Breaking down Englewood's 2018 budget issues

With ‘fiscal cliff’ coming in 2019, city is working to find cuts

Posted 9/5/17

It’s that time of year again: Englewood is preparing the budget for 2018, and citizens can soon comment on the process.

Challenges for Englewood’s budget include its looming construction and maintenance costs as an aging city — about $77 …

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Breaking down Englewood's 2018 budget issues

With ‘fiscal cliff’ coming in 2019, city is working to find cuts

Posted

It’s that time of year again: Englewood is preparing the budget for 2018, and citizens can soon comment on the process.

Challenges for Englewood’s budget include its looming construction and maintenance costs as an aging city — about $77 million over the next five years will be needed to upkeep its infrastructure. As a city that relies heavily on sales and use taxes, Englewood is discussing how to plan for rising costs given a funding source that can be uncertain and a city council that is not fond of tax increases.

The city has, so far, successfully balanced the budget heading into a vote by city council. You can comment on the budget proposal at the Sept. 18 public hearing in the city council chambers at Englewood Civic Center. It begins at 7 p.m. City council’s first reading, or consideration, of the proposed budget will take place Oct. 3. The second and final vote is scheduled for Oct. 17.

Here are a few things to know about the budget before then.

Budget is balanced

The proposed budget is balanced, which means revenues are projected to meet or exceed expenses.

The proposal does require Englewood to use about $400,000 from its reserves, or surpluses, to pay for all the city’s programs and projects, said Mark Woulf, interim assistant city manager. That leaves the reserves above the minimum that city policy requires on hand for emergencies.

A number of cost-cutting measures helped the city reach the balance, Woulf said. For example, the proposal eliminates some vacant positions to save money.

Balanced budgeting is always challenging for Englewood because it’s a “full-service” city, said Steve Ward, a member of the city’s Budget Advisory Committee. Where other cities like Centennial partner with special government districts to provide benefits like library, parks and fire services — an example is South Suburban Parks and Recreation District — Englewood provides all services on its own.

But balancing was not easy

The city is approaching a point where cost cuts may not be possible unless Englewood cuts programs, Ward said.

Englewood has “done an excellent job of controlling expenses,” Ward said, but personnel costs go up each year because of raises and rising insurance premiums. Ward said he spoke for himself and not on behalf of his committee.

A few cuts in services here and there won’t solve the city’s cost problem, Woulf said. City staff intends to develop a plan with input from city council and citizens in early 2018 to lay out a path forward and identify priorities.

Englewood is approaching a “fiscal cliff”

Ward’s committee warns of an upcoming “fiscal cliff” in 2019, when expenditures will begin to outpace revenues by about $1 million per year.

In 2016, Englewood voters approved a$27 million bond measure to pay for construction of a new police department facility, a $97.5 million bond to fund new elementary school and preschool buildings and a mill levy increase for $1.5 million more in annual operating funds for Englewood Schools. But city council is traditionally hesitant to ask voters to increase taxes, Ward said.

Ward said if the choice is between losing services like, for example, recreation programs, library hours or other services — or joining a special district that “results in the loss of local control” — he believes voters should have the option to raise taxes.

Otherwise, cuts are the only long-term option.

Aging city’s infrastructure a central issue


Over the next five years, Englewood projects it will need about $77 million for capital projects — including road and bridge updates, security cameras and even police radio maintenance. Some of these are referred to as public improvements.

Only $4.5 million of that amount is included in the 2018 proposed budget, with about a $15 million to $20 million need projected for other years.

Cities everywhere are struggling as infrastructure ages, Ward said.

It was “overall eye-opening to see the amount of capital projects we had to defer (to) future years,” Woulf said. Looking to the future, Englewood will come up short in a large way without a means to save or raise more money.

The projection does not include costs related to the police building — which is expected to be built from November to early 2019 — or large parks and recreation projects, so the total need is probably larger, Woulf said.

High points and future challenge

The city prioritized items in the budget that “enhanced or improved public safety” or maintained public infrastructure, Woulf said. The proposal allocates money for two new police officers in 2018.

The proposed use of about $400,000 from the city’s surpluses leaves the reserves at a “healthy 20.1 percent” of the total general fund, Woulf said. The general fund is money for all city services not supported by a fee structure. For example, the Littleton/Englewood Wastewater Treatment Plant is funded by user fees rather than sales and use, and property, taxes, which pays for services like parks and the library.

City policy is to maintain a minimum of 16.67 percent for emergencies, such as the hailstorm that hit Lakewood’s Colorado Mills mall in May, Woulf said. That disaster left about 3,000 employees without jobs and is estimated to cost the city $2 million in taxes if the mall remains closed until November.

“Over time, our revenues are not keeping pace with the expansion of our expenditures, and that’s what a lot of cities are facing,” Woulf said. “Especially ours (because) we’re so dependent on sales and use taxes ... we absolutely have to have a conversation about values and priorities.”

A draft of Ward’s committee’s annual report agreed, saying that because of the “cyclical nature of the economy and the growing presence of online purchasing,” Englewood’s dependence on sales tax is a significant concern.

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