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COVID-19 Denver Update: Hancock on Dealing With $226M Nightmare

Denver Mayor Michael Hancock in a screen capture from a video he tweeted on Mother's Day.
Denver Mayor Michael Hancock in a screen capture from a video he tweeted on Mother's Day.
Twitter

During a May 14 press conference, Mayor Michael Hancock and key members of his administration discussed the moves being made to deal with a projected $226 million budget gap owing to lost revenue resulting from the impact of COVID-19.

The responses mentioned include eight mandatory furlough days for most city employees and other spending adjustments — but at this point, there's no telling if these efforts will be sufficient. In a hefty understatement, Denver Chief Financial Officer Brendan Hanlon conceded, "There's a lot of uncertainty on the horizon."

At the outset of the conversation, Hancock marked "the sixtieth day of our COVID-19 emergency activation in Denver. As of this morning, our community has lost 233 souls." Tomorrow, May 15, Denver will participate in a statewide day of remembrance for those who've died, by way of a moment of silence at 7 p.m. In addition, the Denver City and County Building, where today's press conference took place, will be bathed in red light.

The novel coronavirus has precipitated "not only a public-health crisis," but also "an economic crisis the likes of which we haven't seen since the Great Depression," Hancock pointed out. Yet he began with what he characterized as good news, including a $1 million contribution from Kaiser Permanente to the city's housing and homelessness fund; considerable buy-in from the general public in regard to Denver's mandatory rule about wearing face coverings in most public settings (something he hopes people will continue this weekend, when farmers' markets will start to reopen); and the roll-out of mobile testing. Those with transportation or financial limitations who have COVID-19 symptoms or who've been in close proximity to someone with the virus can arrange to be tested at home by dialing 311 — and as of yesterday, no doctor's order is required.

Hancock noted that 100 Denver police officers and other city employees have been trained in contact tracing. Outreach to potentially infected individuals will be made by phone or text, and he stressed that staffers "will always identify themselves, including their phone number, and they'll never ask for things like your Social Security number or payment — just the basics, like name or date of birth. And the information will never be shared or sold." Moreover, what he termed a "social safety-net team" is ramping up efforts to help vulnerable and under-resourced individuals mired in difficult financial scenarios, whether they test positive or not.

From there, however, much of the news Hancock had to deliver was grim. Even before calculating the aforementioned $226 million budget gap, he stressed that his team had taken several steps to mitigate a revenue shortfall, including a reduction in hiring and requiring 7.5 percent budget reduction proposals from city departments — actions that have helped Denver retain its AAA bond rating. But these efforts weren't enough, requiring him to make what he called a difficult decision, asking the majority of city employees to take eight furlough days; five will coincide with national holidays, with another three flex days that must be used before the end of the year.

Hanlon calculated that there are around 13,000 city employees at present, but the nearly 3,000 who wear uniforms (police and fire personnel, etc.) are precluded from furloughs under collective-bargaining agreements. So the furloughs will be taken by approximately 10,000 non-uniformed workers — and Hancock will do so as well on a voluntary basis, in an act of solidarity. Overall, furloughs are expected to save around $16 million, filling only a small portion of the gap.

Most members of Denver City Council will join the furlough express, too, but not Candi CdeBaca, who told Westword earlier today that she's not going along as a protest against concerns that she has with the city's budgeting in general. Hancock didn't call out CdeBaca by name, but after being asked about the issue, he paraphrased the prophet Jeremiah: "If I'm a voice of justice for my people but I don't lead with love, a strong work ethic, a willingness to strategize on solutions and come to the table with a collaborative spirit, I am a resounding bong ['gong' in the original] and a clattering cymbal."

He was just as passionate when it came to calling on "our leaders in Washington," such as Colorado's congressional delegation, to quickly pass a new stimulus measure that would include relief for states and cities. "If cities can't recover, there will be no national recovery," he said.

Shortly thereafter, Hanlon was spotlighted in a presentation peppered with graphics showing different recovery models named after letters of the alphabet: a V-shaped recovery (a deep dip and a quick return to form), a U-shaped recovery (an equally large dive but a slower but still steady upswing), a W-shaped recovery (one with multiple downturns, which could happen if there's a second wave of the virus) and an L-shaped recovery (a plunge leading to a plateau that is difficult to raise).

These disparate possibilities must all be considered given the stunning statistics Hanlon recounted next, including a spending slump in March of 20.4 percent, much worse than the national average, paced by precipitous declines in economic sectors such as food and dining, apparel and vehicle sales. And then there was tourism, which tumbled 62 percent — over seven times more than the 8.5 percent impact felt in 2009 during what became known as the Great Recession.

Even more worrisome: Before the imposition of a stay-at-home order, March was fairly normal, revenue-wise. As a result, Hanlon warned, "April is expected to be one of the worst months ever nationally and at home."

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For these reasons, the city has reduced its purchases of capital equipment and rides for its vehicle fleet — and it's using $90 to $100 million from its reserves to cushion the blow (while retaining around $160 million more in case of unforeseen problems by year's end).

Questions from reporters touched on a variety of other topics, including complaints about safety from Denver jail inmates; Hancock and Director of Safety Murphy Robinson touted a reduction in jail population of at least 50 percent and insisted that great care is being taken in the treatment of prisoners. Hancock also talked about the hit taken by Denver International Airport, where, he said, "passenger numbers are down 90 percent." As such, DIA Chief Operating Officer Kim Day has been working with Hanlon and his team to "make very difficult decisions to keep one of the world's best airports solvent during this difficult time."

Hancock can definitely relate.

This post was updated at 8:49 p.m. to reflect the accurate number of Denver employees, both uniformed and non-uniformed, as supplied by city representatives to correct those shared by chief financial officer Brendan Hanlon at the press conference.

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