Our city is facing the worst financial crisis since the Great Depression.
The drop in revenue is the worst since 1933 and has had a staggering effect on the city’s budget. Our intention has been to improve efficiencies in city government, minimize layoffs and make the city stronger in the process.
Earlier this summer we decided we would utilize $40 million from our reserves, the savings from more prosperous years. This decision will reduce the city’s reserves in 2010 to 11.5 percent — from the target of 15 percent of expenditures. This minimizes service impact during this severe economic downturn and helped us keep the budget shortfall to just $120 million.
We have delivered a budget to the City Council that includes roughly $75 million in cuts and $23 million in new revenue. As a frame of reference, in a typical year the city finds about $5 million in new revenue.
This budget is largely sustainable and provides the city the best financial footing to weather the current economic instability.
We have found significant efficiencies and savings to help minimize the impact to our work force as well as to the services we provide to the community. More than 50 percent of the cuts we made were cuts we can sustain over time — not one-time savings that we must again find in future budget years.
Many of these efficiencies may not be significantly noticeable to our community, as they represent better ways to do business and more effective use of resources. Some changes will be more visible: a reduction in Denver8 TV coverage of public meetings and other select programming; a reduction in hours at 18 library branches and the central library; and a plan to transition four recreation centers that serve few residents to be operated by non-profit organizations.
We are abolishing or holding vacant approximately 600 positions in the city, having already fewer budgeted employees next year than the city had in 2002. Even with the large number of vacancies, the city will have a reduction in force equal to 176 full-time positions. The reduction is greatest in the Department of Human Services and Office of Economic Development, which are primarily funded by state and/or federal dollars.
Because personnel costs make up 70 percent of the General Fund budget, there is no way to find further cuts that don’t impact employees and the services they deliver. In 2010, there will be no wage increase or bonus for Career Service employees and we will schedule five furlough days.
Denver’s work force has demonstrated remarkable commitment and determination to work through this deep recession and share sacrifices to minimize the number of layoffs.
The city will work to ensure it is collecting sufficient fees and fines to cover associated costs, such as implementing a Web record search fee for organizations seeking information pertaining to case history and increasing fines for violations of vehicle registration. We also will utilize anticipated jail capacity to house other jurisdictions’ inmates.
Our discussions about the budget were no different than discussions each of us have had around the dinner table when talking about family finances. We all must live within our means.
We’d like to thank city workers for doing more with less and providing outstanding customer service. Without their efforts, and more than 900 suggestions of how to save money, we would have been forced into many hundreds more layoffs. We’d also like to thank the residents of Denver for helping us through the budget process. They recognized the challenges we faced and that we can’t maintain everything as usual. With so many people unemployed or under-employed, this is not the time to raise taxes.
These are difficult times, but by working together our city will emerge stronger and more resilient.
John Hickenlooper is mayor of Denver.
