Facing a $29 million shortfall in the next 18 months, Denver’s Department of Human Services is slashing services and has convinced Denver Mayor John Hickenlooper that he needs to plug some of the gap by dipping into city reserves and tapping federal aid.
In his weekly meeting with the City Council on Tuesday, the mayor said the agency needs financial help.
To cover the growing shortfall, the agency is putting new limits on who can apply for child-care assistance for the working poor. A program that tries to place foster children with relatives and a worker-retraining program are also getting cut.
The agency also is backing away from a commitment it made last year to add 65 workers to help protect children from abuse. Even the mayor’s cherished homeless initiative is scheduled for a $1.5 million cut.
“At what point are you cutting into muscle that will never come back and affecting the resiliency of the community?” Hickenlooper asked.
He said such budget cuts affect the most vulnerable. Further, spending on human services helps reduce city spending in the long run, such as helping children of neglect today rather than waiting until they’re adults and need assistance getting a job.
Hickenlooper thanked Councilwoman Carol Boigon for pushing him to look at using the city’s contingency reserves to ease new restrictions on those who can qualify for child-care assistance. Boigon also thinks she might have found a federal source that will allow the agency to hire the additional child-abuse caseworkers that had been promised last year.
Agreeing to use the city’s contingency reserves as a one-time stopgap for ongoing expenses is somewhat of a surprise. The mayor has dipped into reserves in the past, but always grudgingly. He unsuccessfully fought efforts by the City Council three years ago to use reserves to pay for the hiring of additional police officers.
Boigon and the mayor plan to hammer out the details this week on how to shore up DHS.
Later Tuesday, Human Services director Pat Wilson Pheanious and her management team met with the council to deliver a grim budget report.
Pheanious, who in September took the helm of the agency, said she arrived to find it was spending itself into a hole.
“We are struggling to look at every available dollar in our agency,” she said.
The agency is scheduled to go into the hole if it doesn’t slash spending before the end of the fiscal year ending in June. For the 2009 fiscal year, the agency could face a $15.6 million deficit, well below its policy of having a reserve balance of $13.38 million. The agency spent $337 million last year.
Cuts to spending are projected to allow the agency to build up $6 million in reserves, but that could be wiped out if the state moves forward with plans to cut welfare spending in Denver by about $6 million over two years, Pheanious said.
She said some of the programs being cut were the very things that have given Denver a reputation of progressiveness. “Things have changed, and we are entering a perfect storm of an economic downturn,” she said.
Some on the council are expressing reservations about using the city’s contingency reserves. Councilwoman Jeanne Faatz said she doesn’t support the move when other city agencies are struggling to make cuts.
Council president Jeanne Robb said she also had reservations about using the reserves for one-time expenses when doing so could have budget implications in future years.
Christopher N. Osher: 303-954-1747 or cosher@denverpost.com
This article has been corrected in this online archive. Originally, due to a reporting err, it incorrectly stated that Denver Mayor John Hickenlooper planned to help ease a budget shortfall at the Denver Department of Human Services by dipping into the city’s emergency reserves. The city plans to use its contingency reserves – a different fund.
