The heads of every department in Denver have been asked to make further budget reductions for 2008, as revenue projections continue to slip.
City officials say the reductions should not affect “priority” services, but some services could suffer. The city will also look to make up some money from licensing fees, tickets and fines – where revenue has slipped.
Deputy budget director Ed Scholz said increasing costs and underperforming revenues left the city $30 million behind for next year.
Mayor John Hickenlooper sent a memorandum to the directors of each department this past spring asking them to prepare budgets for lower-than-expected growth to make up the difference.
“But it wasn’t enough to close the gap,” Scholz said Monday.
Scholz said the city will not look to furloughs or “across-the-board” layoffs to make up the difference because city employees already endured those struggles in the budget problems of just a few years ago.
“We are not going to balance this budget on the backs of employees,” he said.
Instead, the money will be made up through a combination of budget reductions, “further revenue refinement” and what Scholz called “looking under every rock.”
He said that could mean finding one- time revenues from things such as land sales.
The budget shortfall concerned members of the City Council on Monday as they met to discuss their priorities for the 2008 budget.
Councilwoman Marcia Johnson told her colleagues the administration was asking for “another round of cuts” and wondered “why is the outlook so grim?”
And council President Michael Hancock joined Johnson and Councilman Doug Linkhart in saying the city should take a “timeout” and conduct “a thorough audit of every department in the city” to look for “duplicated services.”
The discussion came as the City Council looked to increase some services, such as funds for police to fight gangs.
As the October deadline for the 2008 budget draws closer, Scholz said there will have to be service cuts.
“We can’t submit a budget that is unbalanced,” he said.
The city’s tax revenues have come in right about where officials expected – growing at about 5 percent over last year.
The problem, Scholz said, is the approximately half of city revenues that have underperformed – growing at just 2 percent. The city had expected to make more on licensing fees, fines and tickets for the year.
Increasing costs have aggravated the problem. For instance, the city will begin making principal payments on bonds for the convention center next year, instead of the interest-only payment it has been making.
The City Council worried that the problems would mean across-the- board cuts of 2.5 percent, but Scholz said that would not be the case. He said some programs could see growth, such as combating graffiti.
“But we told (the council), ‘Don’t come back with a big list, because there is not enough money,”‘ Scholz said.
Staff writer George Merritt can be reached at 303-954-1657 or gmerritt@denverpost.com.
