In a letter to Denver City Council, Mayor Michael Hancock Thursday said he wants to protect the city’s reserve fund balance, so he’s rejecting an amendment that would finance flashing crosswalk beacons throughout Denver. 

Hancock sent a letter to city council saying he would reject the amendment that would add $1.1 million to the general fund to pay for 11 rectangular rapid flashing beacons (RRFBs). 

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City Council originally requested $2.2 million in October, but Hancock denied that. The mayor compromised with council on Oct. 17, approving $7.5 million in other amendments to the 2023 budget. In rejecting the recent amendment, he cited concern over the city’s reserve fund dipping below a 15%, a benchmark defined by the reserve policy. The amount the amendment would take the reserve fund below 15% is estimated at less than one-tenth of 1%.

“I am disappointed that this amendment would seek to drop the fund balance below that (15%) threshold, in direct conflict with our policy,” Hancock’s letter read. “With an uncertain economic outlook for the next year, including the possibility of a recession, it would be shortsighted and irresponsible to start the year with a drop in our reserves — of any amount — below that 15 percent level.”

Without the new amendment, the proposed 2023 budget would have a reserve fund balance of 15.1%. Should council override the mayor, the reserve balance would fall to about 14.9%. Denver’s city charter requires the city maintain a fund balance of 10% at minimum.  

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Still, the $1.1 million is enough to fund construction of one pedestrian signal in each of the 11 council districts, according to District 5 Councilwoman Amanda Sawyer. The original request of double that amount represented the high end of what Denver’s Department of Transportation and Infrastructure (DOTI). Sawyer’s amendment presents the low end of that estimate.

“The cost changes depending on things like whether they’re using an outside contractor, and what the surrounding lay of the land is or locations that are already oriented for RRFBs,” Sawyer said in a Nov. 7 council meeting. “So that’s the $1.1 million, they can do it for as low as that.”

District 2 Councilman Kevin Flynn supported the amendment. He said the city’s budget office estimates tend to be on the cautious end. In at 2021, Flynn said the city anticipated a low fund balance, but could not recall the exact amount. At the end of the year, it stood at 23.8%. In 2022, the city anticipated a year end fund balance of 14.1%. Projections show it will stand at 22.4% according to Flynn. 

With the amendment and $1.1 million expansion to the general fund, the city fund balance would stand at 14.94%, according to Stephanie Adams, Denver’s Budget and Management Director.

The council approved this amendment, prompting Hancock’s letter on Thursday.

“While I fully expect that council members may feel strongly enough about the value of the RRFBs to override this rejection, it is imperative to my administration as fiscal stewards of the taxpayers’ dollars that we demonstrate our unwavering commitment to adhere to our fiscal policy and protect our reserves,” he said. 

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Council can override his rejection with a supermajority. A supermajority is where nine or more council members agree on an issue and gives the body authority to override a mayoral veto. Ten members of council approved the amendment during last week’s meeting.

The proposed 2023 budget will dominate the early section of Monday’s city council meeting. First council members will read and consider Hancock’s rejection of Sawyer’s amendment. This will be followed by further discussion of the future budget. 

Council is expected to vote on the final budget Monday night.