AURORA | The city of Aurora is facing about a $3.8 million shortfall in its 2018 budget, although the city will head into its annual belt-tightening sessions later this summer in relatively healthy financial shape, city staff revealed at a city council workshop May 6.
The city’s general fund ended last year in decent shape, according to budget numbers, finishing 2016 with about $55 million in ending funds available, which was $15.4 million better than expected.
So far in 2017, the general fund is relatively stable. Revenues are about 2.5 percent better than expected, and total costs are about .4 percent less than projected in the first three months of the year.
Sales taxes, up 4.2 percent so far this year, have been buoyed by major developments erected by Amazon and other large firms. Those numbers are supposed to even out by year’s end, however, with sales taxes expected to rise a cumulative 2.4 percent to bring in a total of about $179.1 million, according to the city’s estimates.
The $3.8 million deficit currently facing the city’s coffers — already down from an estimated $4.4 million last year — will inevitably be balanced through the city’s annual budget reconciliation process this fall. How that comes to fruition, though, is still up for debate, according to Greg Hays, the city’s budget manager.
Hays said the city is already looking at ways to save money leading up to those budget hearings, such as not filling vacant jobs, tightening the budget for city vehicles and fuel costs or eliminating the so-called vendor fee for firms remitting city sales taxes. A slew of Front Range cities, including Denver, Colorado Springs, Fort Collins and Pueblo, have axed that latter fee, according to Hays, although he wasn’t able to estimate how many extra dollars the action could net Aurora.
The city is also discussing instituting false alarm fees for people who call-in emergency services without proper cause, Hays said.
City Councilman Charlie Richardson has repeatedly voiced his displeasure with many costs he has deemed superfluous in the city since he was elected nearly two years ago. He’s hinted he plans to suggest cutting several programs when budget talks commence later this summer.
At the end of the meeting last weekend, council members agreed, at the behest of Councilman Bob LeGare, not to slash the city’s capital projects fund as a cost-saving measure for the foreseeable future. That pot of money comprises general fund dollars tagged for construction projects and some other developments in the city.
The primary hurdle facing the city’s budget in the coming years is tethered to law enforcement, as the city attempts to bolster its police force in an effort to hit the long-standing ratio of having two police officers for every 1,000 residents. After a temporary moratorium on that staffing stipulation, the city last year reintroduced a roughly 10-year plan to hit that ratio.
Voters initially approved Aurora’s police staffing ratio in 1993. But in 2011, the courts signed off on Aurora temporarily lowering the number to under two officers. The city promised it would reinstate the original proportion in the relatively near future.
The two-per-thousand goal is expected to cost the city about $1.5 million per year for the next 10 years before totaling about $13.9 million annually by 2027, according to Hays’ projections. Those totals will net the city 129 additional cops hired between 2019 and 2026, making for a police force that will theoretically be 18 percent larger than it currently is.
Hays told council members to be prepared to underspend revenues in the next few years in an effort to save money for the additional cops.
“It’s kind of like building an ongoing back account, or dieting — we’re going to put the city on a bit of a diet,” he said. “It sounds like it is a lot of money, but in bite-size chunks it’s only $1.5 million and that’s about .5 percent of the city’s general fund. That’s why I’m thinking let’s start now.”
Bob Wesner, president of the Aurora Police Association, which serves as the local police union, said the city currently has 681 commissioned officers. He said the next police academy is expected to graduate about 51 cadets, bringing the city’s police force to more than 700 officers — a staffing ratio of about 1.88 per 1,000 residents — by December. He said the city has tentatively agreed to once again hit a true ratio of two officers per 1,000 residents — Aurora’s population is somewhere in the neighborhood of 359,000 people, according to the most recent data from the U.S. Census — by early 2027.
But Wesner said he’s concerned the city is underestimating the number of officers that will be leaving the force in the coming years. He said the average age of an Aurora police officer is 45 years old and there are more than 100 officers who are over the age of 50. He said between 35 and 40 officers have annually left the force in the past two years, and he expects that number to stay constant or rise going forward.
“The city’s estimating that 33 officers will leave in 2018 and 35 will leave in 2019,” he said. “I continue to tell them that their projections are extremely low.”
City Councilwoman Barb Cleland, former chairwoman of the city’s Public Safety Committee, echoed Wesner’s concerns regarding an impending wave of retiring officers and said she’d like to see more cops on the streets as soon as possible, instead of phasing in a few dozen every year or so for the next decade.
“We’re going to be seeing a lot more police officers retiring and I don’t like having academies of 53 or 54,” she said. “I would like us to be proactive. We seem to be constantly trying to catch up to where the numbers should be. And to me, that’s just not good management.”
Both citizens and city council members have repeatedly asked why the city’s marijuana tax revenues aren’t being leveraged to help balance the city budget. But Aurora has been relatively conservative in its use of marijuana tax revenue since the city first opened stores through a novel business license lottery system in late 2014.
The city is expected to bring in about $7 million in marijuana tax revenue in 2017, according to current projections. After all of the city’s available 24 stores and 21 cultivation facilities open in the coming years, revenues are expected to grow to about $7.5 million each year.
Still, an unstable forecast throughout the marijuana industry has led Hays and others in the city to remain bearish on the use of those funds.
“There is no assurance where that money is going to be in the future, and that’s why we don’t want to use it for general fund balancing,” he said. “We want to be able to use it for things that can turn off if you need them to.”
The city has largely agreed to use marijuana revenues for one-time projects, such as the construction of a new homeless resource center in the city’s northern corner, median improvements and asphalt projects. The one long-term project to which the city has committed pot money is the debt taken on from the forthcoming Central Recreation Center. To finance that new facility, the city has agreed to pay $2 million in pot revenues per year for several decades.
Hays said he’s urged council members to shy away from using marijuana funds to balance the general fund, as that could act as a crutch that could become debilitating if it were to vanish following potential regulation from the federal government.
“We’re not certain of the future of the marijuana funds,” Hays said. “It’s new for us and so we don’t have enough history to know what’s going on and there have been hints of some federal pressures that could be negative pressures.”