biweekly meeting of the Finance and Business Committee of Denver City Council.

Join us for the Finance and Business Committee starting now.

All right. Good morning, everyone. Welcome to the Finance and Business Committee. Today is

Tuesday, February 10th. My name is Serena Gonzalez-Gutierrez. I'm one of your council

members at large and also chair of the committee. We will start with introductions before we get

into what is on today's agenda. Just double checking that we have no one online as of yet,

but we may have some people joining us there, and we'll start with introductions over here on my

left. Thank you, committee chair, Darrell Watson, fine district nine. Good morning, Paul Cashman,

Good morning, Amanda Sandoval, Northwest Denver, District 1.

Good morning, Amanda Sawyer, District 5.

Good morning, Diana Romero-Campbell, Southeast Denver, District 4.

Okay, well, I'll keep an eye out in case anyone does join us online.

We have one action item today being presented to us by the famous Amandas.

I'm just kidding.

Council President and Councilwoman Sawyer will be presenting this action item for us,

and then we do have some items on consent.

I will hand it over to you to take it away.

Thank you all.

So before you, we have what's called the Budget Reporting Ordinance.

So what are we trying to solve for?

This ordinance is about transparency and good governance.

Council, as we all know, is responsible for approving the budget,

and we should have regular standardized insight

into how it's performing throughout the year.

This is not, I just want to set the table.

This isn't about mistrust.

It's about building a shared understanding

of our financial health.

Why is this needed?

Today, council does not receive consistent,

routine budget updates.

We rely on ad hoc information from the administration

rather than standardized comparable data

because we only get information mid-July.

And it's a snapshot in time.

And then we're handed, we go through the budget hearings

and we're handed a proposed budget.

On-call contracts are approved by council,

but we don't often know when they're used

for what purpose and how much is spent.

And the gap limits our ability to do our jobs effectively

and proactively.

The purpose and intent of this is,

what this ordinance does is it codifies

quarterly general fund reporting from the Department of Finance into City Council.

So if you're thinking about, remember when we all read into the announcement section

of our City Council agenda for the bond?

It was just last month.

That's how this would function.

So once a quarter on the City Council agenda under communications, this would be read into

the record.

It requires quarterly reporting from agencies on on-call contracts, use, and spending,

ensures reports are clear, readable, and accessible to both council and the public,

and allows council to track trends over time and reduce surprises,

and creates a structured way for council to flag issues early.

So if you see an issue flagged, you can then contact a committee chair and say,

hey, I want more insight into this.

then we can use our committee structures to actually gain more insights and not after the fact.

One thing, I think it should be all at the top of your inbox.

Councilwoman Sawyer sent it, I believe, on Thursday or Friday.

It's the Power BI tool.

If you go into that Power BI tool and you ask request access,

Lisa Templeton will get it to you right away.

Martinez will get it to you right away.

And that's what we're structuring this on.

So it'd be a little communication, and then we would be able to go knowing that that quarterly Power BI tool had been updated on that quarter.

So it's a two-pronged tool.

It's the Power BI tool after that communication is read.

And so sometimes what I always say is if it's out of sight, it's out of mind.

And so we don't see the budget until July.

this will remind us, oh, I want to go into this specific agency and see how they're spending. And

if you have questions about it, then you can bring it to the council chair and say, hey, can we have

more? And the Department of Finance and that department and say, hey, can we have more clarity

on this? We don't have a clear understanding. Here's our peer research to prove that this is

just a good governance. So many peer cities already provide monthly or quarterly financial

reporting. The ordinance aligns Denver with best practices used in Austin, Kansas City,

Westminster, Dallas, and Washington State. And so this is not something that is like totally radical

and out of like created out of whole cloth. This is really just a good governance tool

that we believe that will give us trending.

We can see a trend over our general fund over time

to understand how we are spending the money

since we're the body that approves it.

And then I'll pass it over to Councilwoman Sawyer.

Great, thank you.

So there's so much financial information out there

that we wanted to make sure that we had a simple

and straightforward and easy way for council members

to get the information that we need and then be able to follow up in committee with specific

questions about specific programs or to ask things at budget, et cetera. So we have, we really think

that the best way to do this is schedule 100, schedule 100 A, and schedule 100 B. These are in

the budget book. You can see them year over year. However, what gets really challenging is that in

order to see the full kind of trend over time, I literally had to do a craft project where I cut

up two different budget books, taped them together so that I could kind of see better because those

budget books are snapshot, right? They're snapshot in September of every year. So being able to see

schedule hundreds gives us a high level overview. Having access to the Power BI tool

allows us to be able to dig in a little deeper if we see something in those broader

reporting mechanisms that sort of flag for us that we need, that we have a question about

something or we need to have something in committee. And I'll give you an example, right?

So if there's a city agency that spends the first six months of the year planning and essentially

spends all of the dollars that they have in their budget in the second six months of the year,

We don't know that, right?

We don't know how agencies are spending their money right now at all.

So being able to see that in a quarterly snapshot is really, really valuable

because we'll be able to see that over time.

If there's an agency and we get reported to in June

and their budget dollars, other than personnel,

match the budget dollars that they were appropriated for the budget year,

we will now be able to see that.

so that we could say, come into committee, let's have a conversation about exactly what is going on here, right?

So that's kind of the goal of what we are looking for here.

Next slide, please.

Also a little bit about on-call contracts.

So as you know, I spent two and a half years voting no on every on-call contract that came through Denver City Council

until this council shot down a set of on-call contracts in support of my concerns about this.

And those contracts came back because it was a statement vote, I think, more than anything else.

And so those contracts then went through.

But since then, we have received quarterly reporting from most city agencies, some forget,

that allows us to see the utilization of those on-call contracts.

And it also flags for us whether it's a maybe-weeby business

or whether there's an SBE goal or any of those different kinds of things,

which is really, really valuable for us as council members

to actually have the oversight that the charter tells us we should have.

While we really appreciate that those agency heads

are requiring their staff to provide us that,

It is not always reliable, and it is not codified anywhere.

So this codifies that specifically.

It also tells us, so we worked with the Department of Finance on this.

They would prefer 60 days.

We would prefer 30 days after the quarter in terms of reporting.

So we settled on 45.

And that gives us the opportunity to see sales tax data as well.

Now, it's not probably going to give us the full picture of sales tax data because we would need another two weeks and get to the 60 days for that.

But because we'll be getting it again the next quarter, we'll have the most updated numbers to be able to really see the trends in sales tax data.

Because right now, we really only see that twice.

We see it after the books close from the previous year and the Department of Finance comes and presents to us in this committee.

and then on September 15th when we received the budget from the mayor.

Other than that, the only way we know if the city's financial position,

remember our general fund is made up of almost 60% sales tax revenue.

So if our sales tax revenue is going down, we hear rumors about it,

but we don't actually ever get to see it and know, right?

And then we're taken by surprise.

So this will, 45 days is not perfect.

I want to make sure to set everyone's expectations.

We will not get perfect data, but we will get more data,

and I think that that's really valuable.

And I also just want to acknowledge the Department of Finance

and being able to share that with us.

So this is the timeline.

And so just to set your expectations,

45 days after the close of the quarter,

these will be the dates that we will get those updated financial statements

that the Power BI dashboard will be updated

so we can go in there and kind of take a look at what's going on.

And I think for Council President Sandoval and I,

what's really important here is the transparency piece to the public.

So having the communication read at council meetings

in the same way that it's read now when we are exercising bonds,

I think will be really valuable as an opportunity for the public

to be able to understand a little bit more about what's going on.

And to be fair, you know, there's a checkbook online that the Department of Finance manages right now.

You can see every slice of pizza that has been, you know, every dime that has been spent on every slice of pizza.

It's not valuable because it's just too much, right?

The Power BI dashboard will be at a cost center level.

And so I think the cost center level will be able to give us a lot of data, but a manageable amount of data as well.

So here's the cadence. Next slide, please. Thank you. And then just to talk through the timeline. So we've been talking about this for a while, put it in place, did a number of stakeholder meetings. Want to just give a huge shout out to the Department of Finance. Thank you for partnering with us on this and getting to a spot where we are all, I think, ready to go with this.

So Council President Sandoval and I just want to acknowledge we did not go to budget and policy and have a discussion with this about you.

I apologize for that.

I will say we want to make sure that this gets in, passed forward and approved and ready for Q2 so that we are getting those numbers on the that we set on the timeline.

And so we we acknowledge we did not go to budget and policy and we apologize for that.

but also the time sensitivity of this sort of made it impossible

because we couldn't get into budget and policy until June.

So this is the ordinance timeline.

Next slide, I think, is just questions.

That's it.

All right.

Thank you so much for that.

Before we go into questions, because this is an action

and that requires public comment, we don't have anybody signed up.

But I do want to ask for those of you in the room,

if anyone would wish to make any public comment on this matter.

Okay, seeing none.

Oh, wait, wait, we have one. Okay.

We're here.

Laura Swartz, Department of Finance, Director of Communications.

Just want to say thank you to the council sponsors for your leadership

and putting this together and also for collaborating very closely with us

on the drafting of the ordinance.

We have a full bench for any questions we might have.

Thank you. Thank you.

Thank you.

Thank you. Okay. Well, there is no public, no other public comment. So we will move on to questions from council members and councilman Watson, you are first in the queue. But before we do that, I do want to recognize councilwoman Lewis, who has joined us via zoom. Would you like to say hello, councilwoman?

Good morning.

All right. We will go into questions starting with Councilman Watson followed by Council Pro Temer-Mario Campbell.

First of all, just want to say thank you. Thank you, committee chair. Thank you to both of you.

I just think this is so needed and it is a application, a change within ordinance that's not exploding an entire process, but it's targeting where we see the gaps.

And I can tell you from my former life coming into the budgeting process, it is not easy.

So I really appreciate the thoughtfulness that you all have put into this and just really what you're targeting is the information communication that we need as city council members to do our job.

I have one questioning on the timing.

I love the fact that you all came from 30 to 60 days, between 30 days and 60 days down to 45.

I'm very curious on Q4 and I see the asterisks yeah so you do there's gonna

be a question there and I'm curious and if you all are also able if we can also

have DOF share I'm curious how do we how do we when we're looking at Q4 numbers

and those are very important numbers how we end a year but they're still squishy

in February very what's the thought process on any level of agility or

flexibility just with the fourth quarter would love to hear your thoughts I don't

want to and if you all are comfortable and chairs comfortable maybe from DOF

work this why is it so squishy I would love to hear from them but we'd love to

hear from either one of you on that squishyness for the fourth quarter

close. I'll start and then I'll pass it. So yes, it closes in March, right? And that's why there's

an asterisk and it says provided Q4 data subject to change. What we wanted to do is, yes, Q4 is the

anomaly. It's the outlier. So I don't want to create a whole entire ordinance on one quarter

outlier. So if it needs to come in, they'll, they can still read it into the record, knowing that

the full, the following quarter, it would be scrubbed. That information will be scrubbed more,

but it still gives us somewhat of a projection on how we ended the following year. Um, and then

we'll be able to the following quarter. So like May 15th, you'd be able to come back in and say,

okay, it would be all shored up. But I didn't want 60 days. 60 days felt really late for me,

being able to do that. That's already, if you look at the date, that would already be late

September. That's when we start our budget hearings. So if you look at this, this actually

follows through with what we're doing. So we're going to our big, like setting our goals, right?

our goal retreat for city council in March. Last year, we didn't have any information.

We go into our big budget in May. So we'll have two opportunities. But city council continues

that cadence of when, how they meet and how we do our budget work. And the city council president,

I've been the one who's been facilitating those dates. This falls in line so we don't go in blind.

I felt last year we went in a little bit blind and I wanted to fix that for us and be able to have us have some idea of what was happening, knowing full well that by May, when we go into our big budget retreat, like our full day workshop, we'll have better information.

Yeah. And I will just add the reason why Q4 is squishy is because the city works on an accrual basis, right?

Which means that there are still outstanding invoices from the prior year from we'll just use this year.

So if you had someone do work for you in 2025, they might not invoice you until December of 2025.

They might not invoice you until February of 2026.

But those dollars, because the work was done in 2025, go into the 2025 budget, right?

So that February 14th deadline for reporting for the fourth quarter is going to be squishy

because there are absolutely 100% going to be outstanding invoices

and things that still need to be paid in the 2025 budget books.

that are outstanding by February 14th of 2026.

So it's just because we work on an accrual basis,

it is a standard accounting thing.

No one is hiding anything.

It's just the way the books work.

And we pay on a net 30.

So after that, if we get an invoice on February 28th,

it might not be paid until March 28th, right?

And so there's just, it just, it's messy in the fourth quarter.

But we did want to make sure that we at least got something

just to keep the cadence going.

I would love to hear from DOF as well.

Council President.

Okay, introduce yourself.

Sorry.

Excuse me.

Justin Sykes, Budget and Management Office Director for the city.

First and foremost, what Council President Sandoval, what Council Member Sawyer just described is exactly accurate,

where we don't know a full picture for the prior year by, I think, what would be February 14th, following the end of the prior year.

And I think there's trade-off there where we are able to provide that information.

I think just really want to emphasize the caveat that it is not full.

It is not complete.

And I think would want to advise everyone seeing those numbers that it may be overly rosy or overly pessimistic.

And so I think if the dates were to stay as is, because even 60 days, there are still going to be accruals coming in,

that there's awareness of the fact that those numbers are incomplete and that there aren't

and shouldn't be big decisions made until we've got the full data. So I think we are able to

provide that. We appreciate the very robust conversation looking at benefits of waiting

versus benefits of getting the information sooner. I think we will certainly clarify

likely in April like we typically do what the full year picture looks like.

But appreciate the question about it and just really want to emphasize that awareness that

the numbers will still be moving at that point on February 14th and subject to change.

Justin, can you just talk a little bit about our conversation about what that's going to look like

on your end, just in terms of asterisks or notes or whatever?

How is the Department of Finance going to operationally clarify for the public that reality that you just described?

Great question.

And so I think we've started, even though this hasn't passed, I had a conversation this morning with the revenue specialist in the budget management office.

I think what we're envisioning is a template.

So you all would be seeing something that looks the same 45 days after the end of each quarter.

and we would have explanatory detail along with just the numbers.

And so we wouldn't just give you the numbers cold.

We would try to provide some background probably for that Q4 report.

We would maybe increase the font size.

I really emphasize the fact that those numbers are preliminary,

that you shouldn't be making big decisions.

I was delving into the financial system last night,

kind of thinking about, I think, what would be a February 14th deadline.

And I can say pretty assuredly that what we're seeing in the financial system right now will continue to change for at least the next month or so, if not a little bit longer.

But we will try to detail that as clearly as possible in the reporting.

And, of course, would welcome your feedback, would welcome future conversations with you all.

If you were to have questions, I think the big concern is just making sure that you don't and that the public doesn't get any wrong impressions on the data that is not full and complete.

That's great.

And I will say we are not going to have this challenge this year after implementation of the ordinance

because it won't start that will start after the books have already closed.

The reporting will start after May.

Until 27.

Exactly.

It will be a problem starting in 27.

But that gives us a lot of time to figure it out.

And I will also just say, as we figure this out, there may be operational changes in terms of comments or information or whatever.

Like, these guys are figuring it out right along with us, and so we just really appreciate that they're doing that.

And for you all, if there are things in their reporting as this gets started that you don't get or that aren't clear or that you need to, you want something different, like DOF has been totally open to that because we're all figuring this out together.

And the point is to be transparent with this information and to provide us with this information on a more regular cadence.

And so we're all headed towards the same goals.

So more conversation and information is better than less.

I would say to the sponsors, the white paper or prospectus type,

I mean, information that provides a narrative of what the actual data is providing is essential.

I'm so glad you all have discussed it.

And I think being very clear, Justin and DOF, on kind of, because not only the fourth quarter,

I mean, the second quarter will have the same kind of stickiness, but not as impactful because we are making decisions on the second quarter.

So I appreciate it.

I appreciate it.

Sponsors, I appreciate it, committee chair.

Great work.

All right.

Great.

Next up is Council Pro Tem Romero-Kimball.

Thank you, Madam Chair.

Thank you both for bringing this forward.

I remember the art project and the tape.

So this is, I think, a good solution to be able to get that information needed.

In this last conversation, my question was actually answered.

More of the texture that comes behind just the numbers,

and I think it would be addressed with the template that you're providing with more.

You called it a perspective, so I'm thinking more like a narrative.

That's not a term they're going to use.

Yeah, but being able to have more texture behind what those numbers are that we're seeing.

Is that part of what you anticipate within, just to clarify, to make sure that it's being?

Justin Sykes, Budget Management Office Director.

Yes, Council Member, Council President Pro Tem.

That is exactly what we're envisioning.

I think we would articulate what the period of sales and use tax revenues, as Council Member Sawyer mentioned, that is the single most significant source of revenue.

And so I think that's a really big barometer.

I think something that you are likely to see in the data are that the revenues and expenditures for the city are not broken out 1-12th coming in or going out each month.

And so when you see that actual data on the revenues received or the expenditures that have been incurred as of the end of Q1 or Q2, I think just know, and we'll try to provide some historical context around as of the end of Q1 for certain large revenue streams, for example, we will only have gotten maybe not one quarter of the amount for the year.

And so that's the type of texture that we're going to really aim to provide so that when you see the numbers, you also have a sense of what they represent and don't freak out or kind of have a panic attack about the numbers maybe not being one quarter of the year's worth at the end of the first quarter, for example.

Got it. Thank you.

Can I just add to that?

And I will just say, like, having worked in sales for many, many, many years, right, there is a sales cycle.

Q1 dollars are going to be very, very soft, right? People just don't shop in January and February.

Like we all know this to be true. The, you know, fourth quarter is a significant portion

and it's not averaged out over time, but that's when everybody's doing their holiday shopping in

there, you know, whatever. So that's when the majority of sales tax revenue comes in. So you're

going to, you're going to see that trend over time. And I think the value for us is in that we will

be able to see those trends. And also like this year, the Broncos went to playoff games. Yes. So

you're going to see a different thing than you would have had last year, right? Because when

our sports teams do go to playoff, you do see a bump in sales and economy. You just do. And this

year we had a record attendance at the National Westerns talk show, which is a huge thing. So

when normally like at La Casita, my family's restaurant, we know January's, we call it dry

January, right? Nobody's spending money. Nobody comes in. Everyone's like paying off all their

bills. But we have for us, thank goodness, we have the National Western Stock Show. And so we're

going to be hopefully be able to see those trend lines as we get this information and you'd be

able to go back in the Power BI and say, what happened last year? What happened this? And then

you can kind of correlate events to what brings in sales tax revenue to the city and county of

Denver. That's great. My only other comment is thank you. Now in ordinance as we go into those

meetings for council whether it be for our goals in a budget season we have those numbers and are

prepared so I think that's a great way to be able to codify that. Thank you. Thank you Madam President.

Next up is Councilman Keshe. Thank you Madam Chair. I'll start by thanking Councilwoman

sawyer for your uh work on the on-call contracts i am stubborn in retrospect in retrospect it amazes

me that we went so long just kind of like yeah it'll be good yeah it'll be good i think it's

an important um just increases our ability to be the shepherds that we're supposed to be of public

dollars and thank you to you both for this um i had for quite some time thought it would be great

if city council had a member of the department of finance assigned to council the way we have

members of the city attorney's office this is not that but it's a long way in that direction

It just ensures we're going to get more information that we need.

And I will say, I'll blow a little smoke here, with this particular Department of Finance team, I'm not as worried because my experience is, you all have very seriously been very responsive whenever I've needed information.

But as, you know, who knows down the road with another team that doesn't respond in that way, this type of strengthening of our ability to do our job is so critical.

And I think it's just another step.

You know, this council is legislating, which we are supposed to be doing, much more than previous councils have.

And this is just another tool so that we can do that effectively.

So, again, great work for both of you.

So last year, thank you, Council Member Cashman.

Last year, we had teed up through the budget working group,

budget expansion request, exactly what you're talking about,

to have someone in Central be able to look over

the Big B budget and help us with tracking

what were our priorities, how did they get implemented,

where in the budget are they, are we seeing progress

on some of the things, initiatives that we wanna see.

We ultimately brought that down when we saw that there was going to be a $200 million budget shortfall, 100 last year, 100 this year.

But that's still something that I'm very interested in bringing back around when we get the, when we see the numbers.

Can we do a budget expansion request for Central so that this gives them a tool?

We're like implementing tools along the way so that if we do get that budget analysis person in Central, we have this tool for them to look at.

We have all of our priorities that we have them looking at, to look at.

We have our amendments that they can watch to see how is city council actually making an impact on the budget.

So that is something that's still in my back pocket.

We had that all written up.

Benita had it submitted.

And then ultimately we did pull that down.

So once we get information that we can go for a budget expansion request, I truly believe

city council should have that analyst there.

Not Kathleen, who helps us with our P cards and our budgets and our personnel, right?

Not that.

I'm not talking about that.

I'm literally talking about the big B budget to help us look at how are we as the legislative

side who approve the budget because in charter it literally says one of our biggest positions that

we have authority is we approve the budget and so I always tell like all my constituents are like

what are you doing for road safety I'm like I'm past the budget for Dottie to implement the road

safety I passed the budget so that we could have the bike lanes and they we I don't oversee that

that's not operational I'm not that in that position so what tools can we add to the toolbox

for us to be able to track that a little bit better.

And I think that's an important conversation

that we all still have.

Thank you. That's all, madam.

All right. Thank you.

Thank you both for bringing this.

I feel like you listened to all of our angst

over the last couple of years.

And I think those of us that are new here,

I don't necessarily have any, well, maybe one question.

But those of us that came in newer,

is a big monster that we had to take on right when we came in.

So I know that there's a couple things maybe moving around

that hopefully will be helpful going forward,

but I see this as very, very beneficial in getting those regular updates.

And as chair of this committee, I know I've kind of taken that on,

and I know when Councilwoman Sawyer was chair of whatever,

I can't remember the name of the committee before,

but a similar type of committee where we make requests

and ask like Lisa Marie, uh, Martinez Templeton to come in, ask DOF to come in and provide us

those updates. And now this will make it codified so that we know we will be getting those updates.

And I guess with that said, and I'm looking at Melissa over here, one of our policy analysts

and who staffs this committee to, for us to like, think about how we want to get those scheduled

out in advance for the year so that we're not scrambling at the last minute since this committee

is only meeting twice a month, technically twice a month. And so making sure that we get those

and work with the Department of Finance, work with Catalina so that we can make sure we're

scheduled out for the year. We know when those reports are going to be happening.

And I'm just, I'm excited for that. So this is going to be, I think, extremely helpful going

forward as we go through the budget process. I just want to thank everyone who took the time

to engage and be part of this work and thank you to the Amanda's Council

President and Councilwoman Sawyer for your work on this. With that said, this

will, I will need a motion for this action item and moved by Councilman

Watson, seconded by Council Pro Tem Romero Campbell. Is there any need for a

roll call vote? Cashman, I saw you being worried about, I'm just kidding. So this

will move forward to the full body and we only have four items on consent that

those items will also move forward to the full body and with that we are adjourned.

Thank you.