A short time ago, the office of Denver Mayor Michael Hancock released the so-called September draft of his proposed 2019 budget for the City and County of Denver. And it's nothing if not ambitious.
The document is accessible below in its entirety. But to provide a quick look, we've excerpted key passages from the budget's summary section, which notes that the city's operating budget for next year has been set at $2.4 billion, an increase of 3 percent over 2018.
Also highlighted are a slew of priorities, including "Expanding Affordable Housing & Homeless Services," "Protecting Denver’s Unique Neighborhoods," "Improving Transportation and Mobility," "Growing Our Parks and Enhancing Our Recreation Programs," "Keeping Denver a Safe Big City" and "Bolstering Mental Health Services and Addressing Substance Misuse." And that's not to mention a number of significant capital projects.
Among the most interesting sections is one titled "Marijuana-Related Budget in Detail," which makes it clear just how dependent the city has become on money from cannabis. Revenues from marijuana are estimated at just over $32 million next year, and, as seen in a graphic we've included, the cash will go toward projects that fall under the umbrellas of regulation, enforcement, education, public health, affordable housing and more.
Note that Hancock opposed Amendment 64, the 2012 measure that legalized limited recreational marijuana sales in the state.
Continue to get your first look at next year's budget.
Budget Highlights – Budget Summary
The total 2019 operating budget for all appropriated funds is $2.4 billion, an increase of 3.0 percent from 2018. The budget maintains adequate reserves in all funds according to the City’s financial policies and includes approximately $119.4 million in required debt service payments on outstanding general obligation debt. The City’s main operating fund, the General Fund, will increase to $1.46 billion, up 4.2 percent in expenditure growth from the 2018 revised budget. The Enterprise Funds operating budgets (Airport, Wastewater, Golf and Environmental Services) will increase to $667.1 million, up less than 0.5 percent from 2018. A $22 million decrease to wastewater capital projects, which still maintains the capital workplan, contributes to this low growth rate. Without this significant decrease, the Enterprise Funds operating budgets would be increasing by 3.5 percent. The capital projects budget for annual Capital Improvement Program (CIP) is $418.9 million in 2019. General Fund Revenue: The 2018 revised and 2019 beginning revenue forecasts were prepared during this expansionary period in Denver’s economy. Forecasts of the City’s economically-driven revenue streams assume the economy will continue to expand in the remainder of 2018 and into 2019, though at a more moderate pace.
• General Fund revised revenues are projected to increase by 3.4 percent in 2018 from 2017 actuals. (There were one-time revenues because of a settlement with online travel companies in 2017 that will not be realized again in 2018.) Revenues are expected to grow in 2019 by 4.2 percent.
• Core sales and use tax revenues (minus audits) are projected to grow by 5.4 percent in 2018 and 5.5 percent in 2019.
• The revised property tax for 2018 is 7.1 percent over 2017 actual property tax collections. Property taxes collectable in 2018 are based on values established during the 2017 re-appraisal and reflect any physical changes to property, including new construction, completed prior to January 1, 2018. The projected growth of property tax is constrained by the cap that was established in 2012 after voters approved measure 2A. The 2019 projection reflects an increase of 1.8 percent to account for local growth.
Specific increases to the personnel budget, which are reflected in all agency budgets, include:
• A budgeted merit increase of 3.3 percent (to align with a market analysis) for Career Service Employees.
• An increase in health insurance of 5.1 percent.
• Approximately $1.2 million for the City’s annual pay survey to address market adjustments for specific employee classifications found to be under market.
• An increase of 0.5 percent to the Denver Employee Retirement Program (DERP). The total increase of contribution needed is 1 percent. This increase is shared equally between the City and employees, with each increasing one-half percent. In 2019, the City contribution as the employer will increase to 13.0 percent toward retirement, and employees’ share will increase to be 8.5 percent. This additional contribution is required as a result of an actuarial study that identified an increase in the longevity of retirees.
• Increases to uniformed personnel are budgeted in accordance with collective bargaining agreements, and for 2019 as follows:
• For the Police Collective Bargaining Agreement, the overall increase is 3.25%.
• For the Fire Collective Bargaining Agreement, the overall increase is 3.75%.
• For the Sheriff Collective Bargaining Agreement, the overall increase is 6.5%. The City completed collective bargaining negotiations for the Denver Sheriff Department in late 2017, after the 2018 budget was finalized. Therefore, the increase in DSD’s personnel services in 2019 reflects the full impact of the raises for both 2018 and 2019 (3.5% and 3.0%, respectively).
• The 2019 budget maintains the subsidy for the employee EcoPass program, which continues to provide the opportunity for city employees to purchase the EcoPass for $10 per month. This is to encourage use of public transportation.
Expanding Affordable Housing & Homeless Services
• A record of more than $50 million for affordable housing thanks in large part to a 2 percent increase in the city’s retail marijuana sales tax rate, allowing for the creation or preservation of more than 6,000 new housing units over the next five years. About 31 percent of the Affordable Housing Fund is dedicated to support those experiencing homelessness.
• In collaboration with City Council, $3.1 million to expand eligibility for the city’s property tax rebate program to cover more homeowning seniors and people with disabilities, and now low-income home-owning families with at least one child as well.
• $14.7 million investment in homeless services and facilities, including $4 million to hire up to 10 peer navigators to help shelter guests obtain services and to begin implementing recommendations from the new Three-Year Shelter Strategic Plan.
• $1.5 million to continue the Temporary Rental and Utility Assistance Program, which provides short-term support to struggling renters and helps prevent evictions and homelessness.
Protecting Denver’s Unique Neighborhoods
• Creation of a new Neighborhood Equity and Stabilization Team to deploy resources specifically tailored to help protect vulnerable neighborhoods under threat of displacement.
• Expanding the capacity of our Financial Empowerment Centers and opening two new Neighborhood Resource Centers — in Globeville and Montbello — modeled after a pilot launched in April at the Valdez-Perry Branch Library. These resource centers will provide residents with easy, direct access to financial coaches, social services, housing resources and more — right in their neighborhoods.
• Launching "Denver Talks," an initiative to capture the unique stories and history of Denver’s neighborhoods and residents.
• Beginning to implement recommendations in the new Denveright long-term planning documents, including $9 million in capital projects, with a focus on equity, underserved communities and neighborhood preservation.
Improving Transportation and Mobility
• An additional $27 million to continue implementing the city’s Mobility Action Plan, including bigger commitments to Denver’s bicycle and pedestrian networks. These investments include:
Doubling our annual commitment to bicycle-network buildout, with a $4.2 million investment. The Mayor also is proposing a one-time $2.9 million investment in the city’s bike network from the recent sale of a city-owned property. These funds will support Mayor Hancock’s ambitious effort to add 125 miles of bike lanes over the next five years.
$800,000 to continue the city’s support for the Denver Bike Share program. This investment would allow us to discount or even offer free B-Cycle rides to Denver residents and to extend the program into currently unserved neighborhoods.
$3.8 million to continue pedestrian-network buildout by making improvements at 10 intersections and filling critical sidewalk gaps.
$2.6 million for projects to address safety at high crash locations, to implement recommendations of the Vision Zero Action Plan, and for new safety medians in Green Valley Ranch.
An additional $250,000 for Safe Routes to School projects, bringing our total 2019 investment in children’s/youth safety and mobility to $750,000.
$1 million for transit reliability improvements on key RTD bus corridors.
• Funding for the “Navigate North Denver” program to help residents, delivery trucks and commuters maneuver around construction projects in this part of the city.
Growing Our Parks and Enhancing Our Recreation Programs
• More than $1 million to improve the upkeep, maintenance and safety of our downtown parks so they remain welcoming to all.
• $1.9 million to make improvements at neighborhood parks, expand parkland, construct a new pocket park in Westwood, new playgrounds in North Denver and a new dog park in south Denver.
• $200,000 to accelerate the replacement of old fitness equipment such as weights, balls and mats at recreation centers.
Keeping Denver a Safe Big City
• An increase of 68 additional police officers, sheriff’s deputies and firefighters to maintain the safety of Denver’s neighborhoods and families, primarily as a result of:
31 new police officers, and three new detectives dedicated solely to investigating domestic-violence cases, and improved use-of-force training to emphasize de-escalation tactics.
37 new firefighters primarily to help ensure appropriate response times citywide and to open the new Northfield fire station in mid-2019.
Bolstering Mental Health Services and Addressing Substance Misuse
• $3.1 million to ensure a coordinated and comprehensive response to the mental-health, opioid and substance misuse challenges facing Denver, including:
Piloting a 24/7 treatment-on-demand program with Denver Health
Hiring two substance misuse peer navigators
Deploying a mobile van for needle exchange, syringe access and access to services.
• Ensure 24/7 access to mental health service in jail, because half of the Denver jail population experiences mental health issues.
• Creating a “Navigator Court” to help guide defendants who are out of compliance with court orders to come back into compliance.
Extending Equity and Access to Opportunity for Residents and Neighborhoods
• $1.2 million for WorkNow, a key part of the Mayor’s Equity Platform and the city’s employment approach to training, placing and advancing workers in the construction industry. WorkNow also will help ensure that families living in communities directly affected by public construction projects — including the National Western Center, Colorado Convention Center expansion, and Elevate Denver infrastructure bond program — can access the employment and skills development opportunities offered by those projects.
• $1.25 million for small business capacity-building, a small business lending program, and youth employment.
Ensuring a Sustainable Future
• $2.2 million to continue expanding the city’s curbside recycling and composting program.
• Purchasing 119 electric vehicles for the Police, Fire and Public Works fleets.
• Hiring additional staff to implement the voter-approved Green Roof initiative.
Reserves are maintained in a manner consistent with the guidelines approved by the Blue-Ribbon Task Force on Financial Management and with the City’s established reserve policies. Undesignated reserves are expected to be 15.2 percent of projected expenditures, or $222.5 million, by the end of 2019. This is a significant achievement and highlights the City’s strategy of building back to 15 percent of expenditures, from a low of 10.7 percent during the recession. The annual General Fund contingency is being budgeted at $28.6 million and the Capital Improvement Fund has $5.1 million budgeted for unappropriated expenditures to meet the criteria for supplemental appropriation in accordance with the financial policies.
Federal and State Special Revenue Funds
The City’s 2019 budget was developed while monitoring proposed federal funding. The community relies upon various federal and state-funded programs such as Temporary Assistance to Needy Families, Community Services Block Grant, Community Development and Block Grant, Head Start and Workforce Innovation and Opportunities Act. The services provided through these grants are essential to meeting the needs of the Denver community. At this time, there have not been significant changes to the federal or state grants and 2019 projections are relatively flat with previous years. Note that in the grants section of the 2019 Budget, 2019 projections are based upon various fiscal years and include those grants for which a notification was received by the City. It is likely that additional grants notifications will be received after the publication of the 2019 Budget.
The Human Services (DHS) budget for special revenue funds will total $193.6 million for 2019. The 2019 Budget includes a reduction in budgeted expenditures as a result of the transfer of the Solutions Center project budget and Crime Prevention and Control Fund to the Department of Public Health and Environment. There is no reduction in services. Program expansions within Human Services include increased local investment in child care assistance, more General Assistance dollars to help families in need of emergency shelter or eviction assistance and expanded caseworker and service navigation capacity within the Department, among other investments. Human Services also authorizes through state payments systems an additional $199.4 million in benefits to eligible low-income individuals, such as recipients of the Supplemental Nutrition Assistance Program (SNAP), and to community providers, such as child care centers. These direct payments are not appropriated in the City’s budget, other than when Denver is required to share in the cost. The City is also investing an additional $3.8 million in services and sheltering for those experiencing homelessness, most of which is budgeted in the City’s Capital Improvement Projects Fund.
In 2019, $180.5 million is budgeted for capital projects from annual capital revenues and includes the capital maintenance mill levy funding approved by voters in 2007. The capital project budget includes a $24.2 million General Fund transfer to the Capital Improvement Fund due to continued strong revenue growth. Of the $24.2 million transfer, $12.7 million is programmed for continuous investment in the Denver Health Westside Clinic, citywide space reallocations and moves, and street paving. The additional $11.5M is a transfer to support mobility investments and implementation of the Mayor’s Mobility Action Plan. These mobility investments include a sustainable increase in funding for new bikeways and Safe Routes to School projects, funding for redundancy and maintenance of the fiber optic network to support technology advancements in transportation, and funding to construct key medians on Green Valley Ranch Boulevard to address safety and accessibility.
The capital project budget funds critical maintenance and rehabilitation projects, matching funds to unlock state or federal dollars, legal obligations and other high-priority capital investments. In 2019, additional maintenance investment will be made in the City’s bridges and structures, at popular performance venues like Red Rocks and the Denver Performing Arts Complex, and for critical life-safety improvements in city buildings. Denver also continues to leverage funding from regional partners and in 2019, capital funding is reserved as match for the 2020-2023 Denver Regional Council of Governments (DRCOG) Transportation Improvement Program (TIP).
Other high priority capital investments in 2019 include improvements to Swansea Park and St. Charles Park to better serve neighborhood youth; construction of a regional park and water quality improvements at Heron Pond; implementation of pedestrian and transit facilities; renovations to the Denver County Jail for in-person visitation and Park Avenue West facility for the Denver Police Department’s Gang and SWAT units; and further study to inform implementation of major capital project needs of a Combined Safety Training Facility and future transportation investments in the Broadway Station Area, along 52nd Avenue in north Denver, and on the Yale Corridor between I-25 and Colorado.
In addition to these annual capital funds, approximately $184 million in one-time bond-funded projects will continue to be implemented in 2019 as part of the Elevate Denver and Better Denver Bond program (approved by voters in 2018 and 2007, respectively), the National Western Center program (approved by voters in 2016), and the Colorado Convention Center program (approved by voters in 2016).
Marijuana-Related Budget in Detail
In November 2013, Denver residents voted to impose a special 3.5 percent retail marijuana sales tax to fund the enforcement and regulation of the retail marijuana industry to fund education and public health programs associated with marijuana consumption; and "to otherwise pay the expenses of operating and improving the city and its facilities." In addition to the city’s voter-approved 3.5 percent special retail tax, the state also imposes an added tax on retail marijuana and distributes a portion, known as the State Shareback, to jurisdictions that collect retail marijuana tax revenue.
In 2018, Denver City Council approved a two percent increase to the special 3.5 percent retail marijuana sales tax, bringing the total tax rate for the special retail marijuana sales tax to 5.5 percent. This additional increment of tax funds is dedicated to the funding of affordable housing programs. Per ordinance, these funds shall be remitted to the Affordable Housing Fund.
Below are budget highlights showing the city’s 2019 proposed budgeted allocations of the projected special retail tax revenue and State Shareback tax revenue across city agencies. In 2019, the City will continue to fund regulation, enforcement, and education at levels similar to 2018. The 2019 marijuana budget supports city agencies with personnel and services and supplies for the following:
Regulation: Includes funds allocated to Excise and Licenses/Office of Marijuana Policy to support marijuana policy development; Community Planning and Development, Department of Public Health and Environment, and Denver Fire Department to inspect marijuana facilities to ensure safety and compliance with all existing regulations. Funds also support the Department of Finance to oversee city tax compliance. Enforcement: Includes funds allocated to the Denver Police Department, Parks and Recreation, and the City Attorney’s office to enforce the City’s marijuana-related ordinances and policies and to limit black market marijuana activities. Education: Includes funds allocated to Excise and Licenses/Office of Marijuana Policy for a Denver youth education campaign; Parks and Recreation and Children’s Affairs for programs to encourage healthy lifestyles for children; the Office of Behavioral Health for intervention and treatment programs for youth in an environment with legalized marijuana; and Denver Health to analyze marijuana’s health impacts to inform education efforts.
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Public Health: Includes funds for opioid intervention and treatment provided by the Department of Public Health and Environment (DDPHE). In 2019, funds support the DDPHE opioid/substance misuse program which is focused on providing a comprehensive response to the current opioid epidemic. This program works to establish prevention, treatment, and harm reduction services in Denver to prevent the substance-use epidemic and other health concerns stemming from opioid use in Denver.
Investment in the Capital Improvements Program: As outlined in authorizing ordinance for the special tax rate for retail marijuana, these funds can be used for Improvements to the City and Facilities. In 2019, this includes funds for one-time mobility projects and maintenance.
Affordable Housing: There are two sources of retail marijuana tax revenues supporting affordable housing in 2019. The first source is a portion of the 3.5 percent special retail marijuana tax, $1.9 million, that is part of the $10.2 million General Fund transfer to the Affordable Housing SRF. This allows the General Fund to meet the commitment to affordable housing that is not supported by the linkage fee and property tax projections. The second source is the dedicated two percent increase to the special retail marijuana sales tax passed by City Council that will go into effect in late 2018. Note that the most recent projections for the additional two percent increased from $8 million to $9.3 million. The revenue from both sources is appropriated into the Affordable Housing Fund, which is in the Office of Economic Development’s budget. The Affordable Housing Fund supports land acquisition, unit development/production, housing assistance, and supportive housing services.