In Denver, money went to recovery, city ops

“When people are employed, people spend money, and when people spend money, the economy grows.”

In the COVID-19 pandemic, the ver y definition of a public health crisis, Denver spent less than 5% of federal stimulus money on public health itself.

But city officials say there’s a good reason for that: In part, the spending guidelines for Coronavirus Aid, Relief and Economic Security Act funding were unclear, so the city felt it best to put the money toward more general expenses. Millions more for Denver’s public health response came from other sources such as the city’s special revenue funds and the Federal Emergency Management Agency.

The CARES Act became a household phrase nearly a year ago, as the federal government injected $150 billion to combat something few had seen into states’ and cities’ arsenal — including $127 million in Denver. But auditors and accountability experts say uncertain guidelines and tight spending deadlines attached to that money raise concerns. And while there are oversight mechanisms in place to ensure the money is spent properly across the country, they’re different from government to government — and much of it won’t be reviewed for months.

“I don’t believe the reporting requirements back to the federal government are very strident,” Denver Auditor Tim O’brien said. “They’re more focused on getting the money out than the accountability.”

The vast majority of Denver’s

CARES Act funding has gone or will go to economic recovery efforts, emergency shelters and citywide operations, financial data shows, while less than 18% combined has been spent on public health, aid for housing, food insecurity and other ef for ts.

Almost $109 million of Denver’s $127 million in federal money is out the door or “tagged for a ver y specific purpose,” according to Kiki Turner, deputy director of communications and public af fairs for the city’s Depar tment of Finance. The rest must be spent by the end of the year or returned to the federal government.

Because there’s more than just federal money available for Denver’s pandemic relief and recovery, Turner said the city put CARES Act funding toward seven categories: citywide operations, economic recovery, food assistance, public health, emergency sheltering, housing support and support to individuals impacted by COVID-19.

Such a heavy focus on economic recovery from CARES Act funding — $18.83 million — makes sense and is comparable to Chicago’s approach, said Allison Flanagan, director of policy analysis for the Center for Tax and Budget Accountability.

“When people are employed, people spend money, and when

Allison Flanagan people spend money, the economy grows,” Flanagan said.

And the bulk of Denver’s larger public health response wasn’t from CARES Act, but other sources such as special revenue funds and expenses that will be reimbursed by FEMA, Turner said. A February report shows some of that money has gone toward $13.7 million for testing and supplies, $5.2 million for workplace safety, cleaning and janitorial supplies and $4.7 million for medical equipment and supplies.

Still, Flanagan pointed to several questionable expenses with CARES Act money, including $800,000 for a prefabricated public restroom on the 16th Street Mall, which is expected to open this spring, and $105,000 to replace all hand-operated toilet, urinal and faucet fixtures in each of Denver Public Library’s 26 branches.

“That has very little return on investment,” Flanagan said. “If you were to take the $800,000 and the other bathrooms and put that toward (personal protective equipment), toward getting people back to work, you’re getting people to spend money, you’re helping your economy.”

But Turner said the bathroom on the 16th Street Mall could help people experiencing homelessness and will be useful as the city reopens further. The improvements at the library branches, she said, also help keep the homeless and other patrons safe. All of the city’s library branches closed last March, though nine are scheduled to reopen with limited hours this week.

Flanagan also noted some cities such as Chicago spent millions from CARES Act allotments on police departments, though Turner said none of the city’s CARES Act money went toward the Denver Police Depar tment.

Large spending packages such as the CARES Act do lead to issues when it comes to tracking where the money goes and ensuring it is spent in ways connected to the pandemic, O’brien said.

His office is tracking the city’s spending as it happens, but declined to discuss specifics because it’s still underway. He noted that an outside firm will also audit Denver’s CARES Act spending too and prepare a repor t that should be available by late summer.

It’ll be submitted to the Federal Audit Clearinghouse, said Beryl Davis, a director in the federal Government Accountability Office’s Financial Management and Assurance team. She didn’t know which agency in the federal government would examine those reports once they’re submitted.

“COVID just dumped a lot more money into the states and local governments,” Davis said. “Certainly it’s a challenge for them to account for all of this and sure it’s properly spent.”

Director of policy analysis for the Center for Tax and Budget Accountability