Denver residents would pay for trash pickup, would see fees and fines rise with inflation and could be asked to approve a tax hike for city services if recommendations from a year-long financial task force are adopted.
On Monday, Denver Mayor Michael Hancock received the long-awaited final report from a task force of civic and business leaders who convened for months to devise recommendations on how the city should cut expenses and increase revenues to resolve a persistent unbalanced budget that every recent year has been at least $30 million out of whack.
“There are going to be some tough, tough decisions that are going to have to be made, and some tough asks of the public and the city,” Hancock said. “We must be strong, and we must be bold and not worry about our political future but worry about the sustainability of the city.”
Most ideas in the 44-page report are not headline-grabbers, urging common sense in government, such as looking for efficiencies and developing an economic-expansion strategy.
But some proposals could spark controversy, such as asking Denver residents who now do not have separate trash fees to begin paying for trash and recycling service.
The trash fee should be phased in over time and could generate $16 million to $26 million a year, depending on the fee, the report says. It also could be a way for the city to begin a pay-as-you-throw program, in which residents would be charged by the amount of trash they generate, with benefits to those who recycle and compost. The report didn’t suggest how much residents should be charged.
Hancock said he hasn’t decided yet which recommendations to pursue and that his office will be working with the City Council to determine proposals to implement. The city will launch a public-engagement process in March.
Some recommendations would require voter approval, such as allowing the city to opt out of revenue limits imposed under the Taxpayer’s Bill of Rights and raising property taxes to support libraries or parks.
The report argues that Denver has the second-lowest property-tax burden out of 26 surrounding jurisdictions and that its residents pay 25 percent less than the metro-area average in property taxes. The city has the same property-tax rate as it did in 1996, said Lisa Roy, task-force member and executive director of the Timothy and Bernadette Marquez Foundation.
Other tax increases should also be on the table if laws change and if neighboring municipalities join in, such taxing Internet sales, services, cigarettes and medical-marijuana purchases, the report says.
The report has been in the works since last year, when Mayor Guillermo “Bill” Vidal established the group to look at ways to get the city out of its persistent budget crunch.
City revenues are not increasing as quickly as spending — at the current rate, the gap grows by 1.37 percent every year. Unless structural changes are made, the budget would require a $30 million cut every year for the next 17 years.
The report is emphatic about pursuing reductions and cost-saving options before “seeking revenue enhancements.”
Some reduction recommendations are aimed solely at city employees as a way to reduce the city’s expenses — 70 percent of which are tied to employee compensation.
The report says the city should try to negotiate wage-increase caps into its collective-bargaining agreements, eliminate overtime from the pension calculation under the Denver Employee Retirement Plan and make employees contribute the same amount as the city into that pension.
It also says the city should study and implement a self-funded insurance program for its employees and increase the share of health-insurance costs to employees.
Eric Duran, task-force member and investment banker, noted that fees and fines make up 27 percent of the general fund, and the city should make those fees and fines more consistent.
“In the past, it has been inconsistent as we have raised these fines, and it may not be keeping up with inflation,” Duran said.
The task force also recommends that the city pursue suggestions from a parking plan, including calibrating parking meters so they reset after a car drives off, charging for parking on Sundays and establishing a tax for off-street parking spaces.
“It’s an opportunity for the city to become a healthier city fiscally down the road,” Hancock said. “One of the things I encouraged the task force to do was be bold, bring us what you think is necessary for us to become a better city. And I believe they have done that in this proposal.”
Jeremy P. Meyer: 303-954-1367 or jpmeyer@denverpost.com
Possible actions
Recommendations from Denver’s Structural Financial Task Force to cut costs and generate revenue:
1. Implement “best practices” in government, such as continuing to identify efficiencies throughout the city and developing a comprehensive economic expansion plan that will retain and attract business.
2. Focus on reducing personnel costs that make up 70 percent of the city’s general fund, including instituting a wage-cap trigger into collective bargaining contracts; eliminating overtime from the pension calculation; balancing the city’s and employees’ contribution to the Denver Employee Retirement Plan; instituting a self-funded insurance program if it saves money; balancing the share of health- insurance costs between the employees and city.
3. Raise revenue through a variety of means, including de-Brucing the city’s tax structure; asking voters to approve a dedicated mill levy or taxing district for specific services to be determined by the mayor and City Council; charging residents for trash collection; index fees and fines to an annual growth rate as determined by the mayor and City Council.
Source: Denver’s Structural Financial Task Force Report
