Sep 15, 2020
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:
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:
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:
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:
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:
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.
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.