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Snowstorms put city's budget in a deep rut

It's latest setback as leaders face election in May

Lou Kilzer And Daniel J. Chacon, Rocky Mountain News

Published February 3, 2007 at midnight

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Denver officials learned Friday that sales taxes plunged 7 percent in December because of winter storms that forced stores to close at the peak of the Christmas shopping season.

The city had budgeted for a 3 percent to 4 percent increase but instead saw revenue drop more than $3 million below December 2005 levels.

The shortfall is the latest bad news for city hall, which for seven weeks has battled growing unhappiness with the rutted ice still clinging to roughly half of Denver's residential streets.

The ice has created heat for the mayor and council members, all of whom face an election in May.

Mayor John Hickenlooper said Friday the city would take $8 million to $10 million out of its $16 million contingency fund to hire private contractors.

Budget pressure coming

Taxes had been climbing consistently through last year until the storm, said city Budget Director Mel Thompson.

Combine the revenue loss with the extra costs of hiring private contractors and paying overtime for snow and ice removal, and the '07 budget could face serious problems.

"It's a pretty big task right now," said Thompson. "I do not know the magnitude right now because it's ongoing. But it is my sense that we will have to look at '07 pretty hard. We will have to sharpen our pencils and look at those areas where we may be able to reallocate existing budget items in order to do this."

Thompson said he had hoped some of the Christmas shopping that was curtailed because of the storms would get pushed into January. But since the snowpack and ice have stayed, there is no guarantee the city will see a January bounce.

City leaders are taking so much heat for the cold that they are "spending money now and worrying about it later," said City Councilman Doug Linkhart. Even fiscal conservative Jeanne Faatz, the only Republican on the council, says she's committed to spend her constituents out of their snowdrifts.

"Snow removal is a basic city service," she said.

Councilwoman Marcia Johnson said the city is already spending into its contingency funds. "We can always cross our fingers and hope nothing else will happen during the year," she said.

If last year is any indication, spending about two-thirds of the contingency fund in the second month of the city's budget year could be a problem. The city used all its $15.8 million 2006 contingency fund last year on a variety of areas.

The mayor said he would focus on rebuilding the contingency fund from other areas of the budget.

"You don't want to use all, or even half, on one event," Hickenlooper said.

'Honeymoon is over'

All city office holders, including the mayor, are feeling the public's growing impatience over the pace of ice removal.

When the storms first started, Councilman Charlie Brown said he used to have the phone pressed to his ear. Now he says the shouting has become so long that he keeps the receiver an arm's length away.

The storms are marching into the record books, poised to surpass the Christmas blizzard of 1982 on at least one misery index - consecutive days of snow on the ground.

That would put it in third place since records have been kept, with still plenty of time to climb further.

The last time a perfect storm hit, it cost then-mayor Bill McNichols his job.

So far, no candidate with top political credentials has stepped up.

Cathy Reynolds, a former city council president, says no one will. "I don't see anyone with the money, appetite or smarts to take him on," she said.

Councilwoman Jeanne Robb said while Hickenlooper might not be in any immediate political trouble, there may be long-range effects of this storm.

"He's had one of the longest honeymoons in history," she said.

City council feels heat

The real pressure may be on contested council seats.

Linkhart said that the public "holds us all responsible - the council more so than the mayor. We hold the purse strings."

He said there is much positive to run on this election.

"The city is doing well," he said. "Crime is down and jobs are up."

Council members interviewed by the Rocky said Hickenlooper's one big mistake was seeming to assure residents their side streets would be plowed .

There were 7,000 blocks yet to be de-iced this week. City equipment could handle only 80 to 200 blocks a day.

That means some blocks could be weeks away from getting clear.

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