Denver is “maxing out” its credit card with 2017 GO Bond, and housing didn’t make the cut
Denver City Council members still want to squeeze in a few more projects. “I would recommend we do not push it any further,” the city’s CFO told them.
The $937 million bond package that Mayor Michael Hancock presented to Denver City Council earlier this month represents the maximum that the city can safely and responsibly borrow without raising taxes, Chief Financial Officer Brendan Hanlon told the Denver City Council Monday.
“I would recommend we do not push it any further,” Hanlon said.
That means Denver City Council will have a hard time adding any additional projects and likely will have to find cuts somewhere in the package if they want more money for, say, sidewalks or libraries.
In their first discussion of the bond package last week, council members said the limitations of the bond, the projects left behind, speak to the need for new ongoing revenue sources for parks and roads.
Put housing on that list too.
“Help me understand why there is no housing money in here given the crisis we are facing,” Councilwoman At-large Debbie Ortega said, adding that she is “really disappointed” that money for supportive housing for homeless people was cut from an earlier iteration of the project list.
“I’m really disappointed because we really are in a crisis,” she said. “And the ironic part is that we’ve never seen more housing be constructed. It’s just not for the people who are struggling with affordability.”
Even though the city is collecting new money from property taxes and a linkage fee for a dedicated affordable housing fund, tax-credit financing for affordable housing is falling short, and cities are bracing for cuts to Housing and Urban Development grant programs. The affordable housing fund could end up just replacing old money rather than adding to and leveraging that money as was intended. And the cost of construction keeps going up.
Evan Dreyer, Hancock’s deputy chief of staff, said the Mayor’s Office is aware of the need for more money for housing and is looking at other potential revenue streams — just not this particular bond program.
“It’s really important to me that we be crystal clear that we’re making a choice, and it might not be the right choice,” Councilwoman At-large Robin Kniech said of the decision to exclude housing from the bond.
The final project list might still be in flux — but just a little.
Meeting as a committee of the whole, the Denver City Council voted Monday to move forward seven separate project packages for further discussion and votes in August. However, several council members abstained from particular packages in an indication they aren’t happy with the way the money was allocated and may introduce amendments before the package is finalized.
Councilman Chris Herndon said he wants to find $12 million so that the Denver Central Library can build a teen center, along with the new children’s section and safety enhancements that will be covered by the $38 million recommended by the Mayor’s Office. Councilman Rafael Espinoza said he may bring forward as many as four amendments, and in an interview last week, he indicated one of those would restore the $12 million to the library by taking money from the Denver Art Museum.
Councilman Paul Kashmann, who wants to see more money for sidewalks, abstained from votes on the transportation package and the cultural facilities package; Espinoza joined Kashmann on the cultural facilities package and also abstained on the public facilities package. Councilman Kevin Flynn abstained from the public safety package. Flynn lamented the exclusion of a new District 4 police station from the project list, and he’s also concerned about the total size of the bond program.
“I am somewhat disappointed that we maxed out our credit card,” Flynn said.
The bond package will be organized into seven categories.
Each of these will be on the ballot as a separate item.
- Transportation and mobility: $430 million
- Cultural facilities, such as the Denver Art Museum, Denver Botanic Gardens and Denver Zoo: $116.9 million
- Denver Health: $75 million
- Public safety: $77 million
- Library system: $69.3 million
- Parks and rec: $151.6 million
- Public facilities system: $16.5 million
The totals assume a $50 million contingency that is divided among the categories, which is why it’s higher than the numbers that have appeared elsewhere. The city is not asking for an increase in the tax rate, but property owners will be paying more for debt service than in the past because their property generally is worth more.
The city’s financial analysis assumes interest rates between 4.4 percent and 5.8 percent. The city has a AAA bond rating.
Denver City Council holds a first reading and public hearing on the bond package at its Aug. 7 meeting. The meeting starts at 5:30 p.m. This is the public’s last big chance to influence the final project list.
Denver City Council holds a second reading on the bond package Aug. 14. This vote will determine the package that goes to voters in November.
You can read the full project list and get more information here.