State of the City speech: It’s all about the budget
| July 10, 2009 | 8:11 PM
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With Denver’s looming budget shortfall at $120 million — up from $70 million — it’s no surprise the issue will be the main focus of Mayor John Hickenlooper’s State of the City address.
What isn’t known is how the mayor will approach the issue during his speech, which is scheduled for 8 a.m. Tuesday in the Greek ampitheater at Civic Center.
On Friday, Hickenlooper hinted at tough choices ahead in his monthly letter to city employees.
“We all know that making good financial decisions today, even though they are difficult decisions, will put us in a better position to manage the organization no matter what the future holds,” he wrote.
The 2010 budget shortfall has been a major concern, and Denver had already started chopping away at operational costs, including cutting $16.8 million in Career Service, appointee and safety personnel costs, and reducing janitorial costs by $230,000.
The city saved another $22.2 million by postponing equipment replacement, holding vacancies open and trimming costs of supplies and services.
Hickenlooper also asked that each department trim its budget by 7.2 percent, and he welcomed employee suggestions on how the city could cut costs.
One of those ideas was having city employees take furlough days — two have already been taken, and two more are scheduled. Each furlough day saves the city $1 million.
The city also held six community meetings last month to get resident input on cost-cutting proposals. Among the suggestions were: closing or reducing the hours of recreation centers and libraries, holding mail-only elections, watering parks less, reducing street and street median maintenance, and cutting hours of operation for Denver’s customer service center
Other suggestions dealt with ways to increase revenues, including charging residents a $10 monthly fee for trash collection, requiring property owners to pay $10 for a large-item trash pickup, and imposing a $50 fine for false fire alarms.
But even if all these ideas were implemented, Denver would only be able to trim roughly $25 million in costs, which is still far short of the projected shortfall, even when that projection sat at $70 million earlier in the year.
City officials had already acknowledged last month that other measures would be needed in order to make up the deficit. Their task was made much harder Friday, when the projected shortfall increased by $50 million.
The projection was revised based on a steady loss of revenue in the past few months. In May, sales tax revenues dropped by 10.7 percent compared with last year, marking the eighth straight month of significant declines, according to Hickenlooper. For the year, sales taxes are down by 12.7 percent.
Ed Scholz, the city’s budget director, noted that for every 1 percent drop in sales taxes, $5 million is lost.
To make matters worse, Denver’s other income sources also have dwindled, thanks to the bad economy. Construction permits, for example, are down by 60 percent this year.
“We have known for a couple of months that things would be revised down,” Scholz said. “We’re working on a plan.”
On Friday, no one was willing to discuss whether layoffs will be part of that plan.
“We’re not in the position to talk about what to cut,” said Eric Brown, Hickenlooper’s spokesman. “But everything is on the table.”
In the meantime, Denver is soliciting input from residents on the budget by asking them to fill out an online survey, which will be on the city’s Web site through the end of this month.
budget, denver, Ed Scholz, Eric Brown, john hickenlooper, shortfall
