By Peter Marcus, DENVER DAILY NEWS
Mayor John Hickenlooper has proposed laying off 176 city employees, reducing library hours and closing one library, as well as passing off recreation center operations to non-profits as part of an effort to close the city’s $120 million 2010 budget shortfall.
The mayor and his cabinet Tuesday presented City Council with the proposed $855.6 million budget — a general fund expenditure decrease of 1.14 percent over this year’s current budget and a decrease of 3.9 percent over 2008.
“Creating the 2010 budget presented the city with one of the most difficult financial challenges in many decades,” Hickenlooper wrote to Council members. “We approached this budget process with a focus on maintaining the core services that are most critical to our citizens, while at the same time identifying sustainable savings that strengthen our ability to deliver services more efficiently and effectively.”
The shortfall would have been closer to $160 million but the city used $40 million of reserves to limit the budget gap to $120 million.
A significant portion — about $12 million — of $23.3 million in anticipated personnel savings is dependent on negotiations with police, fire and sheriff’s unions. Calling the negotiations “black and white,” officials say the public safety employees will need to either accept significant cuts or face a reduction in force.
Denver Fire Fighters Local 858 members Tuesday voted to forgo $7 million worth of salary and health benefits in order to keep firehouses open, saving the city $3.2 million next year. Similar negotiations are ongoing with the police and sheriff’s unions. If the unions reject their respective contract proposals, the budget would call for the layoffs of 92 police officers and 45 sheriff’s deputies.
By accepting the offer Tuesday, firefighters saved 54 positions.
Despite outcries from many Denver residents not to close or reduce hours at public libraries and recreation centers, the Hickenlooper administration has proposed reducing hours at 18 library branches and the Central Library. The 18 libraries would be cut eight hours per week; Central Library would be cut four hours per week. The administration also has proposed closing and selling the Byers Branch Library, for a total savings of $1.8 million.
The proposal also calls for transitioning four recreation centers — Johnson, Globeville, College View and La Alma — to non-profit organizations “who can offer more valued services to the community.” Discussions are ongoing with the Boys and Girls Club of Metro Denver, said officials. The savings would be about $1 million.
In addition to sorting through 3,700 citizen responses to a survey city officials distributed looking for feedback on slashing the budget, the Hickenlooper administration also took ideas from 900 city employees. In the end, however, officials decided it is necessary to cut 176 full-time positions to balance the budget. The proposal also calls for abolishing or holding vacant approximately 600 positions. The savings would be part of the $23.3 million in personnel cuts.
“We could not find a way to balance a budget that had this type of a cap in it without taxing employees,” Claude Pumilia, chief financial officer for the city, said Tuesday at a media briefing to discuss the budget.
The hardest hit city departments would be the Department of Human Services and the Office of Economic Development. For example, human services would have its workforce reduced by approximately 83 positions. Officials, however, said the reduction would not impact safety net positions such as employees directly engaged in case-carrying activities.
Also part of the $23.3 million in personnel savings would be a freeze on wage increases, five scheduled furlough days, and the Denver Employee Retirement Program would require a 2 percent increase in contributions to individual plans paid by employees, to name a few.
In addition to $75.7 million in efficiency savings such as reducing library hours, Hickenlooper has proposed reducing Denver8 TV programming to public meeting coverage and select programming. He has also already reduced operating hours for 3-1-1.
Denver residents would also face “revenue enhancements” which equates to increased and new fees for certain services — part of $21 million in additional revenue to balance the budget. More controversial ideas such as implementing trash collection fees and creating a fine for false fire alarms were passed over in the proposal. But Hickenlooper has proposed increasing tax registration fees and implementing a new biannual registration fee for the occupational privilege tax registration.
The budget would also increase fines for vehicle registration violations, implement a Web record search fee for those seeking information pertaining to case history, and eliminate the 0.5 percent vendor’s incentive fee for timely filing of sales and lodger’s tax returns.
Pointing to the most historic economic downturn since the Great Depression, Pumilia said the “revenue enhancements” are a necessary component of the budget.
“We did not begin this process by saying, ‘Let’s simply go enhance revenues,’” he said.
Sales tax revenue is projected to decrease 7.8 percent, or about $33.8 million this year, and total revenues are anticipated to decrease 5.6 percent, or about $48 million.
The Hickenlooper administration last year cut $86 million from the budget, bringing the combined two-year cuts to $206 million.
City Council’s outspoken fiscal conservative, Jeanne Faatz, has so far given Hickenlooper support on the proposed budget.
“On the whole, I think that this approach is a necessary approach,” she said. “From a big picture perspective, I believe this administration is taking needed — much regrettable — but needed steps.”
Faatz said she is, however, taking a careful look at any transfers from the general fund. She is also concerned about implementing a new registration fee related to the occupational privilege tax.
“I am not interested in further adding to the burden of small businesses,” said Faatz.
The councilwoman is “smiling a big smile” that the administration has not proposed new trash collection fees.
City Council hearings will begin this coming Monday; a vote is expected in November. The Council can vote to amend the budget; the mayor can veto any changes.
Council President Jeanne Robb expressed faith in the mayor’s process.
“Mayor Hickenlooper and his team have been surgical with these budget cuts and found ways to minimize the impact on services to citizens,” she said. “City Council looks forward to reviewing the budget and working with the administration in the coming months, striving to do what’s right for Denver now and in the future.”