city
- $250,000 for Youth Violence Prevention Micro Grants that support community-based agencies providing prevention and intervention services to youth.
- The 2021 budget also dedicates $11.5 million toward addressing complex issues such as behavioral health and criminal justice reform which require a multi-agency, whole-community approach. It includes:
- $1 million in additional funds for the Support Team Assistance Response (STAR) program to match existing funding provided through Caring for Denver and, once results of the pilot are known, to expand the program to additional police districts
- $650,000 to match funding from Caring for Denver ($1.76 million) to continue the successful co-responder program which pairs 12 mental health professionals with police officers responding to emergency calls involving a behavioral or mental health crisis. The program has served nearly 4,300 people since inception
- $3.4 million for the first full year of operations for the Solutions Center, where mental health professionals and support staff will provide individuals experiencing a behavioral health crisis and housing insecurity with high quality behavioral healthcare to mitigate the likelihood they are detained in jail or in a hospital emergency room
- $270,000 to sustain funding for after-hours and weekend navigators to help inmates released from jail connect to housing, transportation, mental-health and other supports
- $4.2 million of continued funding for programs to treat the underlying causes of incarceration and pursue evidence-based programs that divert people from entering or reentering jail
After the sudden and severe economic impacts of 2020, revenues are expected to continue to slowly recover in 2021.
However, the extent to which recovery occurs is largely dependent upon the wide availability of a vaccine for COVID-19 and how well confidence in public health is restored among consumers, businesses and tourists. The 2021 forecast for General Fund revenue is increasing by $62,848,000, or 5%, over the 2020 revised forecast.
It also does not account for a possible resurgence of COVID-19 either in late 2020 or early 2021, which could result in the implementation of stay-at-home orders.
"We are uncertain but, I will come back to the value of reserves and rainy day accounts," said Hanlon. "That is why they are there. That is why we are trying to preserve 12% because if something like this were to happen in the latter portion of the year you want that available to make sure you have a safety net for your finances."
City Council committees will begin budget hearings this week, with final adoption of the budget in November. The Mayor’s 2021 budget proposal can be found at denvergov.org/budget.
Monday night, Denver City Council declined to approve a proposed Collective Bargaining Agreement between the City and County of Denver and the Denver Police Protective Association (DPPA), for the years 2021-2022.
"Watching the decision by the city council was difficult and unfortunate, but we're not done. This is a process," Hancock said Tuesday.
The agreement, which would have resulted in $4.9 million in city budget savings in 2021, included the following cuts:
- A 0% salary increase in 2021.
- Suspending the holiday pay provisions for 10 holidays in 2021.
- Reducing the city's contribution to the Denver Police Retiree Health Fund by $360,000 in 2021.
- Creation of a one-time 100-hour time bank in 2022 to be used in the future like vacation leave.
- A 2.77% salary increase for 2022.
- Expressing hazard/specialty pay in terms of a percentage of salary effective Jan. 1, 2022.
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