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.

All right, good morning, everyone.

Welcome to Finance and Business Committee.

Today is Tuesday, April 28th.

My name is Serena Gonzalez Cutietes, and I'm one of your council members at large.

We will start with introductions from council members, and it looks like I don't have anybody participating virtually today.

So we'll go ahead and start with the council members that are here in the room.

And we will start to my right.

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

Good morning, Darren Watson, flying district nine.

Chantelist, District 8.

Great.

Well, we have a few items on our agenda today.

We'll be starting with some action items being presented by General Services, followed by a briefing from the Department of Finance.

It's our 2027 budget kickoff.

So to get us started, we'll go ahead and start with the action items that are before us from General Services.

They're presenting on three contracts for the janitorial services.

I will turn it over to the general services team.

If you could please introduce yourselves, proceed with your presentations.

So with that said, we will go ahead and kick it over to you all.

Thank you.

Good morning, Kmaj Oli, I'm the director of administration with General Services.

Good morning all.

Adrena Gibson, Executive Director of General Services.

Morning, Roberto Abila, General Services Contract Administrator.

And before we get started, I want to make sure we um welcome Councilwoman Gilmore.

Thank you for joining us.

We're just about to get started.

All right.

Thanks again and good morning.

So we're going to be presenting on the citywide janitorial agreements here.

There are three agreements that we'll be reviewing as you can see on your screen.

Normally, I would just uh mention that you would normally get this from Nicole Sudreth, our uh contracts manager.

She's not available.

Uh but thank you very much for taking briefings with her uh previously.

So there was a memo that was distributed uh to you all yesterday with some uh a QA on questions that we had received uh from you all during those briefings.

Uh so uh happy to take any of those uh questions uh whenever we get to the question portion today.

Uh so just a very quick overview of uh what is represented within these agreements.

Uh there are 88 different buildings uh and those are put into seven different portfolios, and the staff hours that you see here under the participating agencies represents uh what we are anticipating uh under these current agreements.

Uh those are estimated hours, though.

I will call your attention to the bottom of the screen where we do talk about uh adjustments based on resources, budget, uh uh operational needs, etc.

Uh but general services, there are 28 buildings, 45 for Denver Parson Breck, uh, human services, there are five buildings, three buildings with Department of Transportation Infrastructure, two with Department of Motor Vehicles, uh, four with a Department of Safety, and one new building with the uh public library that we did not previously have.

Uh so again, those are the uh the hours and uh call your attention to the appendix uh in the presentation uh that has the actual buildings uh listed there that you can you can take a look at.

Services covered by these contracts, these agreements are uh what we have seen previously.

Uh this did not really uh change from the the previous agreements to now.

Uh I won't uh read these through.

Uh I think the the one adjustment that we did make was instead of uh identifying uh specific COVID cleaning measures.

We talk about high touch areas uh that may require some additional um additional cleaning uh functions, but uh essentially this is the normal type of a cleaning that you would see in um custodial agreements.

I'm not sure why that's going backwards, but here we go, let's go forwards.

So requirements of during the RFP, prevailing wage and compliance with wage laws.

We definitely call that out specifically within the RFP process and the current agreements.

So new contractors, these agreements they'll comply with prevailing wage ordinance, listing the sections there as well as the minimum wage and wage theft ordinances.

And as well on the right hand side of the screen there, it does talk about fringe benefits covered by prevailing wage.

And then towards the bottom there, the prevailing wage division within the Denver Auditor's Office must approve those Fringe benefit packages listing those items there.

And so contractors will comply or shall comply with the city's worker retention ordinance.

There again are the sections for reference.

Essentially, that means that contractors are required to retain those qualified individuals, employees from the previous contractor, and there's a transition period of 90 days.

At the end of that 90 days, the contractor then must perform a written performance review or evaluation with each of those workers, and if they uh their performance is satisfactory, then the contractor must offer the employee continued employment under that agreement.

Procurement overview.

So we did receive the city.

This was a very competitive process.

So the evaluation criteria, we base that on background capacity, their ability to deliver the services that the city requires, staff training plans, pricing was also a consideration, as well as there were some administrative document requirements, and we did do in-person interviews as well during this procurement process.

The evaluation committee was comprised of our stakeholder agencies, which a large one for us is general services.

We do have individuals in the room today with facilities management to answer questions.

We also had representative from parks and recreation, as well as Denver Human Services.

So the contractor selections were as follows: American Facility Services Group, which is AFSG, then CCS Facility Services or CCS, and then Roth property maintenance, which is RPM.

Each of those were evaluated and ranked as the top three contractors.

And that was based on experience, the staffing plan, again, the ability to meet the requirements of the city's worker retention ordinance was included as part of that, the management plan, management philosophy, quality control, any of the minority women business enterprise requirements from Disbo or the Vision of Small Business Opportunity, and then also training and employee screening.

And the final one is recording measures that we should have just put timekeeping with the ability to make sure that timekeeping was accurate.

During the additional, so that was the written proposal process.

Then during the additional interview that we did on top of that, again, we dove a bit more into experience of the three top performers here during the proposal process.

We talked about litigation, anything with departmental labor or OSHA, any sort of investigation questions as follow-up, the logistical strategy for coming on board, transitioning into the city, transition implement to implementation schedule, and then we dove deep into the equipment and preventative maintenance program.

All very important things that we wanted to learn some additional information about.

And then, of course, pricing was excuse me, a big consideration or a consideration as part of this process.

So this validated the competitive competitiveness and the lowest uh evaluated pricing during the process.

So we could get a bit more about the evaluation and award allocation for complete transparency.

The solicitation was open to proposers to bid on any or all of the portfolios.

Again, there were seven portfolios.

Those are outlined in the appendix.

So they could potentially bid on one group, two groups, three groups, or all seven groups.

That was completely at their discretion.

So we wanted to really give proposers maximum flexibility, especially if we are trying to continue to unbundle this rather large uh agreement that we have in the city.

So the awards were allocated by portfolio based on those combined evaluation scoring of the written proposals and the interview performance.

Um we should have included pricing.

Um that should have been the the three uh the three items there on that second bullet point.

So the new contracts uh just to go into a little more detail about each of those American Facilities Services Group, they were uh they're a local form, they do her uh hold um MWBE and SBE certifications, they were awarded group five uh for the term of three years plus two additional one-year renewals.

Uh that contract maximum for the three years is 3.75 million, and they are 100% self uh performing under the uh W excuse me MWBE commitment.

CCS facility services are a local form, uh excuse me, firm.

They were awarded groups one, two, three, four, and six.

Uh again, uh three-year term with uh two one-year renewals.

That contract max for the three years is 21 point uh 75 million, and uh they are utilizing Alpha Green Cleaning LLC to reach the 25% subcontractor uh or uh WBE requirement, the goal on the contract.

And then finally we have Roth property maintenance.

They are a local firm and they but hold both WBE and SB certifications.

They were awarded group seven uh three-year term to one year renewals, and the contract max on that is 500,000, and they are 100% self-performing.

Uh so we wanted to outline uh the transition strategy.

Uh we've done quite a bit, I think, over the last few months to support the transition.

We understand that we are going from uh two contracts uh here with the city that's uh RPM as well as KG Clean who are not being awarded uh uh any of the um uh uh agreements during during this transition.

And so what we wanted to do was ensure that there was uh smooth transition for workers and to ensure that services are being provided uh without disruption.

And so uh we did hold the contracts group uh here in general services held a meeting on March 25th uh this year to contact uh to kick off what this transition would look like and how it would work and how we would be communicating.

That included our city staff as well as stakeholders, the SEIU Local 105, RPM, CCS, AFSG, and Alpha Green.

So we made sure that the subcontractor was also part of that meeting.

So we can make sure we have some continuity there.

Going back up to the second bullet point, we're also really starting to build up a relationship with the SEIU Local 105.

And so we did have an individual meeting with them and our executive leadership on April 15th to talk about how we can work better, how we can communicate better, and how we can support each other in our goals as well as their their goals with workers.

We were hearing, I would say, in the April time frame that workers were maybe not getting the information that they needed, or maybe they were getting some misinformation.

And so what we wanted to do was really to ensure that people were hearing from us in the city of what this transition would look like.

And so we had a couple different things that that happened.

And really to talk about worker protection process and next steps.

Then what occurred is that we held, and that also in that notice, we said we're having two town halls.

The first town hall was on the 21st, so I'll go up to bullet three there.

And so we hosted a town hall where we asked folks, you know, here's here's some information and tell us what questions you have, and that was good because that informed us of either miscommunication or or what folks needed some assistance in uh in questions, getting questions answered.

We did have that uh translated in Spanish and Korean, and I think that that was um helpful for uh some of the attendees that were there.

And then we had so that one was in the late afternoon, then we had another one the next morning, uh, so kind of split that up between times during the day so hopefully we could reach as many people as possible.

So that happened uh the following day on the 22nd, again uh interpreted into Spanish and Korean.

And then on the 24th, with the questions that we weren't able to answer during those town halls, we issued an updated uh notice again, both in uh Spanish and English, uh answering those questions and hopefully uh getting people getting workers the information that that they uh needed.

Uh and so uh finally I'll just mention on this slide that uh the contractors who again are represented uh in the audience today, they are continuing to conduct onboarding events uh and application events because workers will need to uh apply uh with those individuals, and so um they're continuing to do that as well as facility uh walkthroughs.

So uh key milestones and critical dates.

Um we had uh scheduled time with you all uh in the finance and business uh committee.

Uh unfortunately that was an incredibly busy uh busy meeting, and so uh we uh could not present to this body, so uh that was rescheduled, and that's why we are here today.

Thank you very much for putting us first on the agenda.

We greatly appreciate that.

Uh and so uh what we are looking to do is to get into city council fairly quickly if we are able to just because we we are extremely crunched for time in getting uh these agreements through the process, but we are very uh interested to hear your comments and questions and make sure that we have addressed um all of that with you.

So the current contracts are set to expire on April 30th, uh which is right around the corner uh this week.

Uh and so with council approval uh again, hopefully on May 4th, uh we are hoping to have those fully executed agreements uh within uh two to three weeks of that.

Uh and we're taking some interim steps in in the meantime to ensure that we are still getting the services that you all need citywide.

So the appendix uh uh as I mentioned, I won't go through these slide by slide.

You can certainly review them yourselves.

Uh the this has not changed since the briefings.

Uh we have each of the groups uh outlined uh here and uh those uh agreements that were awarded.

So thank you.

I just want to call out one item too with regards to the notice that we updated um from the town hall.

We have copies of those for you all if you'd like to see them, and then we also have copies for all of those in the audience if that information was not distributed to you.

Thank you so much.

All right.

Is that that's the end of the presentation?

All right, great.

Um, I want to uh welcome Councilwoman Sawyer to the meeting.

Thank you for joining us.

I also want to welcome uh former Mayor Wellington Webb.

Just want to make sure we recognize you.

Thank you for being here today.

All right.

Um with that said, we are open for questions at this point, and I have Council Pro Tem Romero Campbell to start us off.

Oh, I'm first.

Well, thank you.

First, you go.

Um I I guess this is just a general question, and I don't remember.

I was looking through my notes and I don't remember seeing this in um for the briefing, but what was the major reason for changing contractors?

So uh the current contracts only go five years, so we had exhausted the uh three year plus the two uh extensions, and so we had to competitively bid uh again and with the competitive bid that opens it up to all businesses in that marketplace to compete for that work.

From there, we have the evaluation criteria outlined, and so to give an equitable and um fair opportunity to all of those, they all would submit proposals and then based off of that scoring, and then it would be awarded thereafter based off of the best value.

Thank you.

So it wasn't necessarily like a choice, but rather the process.

Okay.

Um does a in the process, does a current um contract do they just go kind of go out equal with everybody else, or is there preference given to RE being within the system?

No, it it is competitive bid, yes.

Okay, and just to add on to that, so we aren't lawfully allowed to provide preference, however, within the um evaluation criteria I believe, we do look at past performance experience, etc.

And so that does lend itself to being able to really tout what you've done working with the city or other municipalities in that space, and that is only a piece or a portion of it.

And I just wanted to mention um, thank you for that.

The uh experience and past performance was taken into account both in the written proposal uh section, but then also in the uh interview section as well.

Um thank you.

Um and then I was also just wondering, so if you know this new contract moves forward, um, I think it was on slide five, um, the retention of workers.

How thank you for going through that process.

I think that's helpful.

Um, but how exactly um just trying to think of like if you have somebody will will all of the current workers be hired in the new company, and is it just changing the company that's providing that is that's doing the oversight, so it would be all of the same workers.

Correct.

And then through 90 days, there's the review process.

Do you oversee the review process or is who's doing the review?

So go ahead.

Uh so it would be the the contractor that's doing uh per the ordinance, the contractor does the um provides the written evaluation process with the worker.

Okay, and then do you just do you review that to make sure that that process is fair and valid and I would have to probably get back to you on that on that answer.

I don't know that we've been involved in that, and I'm trying to remember when the um ordinance has been in effect because previously it was an executive order, so now that it's in ordinance.

So now that it's an ordinance, I don't know that General Services has been through that process before.

So that would be a good question for us to follow up with you all on.

And so long as it allows the bandwidth, it's something that we would absolutely do.

Okay.

Um and then I think I don't remember what slide it was on.

It looked like the CCS facility had a 25% subcontractor.

Are they also going to go through the review process and comply with the Denver worker retention?

Who reviews that reviews like who who does that review?

Is it the subcontractor?

Yes.

Or is it CCS?

So CCS and their subs both have been a part of the onboarding process in reaching out to the employees.

They've been a part of our town hall, well, not our town halls, but in part of our transition meetings, our weekly onboarding meetings, etc.

So they would be leading that on their end.

Great.

Thank you.

Um thank you, Madam Chair.

I don't have any other questions right now.

Thank you so much.

Councilwoman Lewis.

Oh, well, that's great.

Thank you.

Um, two questions.

One, I'll actually start with uh with um what um councilwoman before me uh uh shared with what the uh CCS to 21 million um and the 25 percent how do they make that happen in terms of like meeting that goal, the 25 percent um as subcontractors, like how do they select the subcontractors?

Do they have a process that you all oversee?

Um can you talk about that a bit?

Yeah, so I can talk about that a bit.

So um high level 25% was established on the contract as a whole.

So you either had to bring in um you either yourself have to be certified as an MWB with the city and county of Denver, or you have to meet that requirement with a subcontractor.

In this space um, with that 25% that totals about to $5.5 million dollars, which is quite meaningful to a small business working on this project to be able to bolster themselves and to grow into potentially as they're doing a mentor protege program, grow into even priming this in the future.

Um, in terms of how they select their MWBEs, the city and county of Denver or the division of small business opportunity cannot dictate to the prime who they utilize, but only ensure that they are a commercially useful function providing those services and certified with the city.

So they do have to be certified with the city.

They do have to be certified with the city.

And then how do you what's the um mechanism or the process for you all to know when they meet that 25% threshold?

Yeah, that's a great question.

Thank you.

Um so the division of small business opportunity has compliance project managers, and they actually um beginning of this year, that entire team was transitioned into general services.

Um so we have CPMs, that's what we call them CPMs that will oversee that contract from start to end.

Um, with the transition that occurred with them moving into general services, we are now tightening up a lot of our compliance mechanisms, um, and so we will have one person dedicated to overseeing that.

The way that they oversee that is through checks and balances.

So the prime CCS will be responding into our B2G system all of the payments and work that has happened on a monthly basis, and then Alpha Green, the MWB subcontractor, then has to go in and confirm those payments to ensure that they're being paid.

In the event that there is an issue, um, we look to the MWBs to bring that forward to us to let us know.

Um, but the validation occurs through checks and balances through payment, and then also through ensuring that their subcontract agreements conditions are met, and so that all takes place with our CPM.

Is there is there an expectation from the city that they meet that 25% threshold by a certain time like a certain date throughout of the contract, or is it just before the contract concludes, as long as you've hit that 25% threshold, then you're good.

It's for the life of the contract, and so that's really to ensure that we catch any additional amendments or increase to the contract amount.

So throughout the life of the contract through contract close, that 25% is being tracked, and then at the conclusion of the contract, we look to see that they met that 25% or provide a good faith effort as to why they couldn't.

So you you're the expectation of the city is that they begin once the contract begins that they are starting to meet or to move towards obtaining that 25%.

Okay, one more question for you.

Um the reduction in hours uh because it's my understanding that you all are not looking at the number of employees, you're looking at the number of hours, and I'm just curious um if the hours that you all modeled these contracts from are before the reduction of hours when we had to make cuts, our budget cuts, or if it's modeled uh after those budget cuts.

Does that make sense?

It does.

You're asking if the hours that we provided in this document or in the PowerPoint were prior to the budget process and or after thereafter, and that's a good question.

I don't know the answer to that in a calculate.

Like, did you all yeah?

It's difficult to answer that question because I think there are continued conversations about service levels and ability to meet budget reduction targets.

So I I think you know, what we can do for those areas that um are more of the reduction areas that we've seen, for instance in general services or um or uh Denver Parks and Rec, we can get more specifics about what those hours entail and when those hours were um were actually negotiated.

I think kind of that's the uh point in time.

What do these hours represent?

Is that previous to reduction or post-reduction?

And I believe it's post-production, but I don't want to speak on behalf of those individuals.

So yeah, and to add to that, what we can do is so because you're asking like a two-part question, that's why it's hard for us to answer because there was the reduction in hours that we provided as general services throughout the council process, but thereafter, there were also minor reductions from our city agency partners that participate in this contract, yeah, where we don't have purview to when and why they're providing those reductions.

So I would I almost have to say both, but I want to be specific in that response, and so we'll provide that to you.

Okay, and because adjustments will continue to occur even as this contract is being onboarded.

And so, what our commitment is is highly encouraging our new service providers to be uh to be good stewards and um on per on good principle, make sure that they're doing what they can to assist in the communication of flexing staff in different spaces.

Okay, and and just one follow-up.

You all sent the council questions and responses, and you provided the chart with the 2021 monthly hours to the 2026 monthly hours, and 2021 was 19,000 about 20,000, and then 2026 is 16,000.

And so I'm just curious as to uh like what's what's the difference here.

I I'm I make an assumption, maybe it's a false assumption that we probably have more stuff to clean in 2021 than we had in 2026 because we have the all-in-mail high sites, and so I was just kind of curious if of what that story is telling us.

And you can follow up as well.

Yeah, we we will definitely follow up with you.

I don't want to give you any inaccurate information on that.

Um I would say, you know, probably going into the 21 uh 21 contract.

We were looking at probably some different uh cleaning protocols coming out of of COVID.

Uh, and so uh we would need to get back with some more specific information on that.

Lovely, thank you.

Thank you, madam chair.

Thank you.

That's a my plan.

Thank you.

Uh that's a part.

I really appreciate the memo yesterday.

Uh thank you that it addressed uh I think all the questions that all the members had from our briefings.

Um I appreciated seeing the questions that other members have asked as well and the answers you're given.

Uh I'm gonna get some a little more clarity on the worker retention and how that filters down.

So on the CCS contract, their uh MBE sub is Alpha Green cleaning.

Has Alpha Green cleaning ever worked as a sub or as a prime uh for the city on any contracts that we know of uh I can only speak to the general services uh contracts, and no, they have not on the January janitorial.

They're new to the city to city work.

I believe so.

I would want to confirm whether or not they've worked at the airport, um, but that's something that we can follow up with.

Okay, so what I'm curious is the portfolios that they have, which I think are five uh four of them, five of them, four of them.

Um how does worker retention work uh because there are two new providers which workers are come to which new contractors and which portfolios could workers who are working in a city and county building uh end up working with a uh one of the three uh say the one that's doing rec centers, or they'd be relocating so how do they filter out and when CCS retains workers, how many of them are assigned to Alpha Green?

And when CCS retains workers, how many of them are assigned to Alpha Green?

I'm just trying to get a clearer picture how that works.

Yeah.

I'll just start it off and then you can correct me.

So we have this memo here which will outline each of the groups.

So it's more so group based off of groups, which is their portfolio.

And then from those portfolios, it's more or less those staff staying at that same portfolio.

And so we have outlined here Alpha Green versus CCS on how those locations point out.

But from my understanding, the same staff will be at the same locations.

I mean, I'm I'm in this building frequently, and I really appreciate the work that the janitorial workers have done in this building.

I very much appreciate that.

So if they are working in this building for the provider who's doing it now, they would be offered, they would be retained by either Alpha Green or CCS to work here in the same building.

Correct.

And I will say that one one of the one of the highlights of this transition has been seeing the folks, us as like city employees that have such a commitment to a lot of the staff that have been in these buildings for so long.

Um we've we've been working with safety as well, and the same type of sentiment has come on.

We want to make sure that we see the same staff in the same buildings and that they're okay.

So that's why it's been important for us to continue to press this information forward with this transitioning happening.

I'm grateful for your answer.

Did you just think about that?

You wanted to add to that.

Yeah, I'll just add it.

Sorry, slash clarify.

So CCS identified all the facilities within the five groups that they were awarded, which ones they would be performing the services at, and they also identified the ones that Alpha Green would be providing the services for.

And during our town hall, um, we gathered a spreadsheet to identify um which facility was awarded.

I'm sorry, which facility pertained to which group and which contractor was awarded that group.

And if there was a sub that would be in charge of services at that facility.

Um so in theory, yes, he will be seeing the same staff at the same facility during this transition, uh, despite if it remains the um incumbent contractor and the new contractor.

Thank you.

I really appreciate the clarity.

Thank you, Madam Chair.

Thank you, Councilman Flynn, Councilman Watson.

Uh thank you, uh committee chair, and first um to the uh um the janitorial staff uh members um in the audience.

Really, I can see some of the faces as well that I see every day.

Ms.

Billing, thank you so much for all that you do.

Um it is important um for us and for our community as we walk through these buildings.

Um is not clearly appreciated because you do it so well.

It makes it a constant frost, and folks who come here to expect the level of service you provide.

So thank you all, and for all of the other buildings that you're in.

Um your work is appreciated.

Um quick question on general services.

Uh you discussed and I and appreciate your um meetings with SEIU.

And I'm curious from those discussions, what were things that were elevated in those discussions and what were things implemented within the contracts that you would like to highlight um uh for us today.

Money, money, money.

Hit me with a top five.

Yeah.

Yeah, I think that there was some alignment that needed to be had and understanding on both sides in terms of how we outline our rates versus what's outlined in the CBI and in the CBA.

I'm sorry, I'm speaking in acronyms and the collective bargaining um index as well as in the consumer index, I'm sorry, and the collective bargaining agreement.

Um that was one of the major areas, and then also with regards to um benefits and insurance, why that's critical, what what how we need to be working with SCIU on that, um, and then last but not least, um just around bringing matters forward in terms of what issues they're hearing, what challenges they're observing, um, and how we can get in front of that instead of being separate.

Did I miss anything?

Yeah, I would I would really echo uh what Adrina just shared is you know, if there are issues that the union can support in uh in helping us to solve whenever it comes to these agreements and and with workers, they really want to be part of that discussion and part of the solution.

What I heard a lot of was you know being partners in that collaboration.

So it's a little bit of a different approach uh than we've taken in the past, and I'm hoping that it's going to result in a really good relationship for us to build not only a janitorial space but also in security.

So you all will be seeing security at some point here in the future, and so I think there's a lot of opportunity there to make sure that you know we're communicating and that issues are being resolved before they turn into larger things, and so I really heard a commitment in that space on both sides.

Yeah, I think walking out of that meeting, it was clear that our mission is the same, it's around the people, um, and that we're both trying to make sure, even in our resource reality, i.e.

constraints, um, that Iglisa were communicating so that they on their end um can help flex and move folks around if it's going to result in a reduction.

And so that's really where a lot of the partnership is going to come to.

And I appreciate them being here today with that too.

So that's excellent, and it's always good to communicate sure that you're collaborating and partnering, but then also identifying clearer uh steps of implementation from those discussions, and so I wanted to provide you that opportunity to share that.

So thank you so much.

Thank you, committee chair.

Thank you.

Um well, thank you all so much.

I just want to make sure nobody else has before I go to questions.

Okay, great.

Um Director Gibson, thank you so much for pointing out.

I was gonna ask is if anybody from SCIU was here today, and I thought I saw somebody not trying to call you out.

Um, but I am curious, and if you don't have the answer to this question, then they might have the answer.

Um, is just are how many of the current um workforce fall under um having a collective bargaining agreement or with SCIU?

I don't know if there's other unions involved at all.

Um do you do you happen to know like a percentage, maybe at least, or or maybe they might know?

Stands at me that sorry.

Alex sorry, if you can introduce yourself.

Good morning, everybody.

My name is Alejandra Aguilera.

I'm the director for property services at SEIU Local 105.

Um, to answer your question, uh we have been talking to all the workers, so we are anticipating 100% membership to be part of SEIU.

Yes, thank you.

Um, so real quick since I have you, sorry.

Just wanted to get from your perspective in these like transition meetings.

Um, you know, did you um I guess how did you feel that those went?

Did you feel like they were collaborative?

Were they helpful?

Um, did you get the answers that you needed during that process?

Yeah, actually, it was very um collaborative.

Uh like Hammy said we are building our partnership, and that is the main goal.

We have been in communication, we have been in communication with CCS, with uh Roth, with uh AFSG.

So we have been actually doing a lot of uh pre-work so that everything is established by May 1st.

Right.

Thank you so much.

Thank you for being here.

Uh okay.

Like ready.

Yeah, yes.

Um okay, so I I think my only other question, I guess the the I guess the concern that I've had, and I know that I brought this up during my one-on-one, and I really appreciate the time that you all have taken in doing that work and providing um all of the information.

So I think you mentioned that we won't see a change, right, in the 90-day transition period, but thereafter, there could be some changes depending on where um staff end up.

Either they and they remain um with one of the they go with one of these other contractors, um, one of the other vendors, if they're not still under the one that carries the main um portion of the groups right now because that is fruit-flopping, right?

It's it's changing.

Um so I just wanted to just clarify or verify that that fact, right?

Is that we will see we will we may see a change post-90 days.

It's potential, but what I can commit on my end is that once I once we confirm with city attorney's office, which I doubt that we wouldn't be able to, but what I will commit to doing is keeping asking the contractors, our new vendors to keep track of that and then to report that information back for us so that we can do like uh a light audit on it just to make sure that everything is everything checks off.

Yeah, yeah, and I think that that is that is you know one of the concerns is just with this kind of a big shift.

Um, I just have to name it, right?

That that it is um it's a lot, I think, for for staff or the employees to have to then figure out how do I navigate to this new company, right?

Potentially.

Um, I know that that you all brought a document with you for um for the staff, right?

To um can you explain a little bit about what you have that you wanted to provide?

Yeah, and so I just wanted to just add one other note too with regards to the 90 day performance.

So I think another benefit to working with SCIU is on both ends.

If we're hearing anything with regards to my 90 days is up, I'm like I'm out.

I may not hear that, but I'll hopefully have documentation and then SEIU will hear that.

So we'll work together to track that.

Um and then from the notice that we have here again, we have it in um Spanish and English.

It outlines communication to them, which I think is most important again because we're talking about livelihoods, um, your right to stay.

So the employment offers that you are not being laid off, you're not losing your job, like this is your right.

Um, it outlines their rights under the worker retention ordinance.

So it gives like foundation to that to say like this ordinance exists because and for you.

Um it provides a QA summary of everything that was discussed in the town hall, um, i.e., like I who is Alpha Green.

Like, am I supposed to talk to Alpha Green?

Am I supposed to talk to CCS?

Like, what does that mean?

Um, those are some of the big questions.

What type of paperwork am I supposed to fill in?

What am I supposed to give back my badging?

Do I still have parking?

Um, all of those important questions.

Um, and then the most important is who am I working for and how do I know that for certain?

So we outline each of the groups, i.e.

the locations and who your um contractor is and what their contact information is, and um just encouraging them to be proactive also to reach out to the new contractors and attend the onboarding and the trainings and etc.

So I have that here for everyone if you'd like a copy.

Um, and I guess the last thing on that front, because when you mentioned the um having it in two different languages, and I noted that the town halls, you had them also available in Spanish and Korean.

Um is there any assessment as far as if there are other languages that are needed to be translated, any of these documents or information to be interpreted?

There have been no requests on that, um, but we can certainly explore that.

Okay, that's great.

Thank you.

Um, all right.

Well, seeing no other questions here.

This um there are it looks like this is a block.

Um I'm going to ask council uh the the members of this committee.

I'm looking for a motion uh for this to move to the full council.

I see a motion from councilman Watson and a second from Council President Sandoval.

Is there any need for a roll call vote on this?

Okay.

This will move forward to the full body.

Thank you so much.

Thank you, Councilman.

Thank you.

Thank you, Councilman.

We'll take just a few minutes as we transition.

I'll take one.

I'll take one.

So we'll give a few minutes to transition to our department of finance.

Yes.

Any others?

Yeah.

Sorry, Judah.

Yeah, to hold up the cover cook fridge.

Very cute.

Oh, I remember that.

Just leave it in this slide.

Oh, absolutely.

That's fine.

Oh my god.

I don't want to.

Thank you.

Okay.

We have the team up here for Department of Finance.

Just you, Jackson.

You're lonesome.

That's uh just like yeah.

I go about this one.

Thank you.

You have a short one.

And the camera.

It's yours are so uncomfortable.

They are.

You're on the camera.

Well, that was great.

So that's fine.

All right.

Looks like we have the team meeting us.

We got a whole new crew.

Okay.

All right.

Welcome.

Thank you all so much.

Thank you for your patience.

We'll go ahead and get started just so you know we do have you're able to go a little bit over if we need to.

So uh just for everybody's sake, if you have questions, don't hold aback.

Um this is the time.

So with that said, I'll turn it over to the team here.

If you can all introduce yourselves and proceed with your presentation, and I will uh I will start the queue for council members.

Good morning, everybody.

Jackson Brockway, Capital Planning and Budget Manager, Department of Finance.

Uh Lisa Martinez Templeton, uh, City's chief economist of the Department of Finance.

Justin Sykes, I have the privilege to serve as the director of the city's budget and management office.

Really grateful for the opportunity to be here this morning uh with all of you.

Great folk for Lisa and Jackson's help with this.

I think our goal this morning uh is really to share with you all what the city's current financial status is, what we're seeing in the economy right now, and what we expect the 2027 budget process to look like.

I will start with how we ended 2025.

Uh just some key highlights to start.

Our revised revenue projections that were released in September were extremely accurate.

They came in within $2 million or one-tenth of 1% of the actual revenues.

On the expenditure side, we spent less than budgeted.

Much of that was by design due to the hiring freeze, the furloughs, and with council's help, the preservation of over 20 million dollars of general fund contingency last year.

And then finally, national credit rating agencies recognized the difficult work that Denver did last year or the 2026 budget and affirmed earlier this year a triple A credit rating for the city.

Last year, we asked employees to help us identify ways to reduce red tape, improve processes, and save money.

In total, there were 54 innovations that employees worked with the peak team to implement.

Those resulted in 16,000 hours of work saved over the course of a year and about 2 million dollars of savings.

Drew Brown, uh the supervisor on the continuous improvement team is here today.

If you have any questions, there were all sorts of great ideas that that team helped to implement related to revising the contracting and task order workflow process related to increasing permitting flexibility for restaurants by eliminating forms and variance requirements, and by expediting the police recruitment process with the Civil Service Commission.

There are over 50 innovation ideas still in progress that the team is working with employees on.

And so just want to say a huge thank you to the peak team and to city employees.

It's because of the people on the ground doing the work that we're able to implement these solutions.

Oftentimes they know best, and in the face of resource constraints, it's through these innovations that we're able to still make improvements to how the city runs.

Here are the numbers.

So the headline takeaway, I think, is that we ended 2025 with our reserves slightly better than we had expected.

The table you're looking at on this slide shows two columns of numbers.

That first column, the 2025 revised, reflects what was included last year in the fall when we released the 2026 budget.

The second column is the 2025 actuals, which are once the books closed on 2025.

These numbers are unaudited, uh, they're still preliminary.

Uh we have a lot of confidence in them and do not expect them to change.

In terms of revenues, we brought in about $2 million less than we had projected last year.

And then on the expenditure side, uh, we also spent less than we had estimated by about 20 million dollars.

And so on net, what that means is our fund balance ended about 18 million dollars higher than we had projected last year when we released the 2026 budget, and we ended the year with a fund balance of 197 million dollars as compared to the 179 million that had been projected.

That equated to 11 and a half percent of our revenues last year as compared to the approximately 10% we thought we could end at.

I think this is uh really good news for the city's financial position, but I do want to flag that it's one time, and it's because of the efforts that city agencies made last year to go above and beyond even the amount of savings we expected to be able to generate.

Our focus now is to preserve this progress and build a responsible 2027 budget for next year.

Here's a historical look back at the city's general fund reserve levels, both in absolute dollar terms as well as in percentage terms.

Reserves are important because they help absorb reduction in revenues, they buy us time.

If we need to make structural changes to our expenditures, uh we ended 2025 at 11.5% for 2026.

If our revenues and expenditures come in exactly as budgeted, we would bump up to about 12 percent in reserves.

Of course, there's a lot of the year left, and I'll spend a little bit more time uh later on in the presentation speaking to the 2026 outlook of the current year.

Our target is still to have 15 percent of expenditures in our reserves, and so uh that is what we are working towards and trying to get back up to.

This is a look at the year over year general fund revenue change.

You can see that before the pandemic, general fund revenue growth averaged about 5% each year.

That equated to tens of millions of dollars of new revenue coming into the city every single year.

After the pandemic, we saw a spike in growth, but what we've seen since then is an attenuation of that year over year revenue growth to the point that 2025 revenue was actually slightly less than it was in 2024.

So our growth rate for 2025 general fund revenue was negative 0.1%.

If you are in a flat or declining revenue environment, that makes it incredibly difficult to absorb even normal cost growth for health insurance, employee compensation.

In order to do that, you need to offset those costs somewhere else in the budget.

This is another look at the city's revenue composition.

It shows a stacked bar chart for our revenue sources coming into the general fund uh going back to 2021.

I think a few really key points to make on this slide.

The single largest revenue source for the city is sales and use tax.

That's that light blue largest bar on this graph.

The second largest source of revenue coming into the city's general fund is property taxes, which equate to about 11 or 12 percent of the general fund revenue profile each year.

After those first two, there's a pretty sharp drop-off with the number three revenue source coming into the general fund, occupational privilege taxes, which make up about 3% of overall revenue.

And as you can see on this graph, those three main sources have been roughly flat from 2023 through 2025, and then our revenue overall has also been really flat, relatively flat at that 1.6 million billion dollar level.

This is a slide that gets at the breadth of the city's revenue sources.

Those top 22 revenue sources, which were the ones shown on the prior slide, account for about 90 percent of city revenues in any given year.

If you add in the next 13 largest revenue sources, those top 35 sources of revenue bring in about 95% of general fund revenue each year, then that last 5% of revenues is comprised of about 300 other sources, uh, not all of which recur every single year.

Here's another look at our relatively flat revenues over the last few years, and this graph is juxtaposed with our spending.

So I think the key point on this slide is that that blue bar, our revenues, have been essentially flat from 2024 to 2025.

We are projecting that they will be at best flat in 2026, the current year, uh, but what's changed is our spending.

You can see that that red bar, the expenditures each year, has fallen by over a hundred million dollars from the 2024 actuals to the 2026 budget to get in line with the new revenue trends that we're seeing.

This is what uh we in budget speak refer to as being in structural balance.

The amount of revenues coming in each year matches the amount that we're spending each year.

In any given year, revenues may be maybe a little bit higher, in which case we are adding to fund balance, or expenditures may be higher, in which case we're dipping into fund balance in order to balance the budget.

But that ultimate goal is to be in structural balance, where on an ongoing basis, the amount of revenues we're bringing in roughly match the amount that we're spending each year, and that's what we built the budget for 2026 to be.

Before turning it over to Lisa to speak to the economic outlook, I want to end on the city's credit rating.

Credit rating is a grade that independent professional credit rating agencies give to the city or to the state or to counties or to businesses that indicate how likely that credit rating agency believes that entity is to repay its debt on time and in full.

So the fact that Denver's triple A credit rating was reaffirmed means that the credit rating agencies, the people who buy Denver's debt, are willing to take a lower interest rate because they have a very strong belief that we are in financially financially sound position, and we'll be able to repay that.

Uh specifically, what the three different rating agencies, Moody's, Fitch, SP cited in their credit rating reports were the city's strong fiscal management, the city's adaptability and resilience, and the strength of the city and county of Denver and the metro region economically.

I think this is something that also reflects on city council.

It's because of your work on the budget, the questions you asked, the concerns you raise, that we are able to maintain this credit rating.

So my thanks to all of you for the partnership and engagement that you show every year on the budget.

Uh looking forward to working with you again for 2027.

Uh the credit rating agencies did flag several risks.

These are things that I've already touched on and that Lisa will spend more time talking about.

Uh it includes the general fund reserve levels, the slowdown in our revenue growth, the ongoing cost pressures that we see, and the volatile economic environment.

However, by addressing these head-on, we can budget within our means to deliver the services to Denver residents that are most critical.

And with that, I will turn it over to Lisa to share an update on the economic outlook.

So good morning, everybody.

I'm going to talk about the economy.

Um actually gonna start off here.

It's the next slide.

Uh our economy is on edge.

Um tracking economic growth, we're constantly monitoring those factors on the right there.

I have them listed as constant factors.

And so if you're watching um like talking heads on you know, TV or the networks, you'll sometimes hear them say things like, we are in the um the late stages of expansion, right?

And so they may have reasons for thinking that it's going to end, but the phrasing, and maybe it's also the term's economic cycle, right?

It makes it seem like expansions have like a set lifespan, right?

So they simply are due to end because they've been around for a while.

Um I think of it again to like bananas on your counter, right?

Like you know they're going to go bad soon, so you're either gonna have to bake some bread or toss them in the compost.

But that's not actually how economic expansions work, right?

Economic theory actually says that the economy to its own devices is natural state is expansion, right?

So um like a natural steady growth.

So um the economy gets kicked off that natural growth trend only when an economic shock knocks it off track.

So these shocks can be positive, which gives you a boom, or negative, which leads to recession, and they come from a variety of sources.

Um include things like uh technology shocks, financial market disruptions, geopolitical events, um, energy price shocks, and also monetary policy to restrain inflation can be a shock.

Um the latest Colorado real GDP, and so I'll just pause here.

Real when we're talking in terms of economic data, real means uh adjusted for inflation, and nominal means uh like actual, so not inflation adjusted.

So Colorado's real GDP increased in the fourth quarter of 2025, uh up 1.4% quarter over quarter, and that was annualized, and that actually ranked as ninth in the country for that growth.

And a big contributor to that growth was Denver's economy, right?

We make up a large portion of the state's economy.

This outpaced the nation's pretty anemic growth of only 0.7% for that same period.

But there's a lot more than just GDP that goes into tracking the economy, as well as NIBER, which is the board that decides National Bureau of Economic Research, how and when a recession occurs.

They're also looking at things like real personal income, non-farm payroll employment, household employment, consumer spending, wholesale retail sales, and industrial production when they make their assessment.

Or again, things like the constant factors you see on the right there.

So currently we have three supply shocks going on right now, right?

We've got immigration, we've got tariffs, we've got the Iran war, and one demand shock with AI.

So currently at this point, it's acting as a demand shock, right?

Because it's consuming resources in the form of energy, electronic hardware, and water resources.

But that could shift to another supply shock with enough gains in productivity.

And it's going to take time for all these things to resolve and work their way through our economy.

But at this point, no matter how it plays out, there's been economic damage, right?

And we're paying a price for that.

Damage would have been much more serious if not for the economic stimulus, particularly by way of tax refunds.

That's been propping up consumers this last quarter, really the first part of the year thus far, who've been struggling with high gasoline prices.

It's sort of been compensating for those additional expenses.

There's not a whole lot of upsides here.

Certainly if the I ran warward ascendantly and resolve, right?

And then that would lead to the energy market stabilizing, and then consumers unleash a wave of spending power that was unanticipated, that would be an upside.

But there's definitely more downside risks.

That includes significant risks for outlook of prices, right?

So I've already talked about higher than expected energy prices have become a major threat.

Spending power of consumers has been severely undermined.

Any further increases would drive real spending lower, both directly and through lower consumer confidence looking out into the future.

There's uncertainty around AI's impact on the job market.

If it proves to be effective enough to quickly reduce the need for large numbers of workers, this could lead to job losses, which would increase unemployment and again lower that consumer confidence and spending.

One of the biggest risks come from the stock market, where gains have mostly been concentrated in a small number of artificial intelligence related companies.

If these companies fail to meet expectations, it could lead to this stock market falling sharply, which would lead to, again, a reduction in spending among high-earning households who've been the main drivers of our recent spending growth.

And therefore, you know, just much weaker than expected total spending.

I do want to point out that last year's GDP consumer spending, particularly among high-income households, accounted for 86% of GDP growth last year.

Now that alone, consumer spending, was more than all other contributors combined.

And that is very atypical.

It's more like 66.

Consumer spending accounts for more around two-thirds of 66% of the GDP growth.

And so the fact that it was, you know, close to 90%, again, just stresses the reliance on spending by consumers in this economy.

So next slide.

Now I'd like to talk about city and county of Denver's population.

I grew up here, I've been here forever, and so I definitely remember I remember in the 80s, you can see that was the last time we had some negative growth for the decade, and that was in the energy bust that took place, where we were highly reliant on oil and gas industry.

And when that sort of collapsed, we definitely felt the impacts of it here in the city.

That was followed by relatively high growth in the 90s and again in the 2010s, but that is since cool for 2020.

And this will be further impacted by recent changes to immigration policy, which results in reduced inflows, so tighter borders and restricted avenues for legal immigration, as well as increased outflows by way of ice removals.

Natural increase, which is births minus deaths, those continue to be positive, and they're projected to remain so through the 2050s.

So, you know, it definitely matches the trend of slowed growth that we may have been used to seeing perhaps in the prior decade, but at this time, nothing terribly concerning in terms of a shrinking population.

Next step, I did want to point this out.

So Denver's population by age and generation.

So this matters, right, because it impacts our things like labor force participation rate, right?

If you have an older aging workforce, that's gonna lead to more competition for talent, and that more competition comes from outside areas, right?

Um, it's gonna lead to shift in demand for goods and services, so it's gonna have shifts in our consumer spending, whereas typically health issues and need for assistance tend to increase at age 80 or plus.

Denver is anticipated to have 18,000 new 75 plus year olds over the next 10 years, which is a 42% increase.

That's still lower than the state as a whole, which is looking at a 56% increase for that same time period.

But you know, um, that puts downward pressure on tax revenues, uh, and it can lead to upward pressure on government expenditures as well.

Now, unemployment, so for February, Denver's unemployment rate ticked up one tenth of a percentage point from 4.5% in January to 4.6% in February.

Uh however, month over month, we lost uh just over 3,000 number of people employed.

Uh and our labor force declined by 2900.

So this is concerning and it's been concerning.

We've been seeing weakening in our labor market.

Uh, I I know you've heard me speak about this before.

Um, but we are now, whereas we used to be a bit of an outlier in regards to that, right?

But we are now seeing this is aligning with the nation as well as Colorado and our neighboring counties.

They're following similar trajectories now at this point as we are.

So, this particular is Denver County Labor Force.

Um, the great staff, Will McBride, uh, was tracking year over year on this labor force, and I I asked him to take it as far back as we could with our data, and I just um happened to notice you know, certain time periods and remember when recessions were, and then I asked him to overlay when those recessions were uh when they took place in regards to what our employment looks like.

So, again, I'm not saying this this is not a direct causation, but you know, there's certainly some correlation, right?

When we have a weakening labor market, and that is certainly one of the things that neighbor looks at when identifying there's uh weaknesses in the overall broader economy.

And so something to note too this is Denver County specific, but Colorado is now again showing similar trends, right?

We used to have the highest of the nation labor participation rate, and we have since, and that was certainly even during COVID, and that has certainly fallen um far behind now the rest of the country.

And so that's just within the last couple of months of data that that's been occurring with Colorado.

Next up is business sentiment.

So this is from Leeds Business Confidence Index.

Again, this is specific for Colorado businesses.

Um it decreased to 41.9 with views of the state and national economy declining.

Um geopolitical conflicts, global instability, domestic political and policy risks, uh, macroeconomic volatility and downturn potential, and then commodity and energy price volatility were wearing on their 2026 outlook.

Consumer sentiment largely follows along the same lines, right?

So this is the consumer sentiment, it comes out of University of Michigan, and uh that chart, sorry, it's since been updated.

Um that was a preliminary number, and it increased slightly for the final number, but slightly to 49.8, which still remains a record low for this measure.

Um there has been year-ahead inflation increased to 4.7%, uh, which is short-term expectations, and the long run inflation expectations increased to 3.5%.

So that discrepancy between the short and long-term expectations signals that consumers are expecting this energy shock to be short-lived.

Next is inflation.

So prior to recent geopolitical events, inflation was expected to moderate with the possibility of multiple rate cuts occurring in 2026.

However, latest CPI data for Denver Metro shows inching higher, up 4.2% year over year.

This overall inflation increase was largely driven by food away from home and energy, of which that's linked made up the bulk of that component.

But given core also came in at the same year over year, 4.2% reading, that means it can't all be explained away by food and energy components.

Um, and within that core increase, contributors included household furnishings and operations, which was up over 10%, medical care, which was up 5%, and apparel, which was up 6.5%.

So what does this mean?

That means it's unlikely we'll see either inflation moderation or rate cuts anytime soon with the Federal Reserve likely taking a holding pattern stance.

I'd like to point out an externality from this increased inflation, is that we do see a corresponding boost to our sales tax collections, right?

Since it's a pass-through tax paid by consumers based on the price of their purchase.

So if the prices consumers are paying have increased, the subsequent sales tax we collect increases as well.

On the opposite end, right, our expenditures.

We face the same dilemma as consumers when the city is having to make expenditures and those are being impacted by inflation.

The costs are higher to us as well.

I wanted to point out the latest wage data available for Denver County was back in quarter three of 2025.

And at that time, it showed year over year wage growth of over 6%, which was outpacing inflation, making real earnings growth somewhat robust.

However, it's highly lagged.

But based on recent national wage data and weekly state average hourly earnings for February, those only came in at a nominal 1.8% growth.

Remember, so that's before being adjusted for inflation.

Expectations are for material deceleration in wage growth for Denver County's quarter four gain, which would mean eight inflation is outpacing wage growth, leading to negative real wage growth for consumers.

Consumer spending in Denver has shifted away from goods.

Our primary revenue revenue source, the sales and use tax, is capturing a shrinking share of that overall consumer spending.

We saw an increase that happened during COVID, that was a temporary boost where there's a lot of shift to goods.

As you can see, we're up to near 83% of the proportion of goods as a percentage of total expenditures.

We are now back down to before we were prior to the pandemic at 79.3%.

This is important to note because services, which is where they increasing spending more of their dollars, are largely not subject to sales tax, right?

So we collect sales tax on actual objects, tangible and tangible, but goods.

So you know, since the middle of 2024, growth in spending has exceeded growth and after tax income, and that's not a favorable trend because slowing job growth and persistent inflation have been the primary culprits.

Consumers have dipped into their savings and rising wealth that they've seen from housing and stocks to drive that spending growth.

And so it's really that this decline in their savings rate has been fueling the spending as of late.

But spending growths weakened in predictable areas, reflecting underlying economic drivers.

Typically, declining fundamentals lead to reduced spending or slower growth in those discretionary and big ticket purchases, both of which tend to focus on goods.

So when I talk about discretionary too, that's also impacting not necessarily goods, but things we still collect tax on, so that's like tourism, going out to eat, right?

Those are all discretionary items that when they pull back on that, we feel the impacts.

And so just in terms of timing of those data inputs, um, when the preliminary forecast is done, right?

I extract all this data and I run it through the modeling and I make adjustments.

Um, but that's done in mid-March, right?

So the latest data available at that time is we had sales and use tax through January.

The it literally was the weekend of the start of the Iran war.

Um labor force data, the most recently had was through December, and uh the remaining economic data at the latest was only through February.

So it's a little lagged.

Um my point being this is why we typically do a revised forecast mid-year, right?

Um that allows us to capture any additional movement and factors that are driving that revenue collection.

And historically, our revised forecasts have been uh increasingly reliable and uh quite accurate.

So you know, this is something that we definitely look at.

We can continuously monitor, and you know, we will certainly adjust if need be.

So this is our year-over-year monthly core sales tax graph.

Um I want to point out, I know it starts at 2019, but if you were to back it up like five years prior to that, even it would look fairly similar to 2019, right?

Fairly consistent.

Um year over year monthly growth every month throughout the year.

Uh but then we hit 2020.

Uh we had the pandemic, then we had recovery and inflation from 21 through 22.

But then starting in 2023, just when we were thinking things would hopefully normalize and go back to normal.

Um, we really started seeing this month-to-month volatility that you see there.

And that just, you know, it also contributes to difficulty in forecasting.

Um, I also want to point out that this is looking at the collections uh nominally, right?

So these are not inflation adjusted, um, which would definitely impact uh that entire graph.

If you think of it, it would be like a shift downward, right?

Um 2025 as well, the second half includes those uh incremental sales tax from the terminated stapleton TIFF.

That terminated mid-July, and at that time, those um incremental taxes started flowing into the general fund.

So the second half is even uh sort of buffer of up even more by those collections from Stapleton.

So this is I just wanted to review the key 2025 sales tax trends for everyone.

On the left hand side, that pie chart is the share of whatever that category is for our sales tax revenue.

Um, and then the right side is the corresponding level of year over year growth.

So um within good spending, durable goods, particularly uh furniture and vehicles led the weakness, building materials, which is the fifth largest contributor, that sector was down 15% year over year.

Um increased interest rates and recent declines in home sales negatively impact new construction and renovation projects.

Motor vehicles, which is the fourth largest uh industry contributor, was down 3.3%.

Um high prices, both from interest rates, insurance, uh, and tariff years weighed on vehicle spending.

Now, although vehicle prices didn't rise as much over the last 14 months or so, they still have risen far more than really any other good since 2019.

The next largest is the third largest contributor.

Uh, sporting goods hobby in miscellaneous stores.

So I want to point out that that 4.2% growth was primarily driven by miscellaneous stores, which includes online retail spending as opposed to in-person brick and mortar.

So that's where that growth was largely stemming from.

This is not consumers going in and you know, purchasing goods at the site of it it was being shipped to their home from largely um out of state retailers.

And next up, this is something I really want to draw everyone's attention to is that huge growth of you know, nearly 25% year-over-year in that information producers distributors category was really our saving grace for 2025 for our performance.

This growth massed some of the underlying weakness in other sectors as it jumped to the second largest contributor.

And it's really unclear how much of this growth is sustainable into 2026 and future years, uh, versus a reflection of one-time capital investment in things supporting AI infrastructure.

Um by contrast, food service and accommodation spending lagged, particularly due to the weaker performance of the food service component, which had previously rebounded strongly after the pandemic.

Um food services and drinking places is our single largest sales tax sector, representing 15% of the total sales tax revenue, yet it only grew by uh 1.4% year over year.

Historically, we're used to seeing much stronger growth, you know, between five and seven percent year over year within this sector.

And finally, we have the other category, which um represents over half of the rest of our sales tax revenue, and that only grew by six-tenths of a percent in 2024.

Um, I included in the appendix, we won't go over it here, but I included the same information for 2017, and really just to show you how much it's changed since then, right?

Information wasn't even listed in 2017 as one of the top five, um, and now it's jumped up to number two as well back then.

Um, sales and use uh provided 50% of the general fund revenues, and now for 2026, it is up to 56% of our revenues.

And on that note, um I wanted to just you know, I think Gary, since we're talking about the economy, this is a good time to bring up you know, something else that we've been tracking.

And so what you see here, these charts are based off of GRP, which is gross regional product, it's akin to GDP, but for smaller areas.

And it's the economic composition.

You see Denver there on the left.

Um, and Minneapolis is on the right, which would be considered a well-diversified economy.

So Denver is 50% uh we are dependent on professional business services in financial activities.

So when those industries are doing well, that bodes well for us as well.

But the issue is when those industries, um, and again, I just wanted to point out you know, the the concerns I spoke to regarding you know tech industry and AI, um, that when they're not doing well, we suffer those consequences as well.

So it's pointing out, you know, perhaps um need for industry diversification, economic diversification dampens the effects of negative economic shocks, right?

So uh both job-to-job moves and net inflows decline less in diversities than in concentrated ones.

And so, you know, while you don't have as much of a gain, think about it like a well-diversified stock portfolio, right?

When something's doing really, really well and they're not all in, you know, you don't jump up as well.

But when things go down, um you're also not impacted as abruptly.

And then finally, you know, getting into what Justin was talking about, is you know, why are our sales taxes?

Revenues flat.

Um that's spending growth will be weak this year.

With year-year gains declining throughout the year.

Um there are several reasons to believe that this trend towards moderation will continue, right?

Employment growth has weakened dramatically and it's expected to remain weak.

Um the lack of available jobs and slow increase in unemployment will shift labor market power back towards employers, and the growth in total compensation will continue to moderate.

Compounding this will be the slower pace of wealth growth.

Um price appreciation is moderating.

We saw that with the latest home price increase.

Um actually was negative for Denver.

Despite its recent rebound, the stock market has actually gained little ground this year and is not expected to finish much above above its starting point.

Overall wealth will increase only slightly, and certainly much less than we've seen in recent years, and the slowdown will again reduce spending from that wealth.

Our related factors, low levels of confidence, sorry, energy prices have eroded spending power and confidence, which will weigh on spending growth.

And consumers seem to believe the spike in energy prices will be brief.

And as a result, they may try to absorb higher prices by reducing savings or increasing debt to avoid major changes to their budgets.

But this behavior is not sustainable, right?

The longer this drags on, the longer it takes uh energy markets to get back to where they were, the more this is going to impact consumer spending, which again drives the bulk of our economy, both local and nationally.

And now I will hand it back to Justin.

Thank you, Lisa.

I want to spend just a really quick moment on the other places that we look at sometimes uh that are also facing budget challenges.

The state is looking at a 1.5 billion dollar budget deficit for the state fiscal year that will start in July.

Cherry Creek Schools, other school districts are facing declining enrollment, declining revenues across the country.

New York City, Los Angeles County, Kansas City, Phoenix are all places where they're having to make tough budget decisions either to raise revenues, to cut expenditures, or do both, uh, which brings us to the 2027 budget outlook for the city and county of Denver.

It feels really early in the year, but this is the uh formal kickoff of the 2027 budget process.

Want to first and foremost brief all of you on what we are seeing this afternoon.

We will be sharing this information with city employees, addressing their questions as well.

I think really the best place to start with 27 is with what we're seeing year-to-date in 2026.

As of the end of the first quarter of 2026, the city had brought in about 288 million dollars of revenue.

That is slightly down, very close to, but slightly down from the 290 million dollars we had brought in as of the end of the first quarter of last year.

Lisa's point is only one quarter in.

I think we're trying to avoid overreacting.

Uh our budget for 2026 revenue is flat.

But I think as Lisa shared, there are some warning signs on the horizon.

Uh and right now we believe that flat is really our best case scenario where there's some downside risk of having one to two percent revenue decline in the current year.

That's something we're gonna continue to monitor, something that will keep you all apprised of.

Uh but just want to show what we've seen so far this year.

Uh this only reflects two months of sales taxes.

Uh we won't even get the March data until uh sometime in May.

This is a look at the preliminary guidance that we are sharing with city agencies as we begin to think about the 2027 budget.

Our goal for 2027 is flat revenue.

Like Lisa said, we we do not see the economy changing dramatically.

Uh we've brought in about 1.6 billion dollars of revenue in 2023, 24, uh 25.

That's what we expect things will be in 2026 and 2027 as well.

Think again in 2027, there is that downside risk.

We did not budget for the war in Iran.

We did not budget for $4 gas prices.

And so, of course, that is crimping consumers' ability to go out and buy things that bring in sales tax revenues.

After the difficult decisions in last year's budget, I believe we are in a better place than we were a year ago.

However, we do not anticipate having the financial capacity to add back or restore the reductions that were made in last year's budget.

And we're also facing some cost pressures related to things that to Luisa's point about inflation just tend to go up.

Health insurance, dental insurance, employee compensation, retirement contributions, collective bargaining increases, contract escalations, all of those things will have to be offset by savings elsewhere in the budget if our revenues are not growing at that uh 5% clip that they were growing at in the pre-COVID times, or even at that lower rate more recently.

This means that the budget management office will be working individually with each agency because each agency's projected growth for 2027 looks different.

So there's no one size fits all.

This is something that we'll be calibrating on an individual agency-by-agency basis for how those agencies uh plan for a flat or uh slightly lower budget in line with that one to two percent lower revenues that we're expecting for uh 2026 and 2027.

This really speaks to the importance of continuing to monitor and continuing to keep you all apprised, uh, which we look forward to doing over the course of the summer as the budget development continues.

This is a look at that 2027 budget process calendar.

I want to just thank council for the goals that you all have developed and shared.

I had the opportunity to watch some of the budget and policy committee hearing yesterday and appreciate the specific ideas that council has put forward.

I plan to attend the budget workshop on May 14th to learn more about your top priorities as a body.

I think I would also just put out there uh we would welcome your input on ideas for where to save.

The only way we're going to be able to make new investments in 2027 is if we offset those new investments with money we're currently spending somewhere else.

By September, we will release the 2027 proposed budget.

Uh, between now and then, I fully expect to have the opportunity either to come back to this committee or to brief you all at Mayor Council, or to provide the quarterly reports in mid-May.

Bless you, Councilmember Council President, uh in mid-May, mid-August, in line with the quarterly reporting ordinance that was approved by City Council earlier this year.

One issue I just want to flag for everybody on council that I think you're all very familiar with is the Excel franchise fee.

As you're all aware, I think the franchise agreement with Excel expires at the end of this year.

That franchise agreement will require City Council to refer it to the ballot and voters to approve it before it is extended, and that franchise fee revenue brings in about $30 million of revenue each year.

And so I think this is something that we're evaluating how best to handle, but just want to make sure you're all aware that we may not be able to budget for that $30 million of projected Excel franchise fee revenues in 2027, unless and until that is referred to the ballot and passed by voters.

Uh so we want to surface that and uh hear any feedback you all may have on how best to approach that.

Uh finally, I want to end on equity in the budget process.

Uh this is something that since 2018, the budget management office has partnered with the Office of Social Equity and Innovation or OSCIO.

The Office of Social Equity and Innovation has, I believe, a team of five equity, diversity, and inclusion administrators who we encourage agencies and executive directors to work with as they're beginning to think about their 2027 budget proposals.

As proposals get submitted to the budget and management office, we will be partnering with that EDI team to review proposals through an equity lens.

And then Dr.

Ben Sanders, the city's chief equity officer, will be at the table as the mayor is meeting with agency executive directors and deciding what ultimately ends up in that proposed budget that will be released in September.

Uh so with that, I'll turn it over to Jackson to say a little bit more about the city's capital budget process.

Awesome.

Thank you, Justin, and um thank you, Council members.

I that was a lot of really good information.

I do just want to give you all a quick update on the capital budget process and our subsequent update for the six-year CIP.

Then we'll get you along to questions and discussion.

So always helpful, I think, just to give a quick refresher on the use of capital funds.

Generally, capital funds are used for the acquisition, repair, and rehabilitation of assets.

These are really things that are one-time, non-recurring greater than $10,000, usually have a 15-year useful life.

That's how we think about that policy.

So again, really tied to the assets in our city.

This is all governed by Section 20-18 in the Denver Revised Municipal Code.

Also further clarified in Department of Finance capital funds policy.

Relatively straightforward on some of these parks and recreation, transportation and mobility, buildings, a pretty wide encompassing portfolio.

Those are really a lot of our structures in the city, libraries, police stations, shelters we may own and maintain.

We also have our water health and environment portfolios, so principally think of our storm, our wastewater infrastructure, also our climate investments towards uh things like renewable energy or energy efficient buildings.

And then last we have our arts, culture, and entertainment portfolio.

This is uh things like our city-owned performance venues and other cultural assets in the city.

So just heard a lot from Lisa about um really our economic trends and and really our economic forecast.

So won't spend too much time here, but I did want to talk a little bit about capital resources and the revenues available to us.

When you look at the CIP holistically, we generally have two ways that resources come in uh to support capital investments.

The first is what you see here, the core capital revenues.

This is for funds, uh principally the climate, uh excuse me, uh the capital improvements fund.

This is sourced from property tax and highway users trust fund revenues.

Uh we also have the winter park trust fund, state conservation trust fund, and we have our facilities development admissions tax, also known as C tax.

So that's really our base.

Uh second source that I alluded to is transfers, and these are transfers primarily from voter-approved special revenue funds.

So these are things like parks legacy fund, climate protection fund, library 2I fund.

There's a couple others in there.

Um transfers have not been decided uh for 2027 yet.

That is a part of that budget process.

So wanted to just speak specifically to our core revenue trends.

And um, like Justin and Lisa alluded to, we have seen CAP CIP revenues be uh really flat over the past couple years.

Um, projecting into 2027, we are seeing a slight decline, uh, principally due to uh projected declines in property tax uh as well as some lagging performance within Winter Park and the state conservation trust fund.

Um so if you go to the next slide, Justin, we think about that revenue um picture.

Uh we also think about our upcoming six-year CAP update process.

And I I think um revenues aside is a great opportunity for us to think really strategically about how do we program and capital investments over a long period of time.

Uh we spent a lot of time with y'all during the vibrant Denver bond process to really program and prioritize investments, but there's many investments that remain.

And so we're beginning this update with our six-year CAP plan.

This is an update we generally do every two years per DOF policy.

Um, it is an update to the plan we've done from the 2025 to 2030 process.

Um, and so the process of doing that long-term plan update and the annual budget have historically been segmented.

Um take away on the capital side is we're for the 2027 year, we're looking at merging those processes together.

So this 27 to 2032 six-year CAP plan uh will be really heavily involved in the 2027 budget process, with the 2027 appropriations being the first year of that six-year CAP plan.

Um really excited to get this process underway, um, work with agencies to think through all of the many capital needs and introducing this in uh what we would call at the technical term would be a constrained multi-year plan where we tie this to projected revenues in the future year, and it really gives us a good idea in terms of uh from an asset perspective uh what we can do and also what we can't do, um, especially when we think about the needs on the deferred maintenance side of the house and just really supporting the reinvestment back into our key assets.

Um I am sure you are uh just one more, I'll get to the timeline slide here.

Um I I know we're really anxious to get to some questions and discussion, and so um for the sake of brevity, I do want to say we've got a lot more information we want to share with you about this process and would love to sit down with you all over uh a one-on-one briefing to talk through this process a little bit more and also what it means for some of your priority projects in your districts.

When we look at the timeline here, um I I put that offer for briefings out first here because it does appear on this timeline.

Uh, we are starting here with our budget kickoff.

Would love to sit down with you more and talk through uh the CIP process.

Um if you're busy sket uh excuse me, if you're busy, calendars allow.

Would love to talk ahead of your um city council budget retreat on May 14th, but we'll we'll meet at any time.

Um we'll go into that into the summer with our development process with agencies and really incorporating um a wide swath of feedback, including some of the development work we did within the vibrant Denver process.

That was a really robust um conversation with with you all as well as the community.

So want to continue to leverage that that momentum.

Also, we were heard from you in uh the CIP process last year, and then also digging back into your district level projects, um, aka that that micro priority list that we've we've been talking through.

Um towards the fall, um we will come uh we'll we'll come through with the um annual budget proposal and we'll have our budget um our our budget hearings for agencies, but we also want to sit down with you again and talk through a little bit more specifics on capital projects, again, what it means for your priority projects, what it means for some of your district level projects, um, and that will culminate in the winter with our final um approval of this six-year CIP plan and the first year appropriations as a part of the uh annual long bill.

So I think with that, um we'll leave you up for questions and discussion.

Thank you so much.

That's a lot of information, and I'm glad that we were able to get through it.

Uh I know we're get running a little short on time, but I have almost every council member in the queue.

So I'm just gonna ask folks if you could do two questions.

I think we'll have more opportunity to have more of these discussions.

I've tried to lay out for our committee to make sure that we are are allocating time um for these conversations going forward.

So starting uh with Councilman Flynn, then Sawyer, then Lewis.

Um thank you, Madam Chair.

Could you repeat that?

Uh this is really horrible.

I I feel like we're we're on palliative care here because I see even more underlying weakness in the sales tax, and let's be real.

This is all about sales tax, uh parking meters and how that's not gonna cut it.

The act the addition of the Stapleton TIFF expiration masks uh other weaknesses, including inflation.

The thing I bought in 2022, and I paid a sales tax on that I would buy in 2027 or 26.

It's higher priced.

So it really masks a fundamental weakness in the consumer market, too.

I'm not buying more stuff.

Um so uh I'll be curious and maybe you can answer this off offline.

Umline how are we uh collecting on online sales where we see uh you know a significant amount of it being shifted uh for hard goods and so out of state retailers that we might buy from, they don't have a Denver sales tax license.

How does that happen?

Well, I think it all goes through the state and it filters down to us if I'm uh correct.

But my fundamental question is uh Lisa on your slide 28.

After all that bad news, you said without action, these worsening economic forecasts may linger and more trouble.

So I didn't hear what that action is that we need to take, other than our bells.

What action in terms of structural problems with the sales tax, which is our bread and butter, can we take short of increasing it, of course.

Yeah, I don't think I have a good answer for you right now.

I mean, I know people in the city are looking at ways to drive um business investment with cost of doing business in Denver, things that would bring more businesses into our Denver core, right?

So that's you kind of brought it up a little bit.

Sales tax, right?

It's a little bit confusing.

I tried to mention it's a cons it's a pass-through tax paid by the consumer.

So we see we realize benefits of that when they're buying from a store located in Denver, or even when they're buying from a store not located in Denver, but they're getting it shipped to their home.

Right.

I bought appliances this year, for example.

Right, yeah.

Right, they were delivered to your home address.

So, right, you you paid sale tax on that, and that business remitted on your behalf, the sales tax you paid.

Um, you know, it's things like looking at how can we improve and increase the number of businesses that collect sales tax within the city that would drive consumer traffic to go to those locations, right?

Or um because if somebody is buying something from outside Denver from a Denver retailer, we don't necessarily collect sales tax on that because that's right.

That's true.

Yeah, so I mean I think somebody bought a car from the dealerships in Denver in my district, but they live in Littleton, that goes to Littleton.

Correct.

They'll be paying the sales tax rate based off of Littleton.

That's that's where they live.

Thank you.

Uh second uh final question, and I'll have some follow-up maybe by email.

Um our revenue in the first quarter, which was really just January or February, because we're on March yet.

I didn't see any offset for city expenditures.

And are we gonna get a report on Q1 expenditures?

You will.

When will we get that?

Uh May 14th.

So there was the quarterly reporting ordinance that was approved, and so uh this is kind of a sneak peek at that, but we will be giving you the full report and look forward to your feedback on that and how to make it better.

Uh this will be the first time doing it, but that will be coming in a couple of weeks.

Okay, thank you.

Because that's really a on slide 31, that's really not a very good number to see.

Our revenues being slightly off yet again, with all the structural weakness that we have.

Thank you, Brown Chair.

Thank you.

All right.

Um now every council member is in the queue, and we have about 15 minutes.

So I'm asking council members to please um be as quick with your questions or brief as you can, please, so we can make sure we finish on time.

Okay, maybe I'll go fast.

Um, so 23, we over like I'm looking at slide 45.

23, we oversent by 70 million dollars.

24, we overspent by a hundred million dollars.

25, we overspent by 50 million dollars.

Is that what slide 45 is showing me?

Uh in the appendix.

Uh in the appendix, yeah.

Yeah, so so what you're saying here is any year in which the red bar is higher than the blue bar, means that we spent more than we brought in.

And so that means we use our fund balance in order to uh cover all the costs that we incurred that year.

Right.

Okay, so this is why our fund balance is hovering at very close to or below 10 percent.

Uh 11 and a half percent is where it ended for 2025.

Great.

So um, and that uh can you tell me really quickly?

We had a whole conversation about how the Department of Finance did not book any savings from the layoffs in 2025.

They were all booked in 2026.

So does that mean like did we because of payouts and and things like that, so did we um in 2025 and like explain to me how we overspent by 50 million dollars, but our um our final fund balance number went up.

Um so I think the fund balance number for the end of 2025 did not go up.

It went down.

Okay.

And I think if you were to go back to the original 2025 budget, what you would have seen uh is a bigger dip into fund balance.

So so the budget that was approved for 2025 included spending out of fund balance to spend at that level.

Okay.

So the project the the what we were provided into when we were looking at the 2026 budget was the projected 2025 budget fund fund balance of 12.5.

Um when we looked at it in 2026, it was 10.3.

So we won't know the final fund balance number um until next year for 2026.

Correct.

Um, but for 2025, what we were told was that it should be 10.3 percent, and we ended at 11.4%.

You're correct.

Great, but we didn't book any savings from the layoffs.

So in the budget for 2025, we build in an estimate of unspent uh appropriation.

So it's really hard for agencies to spend every penny each year.

And so I think we built in an estimated about 26 million dollars of unspent.

When we came to you all with the 2026 proposed budget, what we had said was we believe there will be an additional 35 million dollars from the hiring freeze, the furloughs, and the preservation of contingency for a total underspend of budget of about 62 million dollars.

We ended at actually having about 80 million dollars of underspend in the 2025 budget, uh, which is why we ended up not dipping into our fund balance by as much as we thought we would when we released the 2026 budget.

Okay.

Um I really appreciate that.

I will just say that I am very concerned that the administration between 2023 and 2025 overspent our revenues by 220 million dollars.

That's a big number to have disappeared.

And and what I would just offer Council Mayor is if you look back historically over time, there have been many years where expenditures have exceeded revenues.

You can see that in 2018, 2019, uh 2020, certainly, the year of the pandemic in 2021 and 2022, we had pulled back significantly on costs, and so then the revenues rebounding a lot faster than we thought we did.

They they would resulted in adding to fund balance, but but the uh target is to be within structural balance, which is what the 2026 budget reflects.

Yeah, I I I mean you're looking at 2020 aside, you you're looking at two years in 2018 and 2019 versus uh like the six years prior to that, where we were structurally just fine and not spending more than our revenues were bringing in.

So I appreciate that you you know are taking two years' worth of data to defend what we see happening from 2023 until now, but I I'm really concerned about this.

This is especially the fact that council didn't uh because we don't see actuals until May 14th for the first time ever, um didn't know.

So we are being asked by the administration to spend dollars that we don't have that are not coming in, and we are not being told.

This is extremely concerning.

I'm good.

All right, thank you.

Council President Sandoval, followed by councilwoman Gilmore.

Thank you.

Um the economic forecast and all of the work that we did, it's super fascinating because from what I understand diving into this around economists, a recession is usually declared a recession six months after you've already been in a recession, and so it takes all this data to actually say what what's happening, what we're feeling.

I feel like we are in a recession um based on all of the listed here in the past when we have seen a recession.

How many years does it take to get out of it?

Or does that also depend on the tools that we have utilized, like lowering interest rates and other factors that we don't have control over?

What factors have we used in the city to help us?

Because like in the 2008 Great Recession, it was literally named the Great Recession, um, people property values were all over the place.

What tools did we utilize at the city of Denver to help us in that era?

I think we can certainly get back to you with that.

I'm not familiar um right now, but I mean you're right, there's a lot of different things, and it's largely dependent on what those shocks are that are causing the economy to go into a recession, right?

So, like things like the Iran war, the energy contraction, you know, there's not locally a whole lot we can do about that.

Like when they're really big picture macroeconomic um shocks, but you know, certainly we can take a look at the things that we've done in the past that have just jumped in.

I know there was, I think in 2010 a structural financial task force.

Uh there was the ballot measure 2A that was put to voters in November of 2012 to increase the uh property tax mills.

So there were actions taken based on that structural financial task force uh after the Great Recession.

And have we do we have a financial task force now?

Because you're correct.

When I started in 2012, we tried to quote unquote debrost the city, right?

To be able to have funds to help with the fire department with the police department.

Do we have a task force like that happening right now?

We do not currently.

Um that would be my recommendation because I don't like I have to Councilman Sawyer's point, I have a lot of concern.

There's not much more to cut, and I've been hearing from other departments that the cuts that they made last year have will have to be permanent cuts in 2027.

So if we have permanent cuts to our fire department, if our police department and our sheriffs, our sheriffs are already already understaffed.

If we have cuts to our fire department, I don't think you can cut much more.

You'd actually have to close fire stations possibly to figure out because a lot of our budget are what we spend on.

I would love to see the slide.

Um what we spend on from what I understand, just doing budget over the years are people.

I think like our I don't think if you actually look at our services and supplies and all of our contracts, that it's gonna be like the huge majority.

It's pretty big.

I mean, we all have Microsoft, we all have all these services, we just did a contracting services, but I really do think it's the people, the people who run the city, such as everyone around this table, and probably 75% of this room pay that goes to pay us.

And I'll just say one of the things that I keep saying as I'm going out to my neighborhoods, is we are feeling the impacts because we have 800 give or take eight to 900 people less with all the vacancy savings and the people who were laid off, and everyone pretty much around this table is paid the same exact amount of money because we didn't get a merit increase.

So the incentive to work for the city, and I know in 2008 they did get merit increases, even though they have the Great Recession and they were furloughed.

I don't think anyone made the same amount of money.

Even during COVID, our staff were able to get a merit increase.

So everyone in this room is making the same exact amount of money that they made last year, but they lost money because they got furloughed.

And some of us wrote checks back, so we had less money as well.

So just really would emphasize to the Department of Finance and to the administration that whatever task force we need to do, we need to come together and figure that out and start looking ahead and really figuring out 2027, 2028, 2029, 2030, and figuring out what strategies do we have.

That's when some rec centers went offline.

We just had a conversation last night about one of the rec centers that went offline, three went offline, one is still goes to a nonprofit.

And those were things that we saw libraries went offline into nonprofit sectors.

So I really do think we need to have whatever task force needs to be created or tiger team or whatever.

We need to start seeing those recommendations because I don't this city cannot hemorrhage more people.

We can't do it.

Everyone's doing 10 jobs, and it's a lot, and we're not getting any raises.

So thank you.

And thank you for the presentation.

And I'll take you up on a briefing with my staff in the future so that we can have I can go over this more thoroughly with my staff.

Thank you.

Thank you, Madam Chair.

Thank you.

Councilman Gilbert.

Council Pro Chair Miracle.

Um, thank you, Chairwoman.

Um, for folks that are following along at home, um, and I'll post them later on social media, but for the media and everybody else, you need to look at slides 45.

And Tim, if you could bring up 45 really quick 45, 46, and 47.

Um, slide 47, um, just or 45 45.

I want to correct something that you said um, Justin, that is um inaccurate.

Um, because when you referenced back to the pandemic and 2020 um and um that period of time, especially 2020, there were no layoffs of people.

There were zero layoffs, but you said um you kind of pulled it together, so I just wanted to tease that one out because even though um the expenditures were higher in 2020, um, we did not lay off any people, and so um there has been 220 million dollars that this council was not given a memo about, was not taken um into a deep dive into the budget, and so I just want to state publicly that the power of this council is when council leadership, the president, and the pro tem come together, and this would have been awesome to have it have happened fall of 2023 when there was spend after spend after spend pushing all the all-in-mile high contracts.

Council leadership could have told the administration, we control the committee schedule.

This is our part of the legislative process.

We can halt this at any point in time and say you're not passing another contract, we're not scheduling another contract in committee until the administration comes and appeases council and tells us where this money is going.

That did not happen, but I want people to understand because there were times during the pandemic that I told Hancock, you're not scheduling that in the committee.

I'm council president, you better get us better information, especially about the George Floyd protests and what we spent 14 million, 15 million out on settlements.

Council leadership has a responsibility to stop the administration in their tracks, and anybody want to fight me on the charter about council's power on that, you will lose because that is our charter power, not to go along, but to ask these hard questions.

And um, so those are the money slides or the spend down slides for sure.

I did want to bring one point up with the Excel franchise agreement.

We have been talking with folks, and with that companion agreement, there must be in the number one part equitable rate design.

It's where um it would reduce energy burdens for constituents.

That must be in that companion ordinance for the Excel franchise, and we must include every resident in Denver who successfully qualifies for the property tax relief program.

Because if they're qualifying for that property tax relief program, I will guarantee you that they're gonna need energy assistance, and that that money needs to go to the people of Denver because they are doing without medicine, doing without food because of the XL energy costs.

And so just wanted to put that out there because we're gonna be asked to refer that this summer.

Thank you, Chairman.

Thank you, Councilman Gilmore.

Um last uh not least is Council Pro Tamramaro Campbell.

We do uh have a few minutes to go over so we can get your questions in, and you'll be the last one.

Um thank you, Madam Chair.

Um, I actually would like to follow up on briefing.

I think that would be helpful to be able to get more clarification.

Um I think that the comments that it made um pretty much cover it.

My question, and I think this is still where I go back, and you know, potentially this is where it would also start to be addressed to Council President's point on slide 28 as we talk about that shift away from taxable goods and what does that mean for our services and where we do have revenue coming in and what is in tax.

So I think um presentation, I'll take you up on a briefing.

Thank you, Madam Chair.

Great, thank you.

Um we have one item on consent.

I just want to wrap that up before anybody else leaves, uh, and that will move forward to the full body.

With that said, thank you so much for this presentation.

And um, as I stated at the beginning, we we will continue to have Department of Finance back at the table.

Uh and please take them up on any briefings.

But also, it's equally important that we have these conversations and discussions here.

Um, I really appreciate all the time that you have taken uh and the detail in which that you've provided.

I'm sure there will be a lot more conversation.

With that, we are adjourned.