Denver City Councilwoman Carol Boigon has proposed streamlining Denver’s three-layered fiscal reserve requirements to free up money for pressing budget needs. That’s a good idea as long as the money is used for one-time expenditures or paying down debt, not on new programs that would require more funding in future years.
The city charter has long required a 2 percent reserve, about $15 million of the current $739 million general fund. The 1992 Taxpayer’s Bill of Rights also requires a reserve – a broader, 3 percent fund – that will total about $27 million next year. On top of those legal requirements, Mayor John Hickenlooper’s administration tries to maintain a reserve of 10 percent to 12 percent of the general fund, up to $90 million.
Boigon has authored an ordinance that passed the council’s Finance Committee 5-4 Wednesday, authorizing the city to designate some of the funds it has already set aside as meeting the TABOR requirement. Such a “double designation” is already used by the state and would free about $27 million now tied up in a separate TABOR account in Denver.
There’s no harm in passing such an ordinance, though budget director Margaret Browne told the committee she believes the city already has such authority. But we have doubts about some of the $22.2 million “wish list” Boigon wants to fund from that $27 million reserve. The list includes $10 million for the mayor’s homeless initiative, $5 million for the city employee merit pay plan, $5 million in new buildings for Denver Health, $1.2 million to keep libraries open an extra day and $1 million in planning transit sites for the upcoming FasTracks project.
We’d scrub the library and merit-pay ideas because these are ongoing obligations that shouldn’t be funded from one-time revenues. The Denver Health proposals are appealing, because they would allow the hospital to serve more more private pay or insured patients, generating profits to pay for indigent care. Planning for development at FasTracks sites is another one-time need that could yield big dividends. Hickenlooper’s staff is also interested in putting some city money into the homeless initiative to build more housing – especially if it can be leveraged with federal grants and private-sector participation.
Hickenlooper has the final say, and Boigon won’t get all her $22.2 million wish list from the fiscally conservative mayor. But the councilwoman deserves praise for helping reform an inadvertent triple-reserve system to better serve Denver taxpayers.
