City AND County of Denver Receiving Huge Financial Injection From Feds

Denver just hit the jackpot with the federal government, which is sending $308 million in relief money to the city...which happens to also be a county, a major multiplier in the funding formula.

"These American Rescue Plan funds will help to deliver on a once-in-a-generation opportunity to shape a sustainable, equitable recovery for our city,” Mayor Michael Hancock says in a statement announcing the windfall. “We have a strong recovery plan, and thankfully we also now have a partner at the federal level willing to put resources toward building back in a way that is equitable and, with local efforts, more sustainable.”

Even before the final amount of federal funding was determined, the Hancock administration had already targeted reducing the number of furlough days for city employees — the mayor had emailed city employees on May 7 to let them know that furloughs were ending for the rest of the year — and filling vacancies that had remained empty after hiring freezes were enacted as a cost-saving mechanism.

After using the funds to staff up, the city plans plan to apply the federal grant to focusing on shortening service backlogs, aiding emergency response, and pushing economic recovery.

“The magnitude of these investments will be felt for generations to come, so we look forward to launching a round of community and Denver City Council engagement in mid-May and to deploying the first round of funds this summer," adds Brendan Hanlon, the city's chief financial officer, in the May 10 statement.

Hanlon and other members of the administration had been cautiously optimistic that the city would receive over $300 million in federal funding through the American Rescue Plan Act. But they didn't want to celebrate prematurely, since Denver received much less in funding than the city thought it deserved from the Coronavirus Relief Fund, the first major pandemic stimulus package.

That package didn't have a provision for consolidated governments such as Denver's. Because Denver is a city and a county, the city government provides services for its residents that a county would, too. Although most cities are not their own counties, Colorado has a second example of a consolidated government: Broomfield. Honolulu and New Orleans have similar city-and-county setups.

Denver received only $186 million from the Coronavirus Relief Fund, since the feds accounted for it as just a city — not a county, too.

This time around, Denver officials weren't taking any chances; they lobbied the Colorado congressional delegation, asking members to ensure that the federal government granted the full amount possible for the City and County of Denver. If the feds had classified Denver as either a city or a county, it would have received between $140 million and $170 million in the latest round of funding.

Instead, Denver will receive $308 million, with half arriving in the coming days and the rest a year from now.

That money could end up going to a diverse range of projects. The City of Denver is already planning to purchase a motel and turn it into a homeless shelter using non-relief-fund money; it could do something similar with the stimulus funds. Council reps Amanda Sawyer and Candi CdeBaca are pushing an eviction legal defense ordinance that they hope to fund over the next few years using stimulus money.

Hanlon, who has already met with every member of council to hear their spending priorities, plans to start a community engagement process this month to discuss all of the areas where the city will spend the money.

Denver's 2020 general-fund budget took a major hit because of the pandemic, experiencing a shortfall of around $200 million, which represented around 13.5 percent of the $1.485 billion general-fund budget for that year. The city expects a shortfall of about $190 million for 2021.