Denver’s Office of Economic Development said Wednesday that federal rules are forcing it to give back $645,000 in federal aid targeted for workforce development.
Councilman Michael Hancock had said during Tuesday’s weekly mayor/council meeting that he was puzzled about why the agency has to return the money given the level of job losses now occurring.
At that time, no economic development officials with the city were available to give an answer.
A memo to the council and Denver Mayor John Hickenlooper on Wednesday from Andre Pettigrew, the director of the city’s Office of Economic Development, said the agency had obligated the funds but had not spent them.
“The U.S. Department of Labor secretary and the Congress viewed the obligated, yet unspent funds, as available to meet other funding requests,” Pettigrew’s memo stated.
He added that other states also had to have communities return such unobligated funds.
“Please excuse our inability to provide you with detailed information yesterday morning regarding this issue,” the memo states.
Pettigrew added that the unemployment rate for Denver in April 2008, the time when federal officials notified the city that the money had to be returned, was 4.9 percent, or 15,190 unemployed people. He said the unemployment rate by December had risen to 7.0 percent, or 24,000 unemployed.
“Obviously this administrative decision was made in an economic growth cycle that is not present today,” he said in the memo.
He added there is no way for the agency to avoid having to send the money back to the federal government.
Christopher N. Osher: 303-954-1747 or cosher@denverpost.com
