Finance & Services Committee - Regular Meeting

It's time for this biweekly meeting of the Finance and Business Committee of Denver City Council. Join us for the Finance and Business Committee starting now.

Good morning, Denver. My name is Chris Hines. I serve on City Council representing District 10. And you have tuned in to the Finance and Business Committee on Tuesday, August 26th. Sorry, Tuesday, August 25th, 2026. And we have one action item, one briefing, and one consent item. One is the magic number for today. which is great. Sometimes it's difficult to count higher than one. So before we go into the action item, which is 26-1216, let's do introductions by members of council, starting with the distinguished gentlewoman to my right.

I don't know how distinguished I am.

Amanda Sawyer, District 5. Good morning. Diana Romero Campbell, Southeast Denver, District 4.

Good morning. Paul Cashman, South Denver, District 6.

Hey, everybody. Serena Gonzalez-Cucharras, council member at large.

Good morning, Daryl Watson. Find District 9. And we don't have anyone on online. Great. Okay. So do we have quorum? Oh, we have quorum, great. So we can actually vote on things and start the meeting. So 26-1216 is amending the DRMC Chapter 28, Article 3, 5, and 7, establishing the Division of Small Business Opportunity, DISPO, and its programs for advancing equitable access to public contracting for minority-owned, women-owned, and small business enterprises. Director Gibson, please introduce yourself and your team and take it away.

Yes. I'll go first. So, Adrena Gibson, Executive Director of General Services.

Adip Khan, Executive Director of Denver Economic Development and Opportunity.

Good morning. My name is Anne Parker. I am a Certification Supervisor with the Division of Small Business Opportunity.

Good morning, everyone. My name is Martin Gonzalez. I'm a Business Advancement Manager with Denver Economic Development and Opportunity.

Good morning. My name is Erin Krogh. I manage our compliance team for DISPO.

Thank you for having us here today. We're going to be going over the DISBO ordinance reauthorization. This is something that we do typically every five years. This process really began two years ago as DETO worked with contracting and outside partner to conduct a disparity study that would update data and metrics to be able to explain and reflect the disparities that exist. with minority and women-owned businesses across the City and County of Denver as well as the broader Front Range area. Once we completed that study late last year, we went through the process of working with community to reflect on the findings and to be able to update the ordinance accordingly and to ensure that it continues for the next five years and beyond as an effective program to address disparities and discrimination in the City and County of Denver. So a little bit in terms of the overview of DISBO, Division of Small Business Opportunity, it's really a program that we've instilled at the city and county of Denver to ensure that there's fair and equitable access to city contracting opportunities while we do one component. We have DETO, which is Certifying Small, Minority, and Women-Owned Businesses. We then work with our partners across the city and general services to ensure that we're establishing contract goals to make sure that those dollars are going within city procurements for our certified businesses. And so it's really the goal to address disparities and to ensure that we have a level playing field in the city and county of Denver. And really we see hundreds of millions of dollars a year. Last year we saw over $300 million from city contracts going to our certified businesses. If you look since COVID, we've seen over a billion dollars going to our certified businesses. So the program has been very effective in terms of meeting its goals and ensuring that we are reducing disparities in the city and county of Denver. And what you will see today with the changes that we are promoting with the ordinance, again, is not only the outcomes of the full disparity study that we conducted, but also we worked with a task force of representatives of the small business community the minority and women-owned business community to help us come up with the determination. So through several outreach and meetings and conversations, dialogue, back and forth reflections on what would be the best way to ensure that the program continues to be successful in the future, we came up with some of the changes. And we do have several members of that task force here today as well. So with that, I'm going to turn it over to Adrena to really start speaking to the restructured ordinance.

Yeah, good morning everyone, Adrena Gibson. This is actually a really exciting ordinance to be bringing forward, because again, it's about our community, and it's about our economy, and it's about the work we do here at the city, not in growing things, but also growing people and businesses. One of the biggest highlights that I'm gonna touch on before I pass it over to our subject matter experts is the way in which we're restructuring the ordinance for continuity, consistency, and growth of our programs. As it stands currently in the ordinance and ahead of authorization, our articles were organized by industry, so construction, goods and services, small business, and that created some confusion and not the type of consistency that we wanted to see for efficiency when businesses are working on city contracts. So we have since reorganized the ordinance by program. So rather than industry, it's now by program. So you have the umbrella of The division of small business opportunity in terms of authority, enforcement, certification, outreach, all of the core components and foundation of disbo and then it branches out by program. So now article 5 will be the program and article 7 is the program. So depending on the type of project that a city puts out, so if we have a requirement of an MWBE goal, then you go to Article 5 to learn everything related to that MWBE program. So the goal, how we count participation, how to comply with the program, what types of sanctions apply, et cetera. And same thing with the SBE program, everything related to an SBE defined pool project that would be led by the city and county of Denver, all of the requirements and protections are in that specific article. So I just want to call that out because it was a lot of movement and when you look at the ordinance, you'll see how things have moved around as such. With that being said, now we can get into the nuts and bolts of the key ordinance amendments. And I'm going to turn it over to our subject matter experts to share more of that in-depth information. And before I do that, I just want to highlight that this morning you all would have received yet another email from me that is outlining not only the framework of changes that you're hearing from us today, but the questions and responses to the briefings that we've had with many of you thus far. So I just wanted to call that out. And now I will turn it over to Anne.

Thank you, good morning. So I have the pleasure of walking the committee through the three main updates we made to certification. So again, certification is really the backbone of both of our minority women owned business enterprise program as well as our small business enterprise program. So it ensures that our firms really meet the standards of eligibility and that we're directing opportunities to the businesses these programs are meant to support. So I'm going to start with economic disadvantage. So demonstrated economic disadvantage is required for owners of small businesses for both of our programs. The current definition of economic disadvantage defines it as having a personal net worth at or under the federal personal net worth cap or PNW cap that USDOT established for its disadvantaged business enterprise program. This definition essentially tied eligibility for local programs to an external federal threshold and made the concept a little too narrow and overly rigid. So the updated definition defines economic disadvantage the way other similar programs do, which is based on a person's diminished ability to compete in the city and private marketplace due to limited capital and credit opportunities. So this update aligns us with other national and similar programs, provides disability flexibility, and is actually a more accurate and policy-driven definition. Quick note on personal net worth. The program will continue to use PNW as a measure of economic disadvantage. The ordinance still empowers DSBO to adopt the federal PNW cap exactly as USDOT sets it, but it also allows us to adjust it when Denver-specific economic data or conditions warrant doing so. Moving on to social disadvantage. So while economic disadvantage applies to both certification programs, social disadvantage, that term is what distinguishes MWBE eligibility. There's two updates we want to highlight here. Both are recommended in the disparity study. The first is we've added Middle Eastern and North African individuals, or the acronym MENA individuals, to that list of race and gender-based presumptive groups.

Again, that's based on disparity study findings.

And second, we've amended the definition of social disadvantage and clarified the pathway for individuals who are not members of one of those enumerated presumptive groups, but who can nevertheless show that they've personally experienced systemic barriers of prejudice based on identity or other mutable characteristics to qualify for this program. So these amendments aren't really, I would say, a major deviation from how we've conceptualized or defined social disadvantage currently. It was really more than the current ordinance. These provisions in these definitions were sort of stitched together across multiple sections and lacked a lot of clarity. So these amendments fix that, make it easier for us to apply that consistently. All right, just gonna keep moving right on to a couple of eligibility criteria, eligibility requirement updates. So there are a couple eligibility requirements written into the current ordinance that were essentially acting as barriers or delaying or excluding otherwise eligible firms from our programs. So first, we did remove a requirement in the ordinance that a business be operating under its current ownership structure for at least six months before applying. So I want to highlight that we removed that requirement, but we did not reduce program integrity. We found that while that provision was probably a very strong provision against fraud and other issues around ownership and business formation, that it was really It was duplicative of other requirements in the ordinance and was really, like I said, acting more as a barrier. So we're still ensuring that a business is operational, meaning that it's actively performing the work it seeks to be certified in. And we're still thoroughly evaluating management and control, both of those which remain in the ordinance and remain our strongest safeguards against fraud. Also note on that, that provision does mirror the DBE program, which our office is also responsible for administering, and we've been able to do that successfully for a number of years. We've also clarified, let's see, we also streamlined a couple other management control evaluations, focus on who is actually running and shaping the business, as opposed to sort of including some rigid technicalities in there. And finally, we clarified that certain indirect ownership structures, including models like employee-owned ownership structures, could still qualify for a program. And finally, just to point out that core elements remain unchanged in the ordinance. DISPO still evaluates small businesses to ensure that they meet all of our eligibility criteria. Yeah, I think that's it. Questions? I went through that much faster than I had been in previous.

We went through all of it first.

Oh, okay. Never mind. Then I'm going to actually pass it off to Erin.

Great. Thanks, Anne. So I'm going to go over some of the compliance changes. One big change that we made is we added an SBE goals option. So SBE is the Small Business Enterprise Program. It's our race and gender neutral program. MWBE is our race and gender conscious program. That's our women and minority owned business program. And the way we've been operating and will continue to operate is the MWBE program has goals where a percent of city dollars need to flow through the prime contractor to certified subcontractors. You can also have a certified prime who's self-performing. But typically speaking, that program is for subcontracting dollars to make their way to certified firms. And then we have our SBE defined pool where we say this is the defined pool of certified firms who can be primes on the project. And that's how we've been functioning. We're still doing that. We're adding to that that on the SBE side of the house, the race and gender neutral program, we can do goals. So it'll be the exact same structure as the MWBE structure where the dollars flow through the prime to the certified sub. And we'll have the option to do that on our race and gender neutral program. changes that we made. We made a few changes to strengthen protections for certified firms. Over the years, we've observed that there's some confusion. Some primes get a little bit confused about the difference between our prompt payment requirements, which require payment to certified firms within 35 days of an invoice. They confuse that sometimes with citywide prompt pay, which guarantees prompt payment to the prime. And so we added some clarification around that. Similarly, they sometimes get confused between our requirements and prevailing wage, so we tried to clarify that. And we made explicit that even if a firm is participating on a project, and the prime doesn't need their participation. So supposing the prime has a requirement to subcontract 15% to certified firms, they've already met that requirement. They're still using a certified firm, but it's in excess of that 15%. We've clarified that that certified firm still has all the same protections of our program, regardless of whether the prime needs that participation to meet the DISBO requirement.

Next slide, please.

Oh, yes. SBEC. So we've also expanded the concessionaire program. So SBEC stands for Small Business Enterprise Concessionaire. Concessionaires are businesses who are selling goods and services on city land. So current state, that's happening at the airport. We've added an option for us to do that downtown. So, for example, there's a coffee stand in Webb. If that coffee stand gets back up and running again, we could put a concessionaire requirement on it. We have also added goals for SBE-C. It's just the same as what I just explained about standard SBE. Same thing for small business enterprise concessionaires.

We can put goals on those.

And then we've expanded the definition of concessionaire to include businesses that provide goods and services to the concessionaires rather than strictly the enterprise who's running the concession. And then speaking about rules and regulations, we have been deliberate about making sure that the what is in ordinance, the how is in rules and regs. And so the rules and regulations is what we'll be picking up when we're done with the ordinance reauthorization. Current state, all this stuff already exists in rules and regs. Well, as Adriana described, we've reorganized the ordinance. We'll have to reorganize rules and regs to make it mirror that. But just speaking broadly about rules and regs, that's where we've got our administrative elements. The idea there is that we're going to keep all that administration in rules and regs so that we can modernize when we have technological upgrades that... We aren't requiring forms from firms that are unreasonable because we could get the information. Otherwise, that kind of thing that we want to be able to innovate and modernize and make sure that we're consistently aligned with our city agency partners and the feds.

So with all of this incredible work that promotes equity and helps us in the space of preventing discrimination, we didn't do this in a box. We wanted to ensure that we included the community from all sides. So from certified small minority women owned businesses to medium large certified small minority women owned businesses. We also brought in a lot of the prime contractors that we work with at the city as well. And definitely couldn't leave out our associations and organizations that support these businesses in addition. So we put together a task force. We met over a series of months. Again, an understanding that we did a lot of this in a short amount of time. We were very intentional about bringing the community in to participate in these conversations to get their feedback, their concerns, specifically with the ordinance, rules and regs, and we'll then pivot into rules and regs as well as bolstering the rest of the program in their space of process. We've done public engagement surveys for our certified businesses as well as with our primes. And then we've been consistent in sending out communication and outreach. We have a few of our certified small businesses here today and even some of the primes that represent them, associations and organizations as well here today. We appreciate their support because again, this is a chicken and the egg. So we are led by them and they are led by us. So it's important that we are yoked in that space. That was a lot of literal. That was very literal. But nevertheless, the community is important. Next slide, please. So this gives a good snapshot in terms of all of the work, again, we've done in a very short amount of time. It's incredibly critical that we get this ordinance reauthorized before expiration. And we've done that from the space of the disparity study to then meeting with the community, meeting with you all with initial briefings, and now doing a second round of briefings. We've been bringing presentations and this information through our procurement advisory group, which is an internal procurement contracting efficiency group that we started up this year. And now we're here today. So after committee, we will have first reading September 14th and again manifesting a unanimous vote on September 21st. And then we've provided resources within this presentation as well as a slew of emails that I've shared with you all just in full transparency. And without that being said, thank you.

Thank you. We have one council member in the queue. Before we go to questions by council members, we do have opportunity for 15 minutes of public comment. We have one person signed up. If you are here, the person who signed up said they were here in person.

Allie. Allie.

Allie.

Allie Sprague. Allie Sprague is here.

So before you comment, just so that we have a little bit of ground rules for those participating in person. Thank you for being here in person. Please come to the podium on the presentation monitor on the wall. You'll see your time counting down for those There's no one participating virtually. Please begin your remarks by telling council your name and city of residence, and if you feel comfortable doing so, your home address. If you've signed up to answer questions only, state your name and note that you're available for questions of councils. Speakers have two minutes. There's no yielding of time. If translation is needed, you'll be given an additional two minutes for your comments to be interpreted. Please stay on the topic. the hearing and please direct your comments to council as a whole. Please refrain from a profane or obscene speech and refrain from individual or personal attacks. So we just want to make sure that that we have that there, and at any rate, please.

Thank you. Good morning council members, team, council. My name is Aly Spray. I'm the President and Chief Executive Officer of the Hispanic Contractors of Colorado. We are a 36-year organization in the design and construction, and the pillars of our organization is to represent, advocate, and support minority women, veteran, and small businesses in the design and construction. What we started as Hispanic owned businesses has grown into represent local and diverse businesses. So we have around 200 members in our association from large general contractors to the one, two person shop. As Director Gibson mentioned, we were part of the conversation. We have been part of this discussion. I'm gonna take back. I live in Erie, but I have worked in construction for 25 years. Don't do the math, please. And I have been working in Denver mostly all my career, from a minority business, mechanical contractor, to a large contractor, to now having the honor to represent this organization. HCC, for the short acronym, has been a true partner with this small business office, with the city council, with council members, to represent the voice sometimes of entrepreneurs. Our entrepreneurs have a lot on their plate, and sometimes keeping up with all the stuff happening is not possible, so they rely on our advocacy. We get connected with elected officials, so we're part of this task force. We present our concerns, we have them vocal, and we appreciate all the small business goals, because we have some businesses that can only qualify small business and want opportunities. Last week I was at the airport celebration of some of this business graduating a program with airport and the stories about how they have grown their business from concessionaire construction. Is that why I'm supporting this ordinance and I request your support as well because we want to continue that economic power and they bring those jobs to the city. They invest in the city so I appreciate the collaboration with Director Adib and and Director Adrena for the collaboration and any questions you have, happy to answer. Thank you.

Thank you so much and perfect, a minute 58.

My kids will be proud that I kept it concise.

So we do have 15 minutes of public comment. If there's anyone else in the audience that would like to speak, please come forward. We've got two other hands raised. And so you will also have two minutes and so same ground rules apply, please.

Thank you, and good morning. I'm Suzanne Arkell with Zahn, Inc., and we are a small business owner. We're certified in all of the BEs, which is very important and one of the reasons that we're here today, to really get clarification. And I want to thank this committee, and I want to thank the people that work with the small businesses, the two departments, Economic Development, General Services. and because without their support but knowledge on how to navigate and deliver a program that creates economic opportunity for small businesses and to grow. I've been in business for 28 years. I would not be in business for 28 years if it were not for, I'm not just going to say programs, but platforms that really talk about the growth and scaling of small businesses. So almost every agency. Our company works in Denver as our home base, but we've been fortunate enough to have grown into working in Seattle and Chicago. So we understand the landscape of what's happening and growing the program. The program is uncertain. everybody having challenges with actually delivering. But what this does is bring certainty to an uncertain process. We're not going to stop doing what we do because if we do, we're going to sort of shut down the growth of our community. And that's not what we want to do. So I am asking all of you to please look upon this this ordinance favorably because it's hundreds and hundreds and hundreds of businesses, your constituents, that will continue to grow. And as a result of me working, I have been able to hire seven people. So if this goes away, then the livelihood of seven families goes away. So thank you so much for allowing me to present.

Thank you. Would you like to come forward, please? Let us know who you are and who you represent and take it away.

Thank you. My name is Deidre Garcia. I was a part of the task force that is proposing these changes today. And I'm hoping I don't have to start by emphasizing the importance of the equity that these programs build. I'm hoping everybody here is familiar with that and understands that there are businesses that if they didn't have this program would likely not be as successful as they are today. There's clearly a disparity. The study shows it. The study shows it every year. So I'm really hopeful that everybody understands that this program is designed to shore up that disparity because it represents inequity and a lack of equilibrium in our economy. But speaking on behalf of the task force, I just wanted everybody to understand that it was a very thorough very intentional and inclusive process. We had stakeholders from every area of industry. I myself was a certified minority contractor for 22 years. I retired from that and now I work for a large prime. And so it's easy for me to represent both sides of the equation. As a small business, these opportunities are clear and compelling and so important because otherwise I don't, I mean the disparity study shows statistically that we would not be granted these opportunities, right? As a large prime, I hope all of you understand how much we benefit from these programs because it gives us another area of competition. We literally compete with these programs. When you get into the 100 million, 200, 500 million, it's tough to distinguish your company from another who has a similar portfolio. One area where you can do it is the effectiveness of your small business program, how robust, how effective it is. So it's super important. And all of us, large, prime, small businesses, community organizations, everybody was there at the table. And we got a chance to literally thoroughly debate each and every change based on where we sit in the industry today. Adib Khan was kind enough to give me an hour with him one-on-one just so that I could express my gripes and complaints and hopes and dreams. So what is before you today is the result of a process that included literally all the stakeholders, answered all the questions.

Thank you so much. Will you let us know which prime you represent? PCL Construction. Thank you. All right, any, yeah, some break dancing too. Anyone else? Okay, thank you so much for your public comment. Let's go to comments, questions from members of council. Council Member Sawyer.

Thanks, Mr. Chair. Thanks, you guys, so much. I just had one quick question or follow-up, and really it's more of a comment, around the rules and regs versus what's written in the ordinance. I am fully in support of the way that you have restructured this to make sure that the operational things are within the rules and regs and the language of the kind of structure exists within the ordinance. That's the way it should work. That's not the way we always see it work. I will just make 1 ask of you guys, and that is that as council members, we have been burned by rules and regs before. Not with your agencies, but nevertheless within the city. And so, as you move to update these rules and regs, or kind of make any of these changes, if you can please make sure to keep counsel in the loop on that and make sure that we're aware of, you know. how those rules and regs get created, what the process is for doing it, because usually it involves a community engagement process of its own to do rules and regs, et cetera. We would really appreciate it because we sometimes do not get that information and then find out later that something in rules and regs is... causing things to happen that we never agreed to. So I would just really appreciate it. That's it. I'm super supportive of this. Thank you for all of your work. Great job. Really look forward to this moving forward.

I would just say, absolutely, we can commit to that. We will kick off that process as soon as the ordinance is reauthorized, and we will commit to making sure that we give regular updates on what those outcomes are.

I really appreciate it. Awesome. Thanks.

Thank you. Councilmember Watson. Thank you, committee chair. I want to say thank you so much to Director Gibson, Director Kahn, your amazing team, all the small business owners and associations in the audience. Thank you for the good work that you've done on this in such a short period of time. I have no questions. totally supportive of what you're proposing to move it to the floor. In a former life, I had SBE, DBE, MWBE, all the WBs work, and I share that because I understood the importance. of really ensuring that there are diverse voices in the field that we were in and providing that equity. I think this provides additional clarity on the work. Looking forward to the rules and reg discussions and maybe some more direct questions on the floor as this makes it there. But I really appreciate the thoughtfulness of this process and the good work that all of you do and the ways in which you are providing support to families across the city through your small businesses. Thank you so much, community chair. Thank you, Madam President.

Thank you, Mr.. Chair Likewise, I'm very supportive of this process. Thank you for the multiple briefings and going through all of the process. I think the reorganization is really smart and organizing it in a way so that you're thinking from the customer side and what that means for the small businesses being able to access the programs that are being offered. So I just want to thank you for the work. I know this was a big lift and I'm very supportive of it moving forward. And thank you to our speakers that came today. Thank you, Mr. Chair.

Thank you, Madam President. I don't see anyone else in the queue. I thank you for the two briefings. I brought this up in each of those briefings and I don't see it. I thank you also for the documents that you sent, I don't know, 15 minutes before committee. I did take a look at that and I didn't see my questions in that document. This predates you. When I started on council, I asked about including people with disabilities in the program. And when I started, it was mentioned that it was difficult to include because there are no questions in the disparity study about the disability community. So how can we make decisions based on things that we haven't even asked? predates you that I asked for there to be the inclusion of people with disabilities in the disparity study. Most recently, in both of our briefings, I talked about a group called Disability N, which has three certification programs or three different pads of certification. One is a service-connected veteran disability, another is a veteran disability not service-connected, and then a certification that is a disability-owned business. And they're a national organization that does that. I think in the first briefing I asked if you would include them in the process and they were unable to make one meeting and so then the second briefing, Director Gibson asked if, you know, if they could be included. I think you said you'd reach out to them directly. I'm just curious as to where that is. I don't see, I saw one reference to disability in the presentation. Thank you for adding that because it wasn't in the document that you sent us.

Yeah.

I'm happy to touch on it a little bit.

And then I can wrap up.

I think, one, going forward, in order for us to be able to implement anything in the ordinance and structure, we'll need to have that database. And that's something we'll need to work on and something we can update as we move forward. So if we have a data set that's independent that can demonstrate it, then we can legally create a justification for programming. What we did do, however, in the certification changes, we looked at social disadvantage specifically. We brought in the definition. And so we want to provide a pathway for individuals who are facing systemic barriers and to make that pathway as easy as possible so that it doesn't have to be a prequalification. And so we clarified that disadvantage may arise from racial and ethnic or gender prejudice, but other systemic barriers that are tied to identity or other immutable characteristics. So, if somebody wants to be included into the program and has a systemic barrier that they are overcoming, there's a process for them to be able to apply, define what that is, and for us to be able to ensure that they are still a certified firm and would have access as the other firms do. That is something that is not maybe codified specifically with individuals with disabilities, but absolutely applied to those individuals.

Yeah, and I'll just piggyback on what Adeeb shared. So Casey Oakes with DisabilityIN did attend our task force and as such we've also done research to ensure that we can show the data that we have people with disabilities that are participating in the program as well that are actually certified. To Adeeb's point, we want to be able to continue to push that forward and so that's that takes the space within our rules and regulations and our outreach and involvement in that space. So while it may not be codified as saying people with disabilities can't apply, it is absolutely inclusive as well as our ability in terms of outreach and process to include that.

I think there was a public comment about how If not for this program, communities might not have an opportunity to participate in the city. I think you're suggesting the disability community is part of it at all, or just an other box, which I guess it's fair. We've never had someone who's part of the disability community on council before, and that representation is important, and it matters, and we were able to achieve things. uh, post, um, you know, post inauguration that we probably wouldn't have achieved if not for, um, you know, representation with the disability community. I just, I want to make sure that we're not a, um, you know, we want to be intentional about our inclusivity and so, uh, um, and other programs. I just hope that we can be more intentional about specifically including disability in the future disparity studies and, um,

And I can commit to partnering with you and other groups to ensure, because what we can do is we can do outreach, we can do marketing, we can ensure that the disability community is aware of the opportunities presented to them with the creation of the new stipulations that we have so that it doesn't feel like another, but it's a deliberate attempt to ensure that if folks are facing systemic barriers that they know there's an opportunity to be part of the program. And so what I can't commit to is deliberate outreach and doing that targeted and even partnering with you and other folks you recommend to achieve that.

And to that point, outside of the outreach perspective, we can also work with our consulting group that did our disparity study to look and see what type of amendment we can add on to that to do some additional research so that we can add it in.

Thank you. Anything else from colleagues? No. This is an action item. Second. All right. Moved by Council Member Sawyer, seconded by Council President Romero-Campbell. Any abstentions or dissensions? No. Great. This will move forward. Thank you so much for your presentation. And let's transition to our next item, which is a briefing. 26-12-21, Department of Finance Budget Potential Overview. Whoops. We'll pause for a minute or two while we do the transition.

Did you and Torres get them? Relaxing dresses. Both of you, I was like, why didn't I wear that? Relaxing dresses. I bet you do. I do. I mean...

All right. I like how you're bringing receipts, literally.

Really tough questions that you all have that I may not be able to answer. We've got a few of the 2026. Very good budget book.

So please introduce yourself and your team and take it away.

Thank you. My name is Justin Sykes. I have the privilege to serve as the director of the city's budget and management office.

I'm Jackson Brockway, capital planning and budget manager for the capital management financing team with the Department of Finance.

And I think we are here to really preview the 2027 budget, which will be released here in just a few short weeks. I think we have several goals this morning. First, we want to help members of city council, members of the public who might be watching know how best to interpret and understand the city's annual budget book. will help you locate answers to some of the likely questions that you and members of the public may have we want to provide some updates on how we're approaching a few aspects of the 2027 budget specifically related to how we've historically and then how going forward we're proposing to budget for on-call personnel as well as the excel franchise fee which will expire at the end of this year and will be on the ballot November 3rd for voters to decide whether or not to extend for another 20-year franchise. We want to help orient members of council, members of the public to the structure of the budget book, what they can expect to find in the agency narratives. And then lastly, we want to hear from you. We would welcome your questions, your feedback on how we can make the budget book better. We've been really grateful for the opportunity over the last year plus to partner with Council on some potential changes to the budget process, which will go to voters here in November. we're excited to hear your feedback on the quarterly financial report that we've now shared two versions of and look forward to sharing again in a few more months and then field any questions that you all may have. So just in terms of where we're at for the 2027 budget process, we kicked off back in April. Jackson and I, along with our city's chief economist, Lisa Martinez Templeton, who is here in the gallery, presented at the same committee. And since then, we've been working with agencies over the last few months to try to budget for next year in what is a slightly more positive outlook, but still a very constrained outlook relative to where Denver has been at. And in a few short weeks, we will be releasing either on or I think more likely before that September 15th charter deadline that currently is in place, the proposed 2027 city budget. That will be followed by budget hearings, I think with 18 different city agencies the week of September 21st through the 25th. Then I think council in early October will convene to hold a budget workshop where it will give feedback on that proposed budget. Typically, there will be a letter that city council sense to the administration and the Department of finance and then on. Third Monday of October is the charter deadline to release the revised budget, which incorporates oftentimes that feedback that the administration receives from City Council. That will be followed the next Monday by the charter required public hearing on the proposed 2027 budget. It takes place October 26th this year. and then the very next week will be city council's opportunity to make formal legislative amendments to the budget. That Tuesday will be the midterm elections where we will find out whether or not voters support an extension of the excel franchise something i and all of us i think will be watching very closely because that has a big impact on our 2027 budget and then by the friday of that week this year november 6 is the last day for the mayor if there were to be any amendments to the proposed 2027 budget to veto those amendments. Council then on the following Monday, November 9th, has the opportunity with a two-thirds majority vote to override any mayoral vetoes and then also to adopt or not adopt the proposed budget. If council votes not to adopt the budget, that budget still takes effect as if it were adopted. And then finally, in the fourth Monday of November, city charter requires council to approve the annual long bill to set those appropriations for the following year. Diving into what the budget book is, I like to think of it as trying to achieve several purposes. One is as a policy document. How any government spends money is one of the biggest policy decisions that it can make. I think it's been said that a budget is reflective of a city's values or a state's values or the federal government's values. And so that's one Really key reason why we try to put this all down in the budget book is so that city council can see where some of those prioritized areas of spending are for the subsequent year. The budget book is also intended to be a financial plan. It looks at where the money is coming from, where the money is proposed to be spent, and it also is a guide to those 40 or so different agencies that we've got here in the city. Not only those agencies' org structure and mission, but the services strategies whether they're hitting their key performance metrics, what's changed? One of the things we try to articulate in the budget book are those significant changes from the 26 budget to the 27 budget and call those out in budget bullets that I'll show an example of. If anyone is interested, the 2026 final version of the budget book with the Council amendments is available online at denvergov.org backslash budget. That is where the 2027 budget will be made available as soon as it is released to City Council. The budget book is, as you can see here, a fairly lengthy document. It spans about 750 pages, contains just a wealth of information. And to try to simplify it, we break the budget book into three different volumes. The first volume looks at citywide, all of the different things kind of at a roll-up level. This is where you will find the mayor's letter. where the mayor speaks to some of the key priorities and the rationale in the budget that's proposed for city council to review and vote on. That's where we'll speak to some of the budget highlights. Those are things that apply to most or all agencies, things like employee compensation, Typically, we'll provide details there of the collective bargaining increases that are anticipated for the next year. Anything that is broadly applicable either to the entire city or to a broad swath of different agencies. There will be a strategic framework section in that volume one that will look at some of those key citywide goals. There will be a summary of the general fund of all city funds. There will be a summary of special revenue funds, of grants, of the city's proprietary funds, and so that encompasses both the enterprise funds, which operate like businesses, that's the Gulf Enterprise and Denver International Airport and the Wastewater Enterprise, as well as the city's internal services funds for workers' compensation, for our asphalt plant, for our medical and health self-insurance funds. And so that's where if you want to understand kind of that 50,000 foot bird's eye view of the city, I would recommend starting. Volume two gets into the agency by agency details where every agency in the city has a narrative that encompasses a lot of different aspects of that agency, its mission, its services, its key performance metrics, and a lot of tables. There's a budget table with dollar amounts. There's a breakout of the full-time equivalents for that agency and how they're allocated against either different divisions or cost centers. That budget table will also incorporate not just the general fund, but also any agency special revenue funds or capital projects or grants. And then finally, that is where for each agency, you can find the significant changes bullets where we try to call out what is causing a particular agency's budget to either go up or to go down from one year to the next. Here in a few slides, I'll walk through an example of one particular agency to try to make sure members of council, members of the public can find all of those key components. And finally, the third volume is our capital budget, which Jackson will speak to and provide some examples on as well. Starting with understanding the general fund, I think there's a few really key schedules or reports that I would want to call your attention to. First, if you want to understand the general financial condition, kind of pulling together revenues, expenditures, fund balance, you would go to what we refer to as the Schedule 100 in Volume 1 of the budget book. If you want to see the composition of the general fund revenues, what are all the different sources, where is that money coming from, you would go to what we refer to as the Schedule 100A. If you want to see how that revenue is proposed to be expended, you would look in Schedule 100B to find proposed appropriations for every agency. and this will also include what the actuals were for last year, 2025, what's appropriated in the current year, 2026, and then what's proposed or recommended for next year, 2027. Just kind of a side note, one question I had as I was preparing for this presentation is where do those names come from? Schedule 100, Schedule 100A, Schedule 100B. I think what I've learned is that those are actually not standard names. Those are something that Denver has just used for many decades to refer to these different really key tables. So if you were to open up another city's budget book, you might find something that's called a revenue summary or general fund expenditure summary, but you would not find Schedule 100, Schedule 100A, Schedule 100B, like we refer to those different schedules here in the City and County of Denver. In terms of what that volume one section includes, this is not an exhaustive list, but it's some of those key sections. Like I mentioned earlier, the budget highlights is really looking at some of those macro trends or themes, things that apply citywide. That's typically where we would speak to any compensation changes or any changes related to DERP or something like that. Financial policies is a section at the front of the book in volume one. where we talk about the different rules and things that we abide by in developing a budget. This is where you'll find more details on our fund balance policies, where you'll find information about vacancy savings, which is something where when we budget agency personnel We reduce it slightly on the assumption that not every single position in an agency is going to be filled for 100% of the year. There are tiers for vacancy savings. And so a very small agency of less than 10 FTE, or full-time equivalents, would have zero vacancy savings applied, going all the way up to a larger agency where we would apply 3.75% vacancy savings. Uh, we also get into the details of all of the different grants and special revenue funds that the city agencies administer in the case of grants in the case of cash basis, special revenue funds. We provide estimates of expenditures in the case of appropriated special revenue funds. We would include the proposed appropriation amount. And so I think. The caveat there is for a grant, it could be a grant that is maybe $500,000 over three years. What you would see in the budget book is just the estimated amount of expenditures in the proposed year of the budget. So for 27, if that were a grant that the city was administering either in 2025 where we had actuals or in the current year, you would see those actuals from the prior year and the estimate of what we would spend in the current year. We also provide for all of the different grants and special revenue funds a short description explaining what that grant or special revenue fund is intended for, and in the case of grants or special revenue funds, where the money is coming from. Is it a federal grant? Is it a state grant? Is it a fee or a fine? Is it a transfer? Where do the revenues to provide those services or that programming originate from? In the first volume, you'll also find a debt service section. This includes details on our long-term debt, our lease obligations, as well as those proprietary funds, enterprise and internal services funds. And this is also where you'll find the appendices to the budget book. I think one thing you'll note is that we actually add to the appendix every subsequent version of the budget book. And so there are three versions of the budget book. There is the September version, which is what will be released by that September 15th current charter deadline. There is the revised budget, which will be the version that incorporates feedback and makes any corrections or edits that's released on October 19th. And then there will be once all of any changes are made through the amendment process. A final version of the budget book that comes out typically in December or January, reflective of any final changes. And in each of those subsequent versions of the budget book, we will typically add to the appendix section. I think one thing we include in the final budget book is all of the Feedback from Council that then the mayor responds to in a mayor's letter, for example, in the final version of the budget book will also include a synopsis of how Denver sales taxes and property taxes compared to other jurisdictions. We don't typically include that earlier on because that's still in flux for those other jurisdictions. A few key updates that I want to make sure council is aware of heading into the release of the proposed 2027 budget. For on-call personnel dollars, what we've historically done in many cases is impute or estimate a full-time equivalent or FTE count. So just for a simplified example, if an agency had a million dollars of on-call budget, And that typical classification that they would hire as an on-call employee was at an average salary of $100,000 a year. We would back into or estimate that there's roughly 10 FTEs worth of on-call budget. I think this is something that we are no longer doing for the proposed 2027 budget. It is something that is inconsistent. I think what we found is that in practice, agencies often have more than one classification that they're deploying those on-call dollars for. And so I want to flag in advance, and you will see this called out in the budget highlight section of the 2027 budget book, but for some agencies, particularly those that use a high number of on-call employees, like Parks and Recreation, or like the Clerk and Recorder's Office, it will look like there is a decline in those number of full-time equivalents in that agency, but that is not actually the case. That is just a change in how we are reflecting the on-call budget where we would no longer reflect those imputed on-call FTE in that FTE count for those agencies and so we'll call this out you'll see this in the budget highlights you'll see this in the individual narrative sections for those agencies but just want to make sure that when you look at the parks budget parks and rec budget for example and you see that it's declining by 100 FTEs you know that that's not actually the case that's just due to a change in how we're reflecting on-call budget in that section of the budget I think another really important flag for city council is with regards to the Excel franchise fee. And so by the time we release the initial budget, by the time we release the revised budget, by the time city council votes on any amendments, we will not know whether or not that Excel franchise fee has been approved by voters to be extended for 2027. We estimate that if voters were to extend it, that would generate about $32 million of revenue in 2027. But because that revenue will not be assured by the point we're releasing the budget, we don't believe that legally we are able to budget for that. And so what that means is in the initial budget, you will see a budget that is $32 million approximately lower than it would otherwise be were voters to approve the Excel franchise fee on November 3rd. what we will also provide is an accounting of if that is approved how those dollars from that 32 million associated with the excel franchise fee revenue would be allocated and so that is something that is not uh legally binding, it is essentially a proposal and what we would envision doing is if voters on November 3rd approve the XL franchise fee and the city can now bank on that $32 million of revenue in 2027, we would have a companion supplemental appropriation ordinance that we would bring forward along with the long bill on November 23rd. And so we'll have a lot of detail on that in the budget book. We'll have a lot of detail when we present at the budget hearings, but want to just make sure that's something council is aware of, that because of that $32 million of revenue, we won't be able to budget for That's something we're having to think carefully about. And this is really based on how we handled in 2012, the voter approval of 2A, where in that instance, the city laid out how it would spend those dollars if voters approved, but did not include them in the legally proposed and then in the budget that ultimately was legally adopted until after voters had approved that ballot measure 2A to allow the city to restore credited mills and bring in more property taxes than if that had not passed. Moving on to volume two of the budget book, this is what you will see for every agency's narrative. There will be an org chart. How is that agency structured? There will be a mission for that agency, as well as a summary. Each of these missions are driven by that agency. And so I think you'll see a little bit of inconsistency in terms of capitalization and wording and how things are framed there. But that's because we're pulling directly what it is that that agency states as its mission. You'll see a summary of the agency. You'll see a list of what it is the services are that the agency delivers. You'll see strategies for the agency. How does it plan to achieve its goals? You will see performance metrics for the agency going back I think to 2022 or 2023 with actuals looking forward to a projected amount for the current year and for next year. And then you will see budget tables. These will have detail on what the budget or how much we anticipated cost for that agency to fund certain services, where that money would be coming from, how many FTE or full-time equivalents are allocated to each division or cost center. And then you'll see those significant changes bullets of what is differing from last year to this year. This is one example that I wanted to walk through quickly before turning it over to Jackson for the Department of Safety. And so here, this is an excerpt from that narrative for the city's Department of Safety. And under services, you can see that one of the areas of the Department of Safety that's described is safety management. And it describes here what that means. agency or that division or that cost center of the Department of Safety handles, and it lists out several of the areas that fall under that safety management division. It includes the public integrity division, the employee wellness program, safety finance, and the safety human resources team. That safety management division is then reflected here in the department summary for the Department of Safety. So what we first show is the general fund expenditures by what we refer to as agency. Some departments refer to this as division or cost center, those are basically the major component units that make up an entire department. So here you can see that same safety management that was described in the narrative is being called out here in that general fund department budget summary for the Department of Safety. where you'll be able to see those prior year actuals, the current year, what's appropriated, and then the recommended amount for next year. You will see two columns with the variance, and that's the variance between what's proposed for the subsequent year and what is appropriated for the current year. First, we break out an agency's overall general fund budget by those component units. So in this case, safety management, safety programs, the Crime Prevention and Control Commission, Community Corrections, and the 911 Emergency Communications Division. And then we take all of that budget and then separately slice and dice it by the type of expenditures. So personnel, services and supplies, capital equipment, internal services. Down below, we add in any special revenue funds, any grants that that agency administers, And then that helps us arrive at the total budget for expenditures for that agency. Down below that, you can see a breakout of the FTE. So you can see here for the overall Department of Safety, there are 264.76 FTE budgeted in 2026. And then that's further broken out by those different divisions later on in the budget narrative.

As a time check, you're just over halfway through your slides and we do have questions from council, so just consider leaving time for questions. Thank you.

We certainly will. Let me crank through this in another minute or two, head over to Jackson, and then we'll hear your questions. This is an example of significant changes bullets, what's changing year to year. And then this is a look at those budget detail tables where we take that safety management division of the Department of Safety and actually break that out in more granular detail where you can see for just that safety management section, what is the amount of budget for personnel what is the amount of budget for services and supplies so on and so forth this is also where you'll see any grants or special revenue funds administered by that division and then this is also where you'll see a further breakout for the very large agencies where you can see on the right hand panel that that safety management division is actually comprised of sub units, the administration group, the public integrity division, the DOS finance section, human resources, and the Department of Safety Wellness. With that, I will turn it over to Jackson.

Perfect. Thanks, Justin. I appreciate it. We'll go through this pretty quickly to get to questions. As you go through the 600 pages of volume 1 and 2, worry not, we have more great financial content for you in volume 3 of the capital budget. So, the volume is laid out similarly, but there are a couple differences I wanted to point out. So, in terms of how the volume is organized, it does work similar to the operating sections in that we will have a high level summary of the overall capital improvement program. It'll go into a little bit of our processes, how we work with our agencies on capital delivery. It'll also discuss a bit around how the annual budget works with the six-year capital improvement plan, which you'll recall we are updating for a 27 to 32 timeframe. The 2027 appropriations and the 2027 budget are the first year of that plan. From there we get into policies, so our financial policies and fiscal accountability rules that govern capital spending. And then we get into our individual capital tables here. We have an overall overview by all of our funding sources, then into individual financial summaries for each funding source. So we go to the next slide. The capital volume is organized by funding sources. So we have I would say what is that 8 principal sections of the budget book organized by funding sources. So it is by similar Justin alluded to the schedule 100. we do this the same in our capital funds with schedules, the 30, 31, 35, 36, and so on. This is a great resource. I'm happy to talk more about these individual funding sources, but we organized by Winter Park first. This is generated through a lease and operating agreement with the Winter Park Recreational Association that supports parks and recreation uses only. We have our capital improvement fund is next in that volume. That is what we consider the capital general fund. It is our most flexible funding source. It's supported by principally property tax mills and highway user trust fund. That is our most expansive source, as I mentioned. And so that goes to a variety of improvements across our transportation and facilities portfolios. Then we have our State Conservation Trust Fund. These are a portion of Colorado lottery proceeds distributed by the Colorado Department of Local Affairs that is also available for parks and recreation uses only. We then have our Legacy Capital Fund. This is a voter initiative that was approved, I believe, in, gosh, Justin, 2018, 2017. I'll defer, I'm happy to follow up on that, but that is the parks legacy fund supported by a dedicated 0.25% sales tax that is reserved for parks uses only. So not eligible for recreation. It's a nuance that's different from state conservation and winter park. From there, we have our 2018. Thank you, Justin. That was great fly fire book. From there, we go into our bond funds as well as our other special revenue funds sections similarly to operating grants. Those report on only estimated expenditures. So, our bond funds, any issuances of bonds go back through city council. We have a lot of great resources to be able to track and monitor spend on bond funds. The budget book in volume 3 is 1 way to do that. Finally, our back of the book sections detail our Schedule 39,000. That's the Facilities Development Admissions Fund. We also refer to that as the Seat Tax Fund. So that is a special fee assessed at city-owned performance venues and can be used on maintenance improvements on those venues only. Finally, the Volume 3 wraps up with our enterprise funds. We have four capital enterprise funds that are listed in the book, I should say. We have wastewater. sidewalks, golf, and environmental quality that all find their way into the annual budget book. Going on, just one nuance I wanted to point out. Again, we do appropriate very similarly in terms of fund and cost center, but we also appropriate by capital program. So that is a feature you'll see in Volume 3 that you won't see elsewhere in the budget book. These are really focused. The capital programs help describe a particular asset that is being funded or a particular program that is being funded. And so skipping over to the next slide, I just wanted to walk through an example of what that looks like and how you'll see that in the budget book. The example here we have today is PZ041. Each capital program has a code that goes with it, and that supports the asset of street and alley Street and alley asphalt maintenance. This is our, this is our paving program. This is generally our largest program each year. And so I wanted to call out that example specifically. So each capital program has that program code where you see the appropriation. But it also has a description narrative description that entails what the work is being used on and it can only be used on. what is described here in that narrative. So if you don't mind skipping to the next slide, Justin, you can see the description here and you can see the description of some of the other capital programs here, but focusing on the streets, excuse me, the Citywide Street Road Mill and Overlay Program. Again, once those appropriations go into the capital program, we can only use them for those purposes. We can't take paving money and go put it towards signals. We have to keep and spend within those capital programs that helps us keep and track our spending and implementation on projects within those specific assets. So, with that, I'll turn it back over to Justin to round out the presentation.

Just real quick in closing, I want to make sure you all are aware every year we submit our budget book to the Government Finance Officers Association. They provide feedback. And if they deem it something that meets all of their standards, they will award us the Distinguished Budget Presentation Award. We've received that since at least the late 90s. And I think welcome feedback. If you all have feedback on how we can make the budget book better or easier to follow or more accessible, let us know. I think always looking to improve. One last update is on the Q2 quarterly financial report. Uh, this is 1 example of where we received some really great feedback from city council and took a 1st pass at trying to implement that feedback. And so would welcome any further feedback council has on that Q2 financial report. Or if you have any questions about that, I had to try to feel those as well.

Great Thank you. Council member.

Thanks, Mr. Chair. Thanks, you guys. Jackson, quick question for you. The slides aren't numbered, but on the enterprise, or if they are, I can't see it because it's in the bottom right corner. On the enterprise funds, why isn't the airport capital included in there?

It's a great question. I know we do have a section on the airport elsewhere in the book, I believe in volume two.

Yeah, because it's an agency, right? So the operational side of the airport goes in there. That's why I'm just shouldn't the capital side go in there?

The enterprise, we've added narrative sections about the airport. We can think through that in 27 generally there all of those enterprise sections have specific appropriations that are called out. And so the airport doesn't have appropriations set in this budget book. So we want to record that information, but there's no appropriation needed for for the airport. So that's why you don't see that in that section.

So I really appreciate that. And the airport is weird because the FAA requires it to be an enterprise fund, but it is operational and capital. So it's just for the public. So it's a little confusing. Right. But like having it split out this way and not having the airport capital piece in the enterprise funds. just looks weird, right? And having it be an operational, but it is an enterprise fund looks weird. So I don't know how we do that differently to make it more transparent for the public, but I feel like, Let's think it through a little more.

I think it's a great point. We'll take that back and think through how to do that.

Okay. I appreciate it. Thank you. And then in terms of Justin, the quarterly report that you sent us that has a little bit more clarity on the financials and like less narrative and more kind of big picture. Really appreciate those changes that you guys made this time around. This was the 2nd time you had done it and took some feedback, particularly from council member Heinz on it on what would be easier for us to see. Really appreciate it. I think it's getting closer to where we want to be the 1 piece in there that I think was a little bit confusing and you have it in this presentation, but it wasn't like, super clear in that. Page was that we are 2.3% above where we had anticipated and budgeted for in 2026. Um, I don't know how exactly you do that in the right way. Cause it's cause you don't get those numbers except for, you know, if by quarter. So, like, the most recent 1 is in June and here we are at the end of August. So. I don't know, like. How to make that better, but it would be helpful for us to sort of have that 1 last piece of big picture. We're doing better than we thought we're doing exactly how we thought we're doing worse than we thought. I don't know.

Really appreciate the feedback. I think you can can look at different ways of maybe emphasizing that number. I do want to just clarify that is. relative to last year. So the 2.3% is as of Q2 2026, how much above we are over what we had brought in as of Q2 2025. I think we are, you're absolutely correct. We are trying to just a tad better than we thought we would be. But I think that's where we try to be really careful about looking at a few months or especially one or two months and look at things across a wider time horizon.

But appreciate the feedback if there's any other feedback let us know and happy to try to incorporate that in any other items Yeah, no, I just appreciate you guys taking our feedback from June I'm like wait, what was three months ago from the June report?

And and making those changes for the must have been May I think it was the 4Q1 report that was released in May that I think you all shared feedback with us late May early June

Yeah, so appreciate that. Um, and then just last kind of, I'm not sure if it's a question or a comment. So you said the Excel franchise agreement. Um, we will do what we did in 2012, which is appropriate that 32Million dollars separately because, um. Because we don't know if the voters are going to pass it or not. And so we can't budget for it. Right? And that's standard operating procedure. We do this a lot of different things when we're doing collective bargaining with employees and all different kinds of things that don't finish by the time the budget book has to come out. We have to do things differently to reflect that in the next year's budget. Totally get it. However... These are new dollars then, and that falls into council member can each is charter change that came in 2021 that requires council conversation and approval and appropriation of those new dollars. So, I'm just trying to figure out how I think it was 2 G. I'm just trying to figure out how. Is the Department of Finance viewing the budget conversation as a whole as the required conversation with council about where those dollars are going? because this is a rare time that this has actually happened, right? Other times that this has happened with CARES dollars, with ARPA dollars. And so we had to appropriate those dollars because of this charter change. We have to appropriate these Excel dollars because of this charter change. but I'm not convinced that the budget conversation where the mayor presents his budget to us and we get to shift around the margins to try and fund our priorities as council members is the right place for that $32 million, 30.2. Yeah. I don't think it counts is what I'm saying.

So, appreciate that. Let me share with you how we're thinking about this and we'd love to sit down and talk further. So, first and foremost, it is not going to be built into the budget how this $32 million will be spent. Right. However, right now, the budget for 26, for 25, 24, going back to the last 20 years, it had built in that revenue from the excel franchise fee and so if we assume we're not going to get that money basically our budget drops by 32 ish million dollars and so i think what we're trying to avoid is having to actually um Make really hard decisions about where would we cut 32Million dollars and so that that would be where. In what we released in September, we would show city council. Here's the revenue that we feel confident we can bank on for 2027, which does not include that 32Million. this part over here is what would go through that formal legislative process for the budget separate and apart from that is we we would say because that 32 million dollars approximately is already built into the budget here's what we would recommend spending that on that would be separate and outside of the budget If voters ultimately ended up approving that, council would get to take that supplemental appropriation ordinance up separately. Council could make any modifications to what we would have brought forward as that proposed supplemental appropriation. Factoring in that revenue is right now in our base. And so I don't know if that helps, but glad to talk more. And this is something that we've dealt with on a much smaller scale. Right. And typically, when we deal with it, It's new revenue coming in in this case its revenue that would go away if voters didn't approve it And so it's a lot harder than just saying if it were new money Here's what we would do new and different with it because it's kind of built into what we're doing already right now Yeah, I really appreciate that.

I will just say I It's complicated. It's more complicated than that, right? Because from the Department of Finance perspective, everything you just said makes 100% logical sense. And from the Denver City Council perspective, everything you just said flies in the face of that charter amendment that was approved by the voters. And so we have a little bit of a conflict here with that Excel franchise money should the voters approve it because it does sit in this weird space. where it falls into 2G. And what 2G said and the purpose of it was that if there are unbudgeted new dollars that are coming in, that that requires a conversation with City Council about where those dollars go. And what you have just said to me is the Department of Finance already spent those dollars We just can't actually put them in the budget until, you know, already appropriated those dollars and budgeted for those dollars. We just can't put them in the budget until and assuming the voters approve it. So this is a super unique and rare situation that I think we need to think through and talk about a little bit more because from our perspective, what we do is scrap and scrounge for less than 1% of the entire budget to fund our priorities as city council and especially in years like the last few years where the budget has been declining, we haven't had the space to take dollars from the undesignated fund balance and appropriate those for our budget amendments. What used to happen under my first term was the undesignated fund balance was solid. Our fiscal rules require it to be at 15%. The mayor's office always budgeted to that undesignated fund balance at 20%, which left 5% in that undesignated fund balance for council members to look at the budget, look at our priorities, see where they're not matching up, and have dollars available to appropriate for our for our priorities, still respecting the mayor's priorities and still respecting the fiscal rules that require a 15% fund balance. So here we are in a space where we don't, we're not even hitting that 15% fund balance. So there are any dollar council members would use to appropriate towards our priorities would come from some other agency. Right? And here we have 30 odd million dollars if the voters approve the franchise agreement. That is a big deal to us. and to have the mayor's office already have a plan for where those dollars are gonna go without consulting council about it and counting the fact that council has to appropriate those dollars as the conversation, but what will come to us in committee is a full plan of every single one of those dollars already spent, that's a problem for me. And I think that that's probably a problem for other council members as well. So I think we need to think about that one a little bit more. Thanks.

Thank you. Mr. Sykes, you mentioned that you wanted to be conservative and not include the $32 million. I would say Councilmember Sawyer is saying, you know, if Department of Finance wants to be conservative and not include the money, then it shouldn't include the money.

I'm not going to go through that piece again. I just think more discussion needs to be on that. So once I heard that, that's when I jumped into the queue. Two quick points because we're getting close to time. Really would love to know kind of the timelining from both of your perspective. You don't have to tell me now, but just by email, what we're looking at when it comes to the independent agencies or any impacts. on them based on forecasting. I know we looked at the year-over-year based on the quarter for the reporting that you all provide us, but the total forecasting of where agencies are at would love to have a better sense to the clerk's office, the auditor's office. What are your thoughts as far as forecasting as to any impacts? I don't need a narrative now, but if you could provide that to me. And then also clarification on where are we at when it comes to our reserves? How close are we to the 10%? I know I've- 15 is the goal. I know what the goal is. Trust me, I don't sleep during budget because I know the goal. We have been under the goal consistently. So I would like to know as we are beginning this efforts before any of our process begins, where exactly are we at? Are we at 15? I thought we were below. I've got the notes. I don't have it in front of me. So those are things that I would like a little catch up on. And then Jackson, I'll touch back base with you on the capital stuff. Thank you, Chair.

Council Member, I can speak to the fund balance piece. And so I think that the important thing to keep in mind is that when we built the 2026 budget, 2025 was still in progress. And so we didn't know where we would end 2025. What we projected was that we would end at about 10.3%. The good news is we ended... over a percent higher than that. We ended at 11.4% fund balance with about $196 million in our reserves, which was better than we thought we would end 2025 based on underspending what had been appropriate. For 2026's budget, right now, based on the current revenue forecast and the current expenditure forecast, we're projecting to add about $1.2 million To fund balance, and so if that were to happen, that would slightly increase the fund balance and we would be at based on the lower expenditure amount about 11.8% of estimated expenditure. I can't remember that number.

Thank you, Councilmember Watson. Just one comment, the disadvantage of being chair is you go last. Just one quick thought. You mentioned that the budget book is a values document. I would agree with that. I have talked with some of the agencies about how we have Um, sometimes we have values in, um, in our presentations that have no dollar amount. Um, so, uh, like, for example, see, for us to school vision 0, uh, those are things that I've challenged Dottie specifically to to actually create a dollar amount and associate it with because. we have a requirement of a balanced budget. And so understanding exactly what the dollar amount is for those priority projects, I think would be useful and helpful as we consider the budget a values document. So as you're going through the budget process, I would encourage Those 2 projects in particular, or priorities in particular, but in general, if we can associate the values with the dollar amount, I think that would be very helpful for for us as council members and for the people of Denver to understand. The importance of those values. Thank you. Thank you. Any final comments.

Appreciate the feedback. I think something we can dig into. I know those programs span operating and capital dollars and I think. Something we can look at trying to frame better for council.

Yeah, we've had some conversations with the DOTI team on how to report those. So we'll be looking at that in a bunch of them.

Got it. All right. Thank you so much. There's one.

Just one real quick thing because we originally when we had the chair switch and I was just looking at the calendar again because I had put in the queue a detailed revenue forecast like we got last year. because I think we found that incredibly helpful. I don't know if that's anything on the books, but just wanted to ping that. I see that it's been canceled, so I don't know what's going on with that.

I think as they were preparing, they were going to put that into the budget hearings. Okay. They said it was going to be the same presentation if they have a session.

Thank you. I'm happy to chat about that. So one consent item, no one's pulled it off. We are adjourned.

Thank you.