The Denver City Council is set to vote on the first distribution of the $308 million in federal funds granted to Denver through the American Rescue Plan Act to assist with COVID-19 recovery.

The council finance committee approved a plan Tuesday that would allocate 30% of the $308 million to the restoration and supplementation of city services cut during the COVID-19 pandemic. This plan will need to be approved by the full council before implementation.

Since the city will only receive 50% of the federal funds this year, the 30% plan would provide $46.2 million for the service restoration package in 2021.

“It assures that a majority of the funds goes towards pandemic response and economic recovery,” said Chief Financial Officer Brendan Hanlon. “It also requires that we have discipline over the four years that these funds are available to transition these expenditures from the grant into the general fund.”

Of the $46.2 million, $26.3 million would go toward agency restoration, $17.3 million would go toward citywide furloughs and $2.6 million would go toward supplementing agency services.

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Though the city is still waiting on final spending guidelines from the U.S. Treasury Department to be released after July 16, Hanlon said the service restoration is the most flexible spending category.

“We’re trying to address urgent pressures that are resulting from workload backlogs,” Hanlon said. “The first critical step to prepare for recovery is to allow the city to better aligns its resources necessary to handle current and ongoing demand.”

If approved, this plan would focus primarily on filling vacant positions cut during the pandemic, since restoring all service cuts would cost more than the $308 million the federal government is providing, Hanlon said.

The $46.2 million would only address 45% to 50% of Denver’s position cuts made during the pandemic, according to Budget and Management Director Stephanie Adams.

Adams said, on average, the budgets of city agencies were cut by 4% in 2021, though some budgets were increased – like for the Department of Housing Stability and Office of Children’s Affairs – and other agencies decreased by more than 4% – including the departments of finance and transportation.

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“We actually froze, reduced or unbudgeted about 400 positions going into 2021,” Adams said. “This package recommends 270 positions, mostly restoration.”

The plan includes distributing $6.1 million to the fire department, $3.9 million to parks and recreation, $2.4 million to the police, $1.79 million to transportation, $1.8 million to general services, $1.75 million to technology services, $1.6 million to the public library, $1.34 million to the district attorney, $1.3 million to the sheriff’s office and $1.3 million to finance.

Other smaller allocations would be made to the auditor, city council, clerk and recorder, city attorney, Office of Children’s Affairs, Denver Health, Office of Climate Action and the departments of human rights, arts and venues, public health, housing stability, community planning, economic development, excise and licenses, safety and human resources. 

Half of the $308 million in federal relief funding will be given to Denver upon finalization of the grant agreement, which was approved by the Denver City Council last week. The other half will be distributed in 2022.

The plan was approved unanimously by the council finance committee and will be moved to the full council for a vote in the coming weeks.