A move is afoot to raid Denver’s multimillion-dollar rainy-day funds to make up for budget shortfalls.
City Councilwoman Carol Boigon, head of the finance committee, said she will propose on Wednesday that $27 million of the city’s reserves be used in 2006 for, among other things, employee bonuses, Denver Health expenses and keeping the public libraries open another day each week.
And, she says that she has at least eight of the 13 council members behind her.
“I’m not asking for spending that doesn’t make sense. These are one-time expenditures,” Boigon said. “I’m going to push that we free up $27 million and I have nine (council) votes to do it.”
Nine votes are required to override a budget veto from Mayor John Hickenlooper. However, the administration hasn’t indicated its position on Boigon’s plan, except to say that the city is likely unable to shell out $27 million and keep its state- and city-mandated emergency funds.
“We will see where we are with the budget and if we determine there are dollars available, we will look how to use it in context of the 2006 budget and in a fiscally conservative manner,” said Hickenlooper’s top aide and city attorney, Cole Finegan.
Another potential stumbling block for Boigon is that the administration’s definition of one-time needs – capital equipment and software programs, for example – appears to conflict with hers.
Boigon has a wish list that includes $5 million for employee bonuses; $5 million for Denver Health; $10 million for health and human services; $1 million for transit-oriented planning around FasTracks; more than $1 million for an extra library day; and more than $4 million for the general fund to cover city expenses.
“The constituents need some local relief,” she said. “It’s been a brutal year in human services and other places. We’ve cut programs and deferred maintenance – the money should be in circulation.”
The administration is currently working on the 2006 budget. The shortfall has been estimated anywhere from $17 million to $35 million.
The $27 million cited by Boigon is equal to the amount set aside in the city’s emergency fund. The 1992 Taxpayer’s Bill of Rights forces cities to set aside 3 percent of their annual budgets for emergency purposes. However, an emergency does not include revenue shortfalls or economic downtowns, and therefore the money usually remains dormant.
While the city cannot touch that $27 million, the equivalent amount can be taken from other reserve funds, except for the contingency reserve. The city charter mandates that 2 percent of the city’s planned expenditures for the year be set aside for contingencies.
There are some concerns among council members about using reserves. The different reserve funds are used for a number of things, including the city’s bond rating and unforeseen financial circumstances, said City Councilwoman Jeanne Faatz.
“This plan is symptomatic of people who have an intense desire to spend more money than is readily available,” she said. “If we’re going to do fund raiding, I’d rather it go to reducing our debt.”
Staff writer Karen Crummy can be reached at 303-820-1594 or kcrummy@denverpost.com.
