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Mayor Hancock Submits 2021 Budget Proposal

Mayor Michael B. Hancock today submitted his 2021 budget proposal to City Council. To brace the city for the ongoing uncertainty in the economy, the 2021 budget proposal makes strategic cuts to most agencies, but expands budgets for programs to support the growing need for social services..

“My 2021 budget is fiscally responsible and equitable. It closes our $190 million budget gap without leaving our most vulnerable behind,” Mayor Hancock said. “We have weathered economic recessions before and come back stronger. We will deploy the same fiscally responsible tools and methods to ensure Denver emerges from this economic challenge stronger, more equitable, and better than before.”

This 2021 budget marks a year of significant and difficult cuts necessary to close a budget gap of approximately $190 million between the city’s projected revenues and expenditures.

To close the budget gap, the city will implement $154 million in savings proposals, including:

  • $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; and
  • $2.3 million in reduced uniform overtime spending in safety agencies.

The 2021 budget carefully manages the uncertainty of continuing public health and economic conditions with the city’s obligation to serve the community and get people back to work rebuilding the local economy.

Continuing to Respond to the COVID-19 Pandemic

When COVID-19 hit, city resources were focused on the people and industries most impacted by the virus. The city leveraged reserves and contingency funds, and federal and state dollars totaling $189 million to offset the costs related to the pandemic response. Those funds were dedicated to supporting emergency sheltering, PPE, testing, and workplace safety purchases, as well as programs assisting with economic recovery, housing support, public health needs, food assistance and others impacted by the pandemic.

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 continues 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 city will continue the work to reduce the spread of the virus by following the guidance from medical professionals and scientists to test, trace and protect against COVID-19, including:

  • $1.4 million to sustain mobile testing capability through the Wellness Winnie to deliver tests to the doorsteps of people who are homebound; and
  • $2.9 million toward public health inspectors to ensure businesses remain in compliance with public health safety measures that protect our community.

Rebuilding the Local 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 our capital improvement program, the city will invest $478 million in capital program delivery through 2023 to support thousands of good paying 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. Returns on capital investments are double: every $1 million spent generates $2 million in economic output and Elevate Denver is double the size of the city’s last General Obligation bond program, Better Denver Bonds, which the city used to support recovery from the Great Recession.

With annual capital improvement program and bond funds combined, the total 2021 capital investment in transportation and mobility is $165.6 million, including:

  • More than $15 million to continue building out Denver’s bicycle network, creating more comfortable spaces for people to ride, improving safety, and meeting Denver’s Commitment to build 125 miles of new bike lanes by the end of 2023;
  • $20 million to continue constructing sidewalks where they’re currently missing, with $4.4 million specifically dedicated to the in the Globeville and Elyria-Swansea neighborhoods and building a complete network for people to walk in our city; and
  • $1.5 million improve safety on Denver streets with the goal of zero transportation-related deaths and injuries, implementing projects outlined in Denver’s Vision Zero Action Plan, addressing neighborhood needs and creating Safe Routes to School.

Mobility options should be open to everyone, and the 2021 budget includes $5 million to ensure infrastructure projects are at minimum compliant with the Americans with Disabilities Act. The 2021 budget also sets aside more than $13 million for acquisition of new parkland, new parks planning initiatives and capital projects for outdoor recreation, resiliency and signature spaces. Combined with new funds approved by voters, the budget dedicates $140 million to the Department of Parks and Recreation.

In addition to capital investments, the city will continue to develop and expand programs to support the recovery of Denver’s most vulnerable businesses, including continuing the temporary expansion of restaurants and bars outdoors on private and public property, and quickly inspecting hundreds of establishments to allow businesses to safely reopen outdoors.

In 2021, the $36.9 million Denver Economic Development and Opportunity budget will be strategically used to support the stability and long-term recovery of Denver’s economy by providing equitable opportunities to residents and businesses in the city’s most under-resourced neighborhoods, addressing post-COVID-19 community needs regarding workforce training/re-training, bolstering support for small, minority, and women-owned businesses, while deploying traditional economic development tactics, to help rebuild and reinforce the city’s tax base.

Strengthening Services for the Homeless and Under-Resourced Communities

The Mayor’s 2021 budget places significant focus towards strengthening supports for people experiencing homelessness and people in under-resourced communities. Funding will be maintained or increased to support the city’s most vulnerable by increasing investments in shelter, housing, healthcare and social services.

The budget incorporates:

  • $187 million for Denver Human Services, including:
    • $2 million increase to Temporary Assistance to Needy Families and eviction assistance;
    • $1 million increase for property tax refunds for families, seniors and people with disabilities and 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, including:
    • $5 million to operate a shelter off 48th Avenue to provide additional capacity to serve around 400 persons experiencing homelessness in response to the public health emergency, providing 24/7 operations with onsite services, housing connections and other supports;
    • $1.5 million for encampment outreach to support access to shelter, housing, medical care and other services for people experiencing homelessness.
  • $2.9 million to continue the work of the innovative Health and Housing Social Impact Bonds 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 original SIB program contract ends in 2020, 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.

Keeping Denver Residents & Neighborhoods Safe

In addition the pandemic and economic challenges, Denver continues to face the challenge of keeping our children, families and neighborhoods safe. All people should feel safe in Denver and the 2021 budget addresses public safety challenges while continuing reforms to criminal justice systems.

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; and
    • $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. Denver has led the way in law enforcement diversion and criminal justice reform, and the 2021 budget continues and enhances this work.

  • $1 million in additional funds for the Support Team Assistance Response (STAR) program to match existing funding provided through Caring for Denver for a total of $2 million 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; and
  • $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 re-entering jail

The 2021 budget is fiscally responsible and ensures the city can weather any unexpected changes in the economy by maintaining the General Fund reserve at 12 percent of projected expenditures, or $163 million. Credit rating agencies carefully observe how the city manages and maintains its reserve levels. In affirming Denver’s AAA Bond Rating in July 2020, Fitch Ratings Agency stated, “The city's budget management at times of recovery is very strong … Fitch expects currently sound reserve funding and a demonstrated ability to make budgetary adjustments will allow the city to maintain a high level of financial flexibility through the current economic contraction.”

After the sudden and severe economic impacts of 2020, revenues are expected to continue to slowly recover in 2021. However, the extent to which this 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 percent over the 2020 revised forecast. The Mayor’s 2021 budget proposal reflects the sense of the city at the end of a tumultuous 2020 and start of a new year: cautious optimism for a sustainable and equitable recovery.

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.