More than a billion dollars is headed to city and county governments in metro Denver, a windfall from the latest COVID-19 relief bill passed by Congress this month that has elected leaders wondering how best to spend that gush of cash.
One common theme that’s already emerging: building out a more robust broadband network.
“If we saw anything last year, it’s how critical broadband is,” Golden Mayor Laura Weinberg said, referring to the lifeline that digital communication became for a huge chunk of the economy during the pandemic.
The city of 20,000 on the metro area’s west flank is slated to receive nearly $4.5 million from the American Rescue Plan Act, which was signed into law by President Joe Biden on March 11.
Some form of municipal broadband service, among other infrastructure projects, is also on the wish list in Englewood — in line for nearly $7.5 million in federal aid.
“Voters gave the city the right to provide broadband services in 2020, but having a possible funding source to make broadband widely available may prompt the city council to investigate this opportunity further,” Englewood spokesman Chris Harguth said.
The Denver Post sampled a handful of metro area cities and counties to gauge their fiscal health after a year of revenue interruptions from government shutdowns and health restrictions. For the most part, civic leaders say it’s too early to lay out plans for the nearly $2 billion that local governments throughout the state will receive.
One critic wonders whether the American Rescue Plan Act’s largess — $350 billion bound for state and local governments across the country — is overkill.
State revenues nationwide were down only $2 billion in 2020 compared to the previous year largely due to surging property values, said Jared Walczak, vice president of state projects at the nonprofit think-tank Tax Foundation. In Colorado, he said, revenues were up last year from 2019.
A survey completed in October of more than 170 cities and towns by the Colorado Municipal League revealed that while nearly half of respondents reported a drop in revenues in 2020 from the year before, more than 25% of the state’s municipalities saw revenues go up during the pandemic.
“This relatively stable fiscal environment is a strange backdrop for $350 billion in state and local relief, particularly given how much state and local governments have already received throughout the pandemic,” Walczak said.
“No pork in this for us”
Of the approximately $6 billion Colorado is getting from the American Rescue Plan Act, $4 billion is for state government, $1.1 billion for county coffers and $827 million goes to cities and towns. Half of the money gets disbursed this spring, and half next year.
The bill says the money can be used for local economic recovery purposes — including infrastructure projects; assistance to households, small businesses and nonprofits; and aid to industries decimated by the pandemic, like tourism, travel, and hospitality.
Lakewood Mayor Adam Paul said the city will likely put the $22.6 million allocated to Lakewood toward a budget that lost $18 million last year.
“This is triage,” Paul said. “There is no pork in this for us. I see it as backfill to what we lost.”
Since the city eliminated the sales tax on groceries more than a decade ago, Paul said Lakewood didn’t have the revenue cushion others had when people flooded grocery stores to stock pantries. He said 70 positions remain vacant on Lakewood’s payroll, a result of pandemic-pinched spending by the city.
“We have to use (the Rescue Act money) for the right here, right now,” Paul said.
Aside from budget help, Paul pointed to the possibility of getting to hundreds of millions of dollars in infrastructure projects on the city’s long-term horizon, including $100 million for sidewalk repairs, another $100 million for stormwater improvements and a cool $80 million to revamp the intersection of Wadsworth Boulevard and 6th Avenue.
Infrastructure issues in many cities were compounded by pandemic-induced shortfalls, Colorado Municipal League Executive Director Kevin Bommer said.
“Even before the pandemic, we’ve been seeing for years that we need a way to deal with major infrastructure shortfalls, like aging water supply systems,” he said.
In Englewood, city revenues dropped by $1.3 million — or 2.6% — in 2020, Harguth said. The city has reduced sales and use tax revenue projections for 2021 by 3.7%.
But not all is dire in the southern Denver suburb.
Three out of four furlough days planned for city employees this year have been cancelled, Harguth said. And the stimulus funds coming from Washington open up new opportunities for things like “water, wastewater and broadband infrastructure,” Harguth said.
“We always welcome new revenue”
In Golden, no city employees were furloughed or laid off in 2020, according to Deputy City Manager Carly Lorentz. But the city’s revenue picture was mixed.
“Most importantly and directly COVID-related, sales taxes were down approximately $930,000,” she said. “The only revenue stream increase was $175,000 at Fossil Trace Golf Club, from green fees, cart rentals, driving range and lessons.”
Meanwhile, Adams County is due for a $100 million injection — which will help after a 2020 budget shortfall of $5 million from loss of rental income, food sales and traffic citations, county spokeswoman Christa Bruning said.
The latest round of stimulus funding could be used to continue the county’s efforts “to keep people in their homes and ensuring other housing needs are met for community members during the COVID-19 crisis,” Bruning said.
To Denver’s south, Arapahoe County will pocket nearly $130 million from the coronavirus bill. Colorado’s third-largest county did not have any COVID-related layoffs or furloughs last year, but a spokesman for the county said “we always welcome new revenue.”
With so much money being splashed across the country and looser guidelines for spending it than the first round of coronavirus stimulus, Bommer with the Colorado Municipal League said he understands concerns about possible misspending, saying as much in a newsletter to local government leaders last week.
“While there are many in the municipal family that see this aid as a lifeline, we also know there are some municipalities that have not seen steep revenue declines… (who) have deep concerns about the federal deficit and inflation,” he wrote.
That makes it all the more critical, Bommer told The Post, that cities and towns are transparent about how they spend what they receive.
“It’s incumbent on them to be very up front,” he said. “To keep with the intent of the legislation — which is to recover the economy and put people back to work.”